Have you heard the one about a priest, a rabbi and a minister who walk into a bar? Regardless, I hope I got your attention so we can begin a conversation on how, when and if advisors should discuss religion with a client.  

If you’re like most advisors, religion, along with politics, definitely falls into the financial planner’s taboo topics category. Yet, religion can be a factor in not only selecting investments and providing good customer service, but also in overall planning strategies.

During my first year in this business, I met with a 50-something prospect to develop a financial plan. We did the standard budget analysis, insurance review and retirement projections. As it turned out, she was not only behind in saving for retirement, she also was the first person I‘d ever met that tithed. In her case, a full 10 percent of her pay went directly to her church on the first of the month.  

As I considered her desire to retire in 10 years and discussed funding gaps and opportunities to make the most of her budget, I thought it would be a genius idea to take her monthly tithe and purchase a variable universal life insurance policy. Not only could she close her retirement funding gap with tax-free savings, but when her time came to walk through the pearly gates, her church would receive something like five times the amount she could tithe over the next 20 or 30 years.  

I mean, this seemed like a no-brainer. It solved multiple problems and I thought that I, and everyone else, would be happy. But there was one little problem: She was steadfast and unwavering in her belief and practice that God receive the first 10 percent of her pay. The VUL was never funded and she remained a prospect.

Another of my religious learning experiences involves holiday cards. I send holiday cards in December as a gesture of gratitude for clients’ business and as a way to keep in contact with them. Holiday greetings can be a touchy and uncomfortable topic for some clients and advisors. As advisors, we often talk about and feverishly argue about withdrawal rates, asset allocation and fiduciary standards, but we don’t talk much about how best to wish a client Happy Hanukkah, Merry Christmas or Happy Kwanzaa.  

In one case, I had been sending a couple both holiday and birthday greetings for years. My timing was perfect and I always included a personal message. I later learned from my wife, who worked with one of them, that the couple’s beliefs excluded both holiday and birthday celebrations. So why on earth was I was sending them holiday cards when it did nothing more than call unwanted attention to their beliefs? As you can imagine, my reaction was, “Why didn’t I just ask them about sending cards in the beginning?”

I wish my religious gaffes had ended there but, a full five years into the business, I still didn’t grasp the significance of how religion can have an impact within our industry. At the time, I was managing a group of advisors and one asked me how we could incorporate the Ave Maria funds into our product suite. Her client had requested that we use the funds, and so after a little research I found that they were a Catholic-based mutual fund company. My subsequent research revealed that at the time, they were both underperforming our current product offerings and carried higher annual fees.  

Focused on the financial aspects once again, I questioned why we would select those funds and went into detail about how we could use other funds to improve both risk and return characteristics as well as lower fees.  Obviously, it never struck me that investing in a company that dovetailed with clients’ religious beliefs was perhaps even more important than returns and MPT stats. That was a pretty big miss for this advisor, who grew up Catholic and went to Catholic school for eight years.  

On a different, but similar note, I was once encouraged to join a church for the purpose of adding new clients and growing my business when a mentor noted that Protestants “seem to do pretty well and have a lot of money.”  That begs the question, can we prospect at church? Should we invite clients who don’t share our religious beliefs to attend our church, mosque or worship hall?  

Early in my career, I wasn’t affiliated with any religious organization; now I am a church member—with no intentions of prospecting there. It’s a very important part of my life now, but I choose to share it through my actions rather than incorporating it into my work environment. I don’t leave a bible on my desk, decorate with biblical images or verses, and avoid using religious closings such as “God Bless” or “Blessings” in my communications with clients.

There’s no best or simple way to sort all this out. My personal belief is that questions can sometimes be the answer. I personally have relieved some of the stress and anxiety that can come when mixing business with religion by adding a couple of questions to our risk tolerance/investment policy statement.

I simply ask new clients if there are any personal or religious beliefs that they want us to consider when selecting investments for them. That opens the door to reducing conflicts between their religious beliefs and our normal planning process. This has helped reduce Ave Maria-type incidents at our firm and can be a conversation starter about more than just religion. I have clients who are vegan and don’t want any fast-food restaurant stocks. I have also been asked to avoid certain large retailer stocks because the client believes they put mom and pop stores out of business.  

As a follow-up to the beliefs question, I inform clients that we generally send birthday greetings and holiday cards and ask if this conflicts with any personal, religious or social responsibility principles they may have. For me, it’s a simple way to avoid offending someone who doesn’t celebrate holidays, feels mailings have a negative impact on the environment, or just doesn’t want to be reminded of his or her birthday.  

I am not suggesting that my approach is right or better than anyone else’s; it's just an illustration of how one advisor is managing this taboo subject. Instead of using my work environment to reflect my beliefs, I generally express my religious values through volunteering at my church, working at a food kitchen or delivering food baskets and supplies to the needy. These activities are a very important part of my life and also serve as a great conversation starter when clients invariably ask, “How was your holiday?”… or, “What have you been up to lately?”

Religion is a topic that advisors need to address thoughtfully with clients. Advisors who ask some simple questions and learn from experiences like mine may reduce the angst they and their clients may feel when religion becomes a factor in selecting investments, serving customers and creating harmonious financial plans.

P.S. Please e-mail me with any comments or experiences you have had related to this topic.

Follow Robert Laura on Twitter @robertlaura. He is the president of SYNEGOS Financial group, co-founder of RetirementProject.org, and author of Naked Retirement. He can be reached at rl@robertlaura.com. He has written numerous articles published on fa-mag.com and presented his Naked Retirement Webinar