These days, few advisors become enthused when told a client is on the phone. Bull or bear, they know their going to be growled at, charged, trampled and for sure feel bitten.
In just the last few days, I've been called by a number of financial advisors—both veteran top producers and youngsters who tell me that from the opening bell to after hours, their clients are bombarding them with emotions that come in the form of "Change my portfolio and liquidate my account," "How could you let this happen to me?" "Why didn't you see this coming?" "What's going to happen now?" “How long before we get back to even?" “My other advisor is much better than you!” “Why should I give you my business?” “I can’t afford to lose any more money.”
My callers all ask me the same question: “How do I calm these clients?” and most of them tack on, “They’re driving me crazy!”
Fortunately for them, “How to deal with emotionally charged clients” is a topic I’ve spoken on to thousands of financial advisors via Wharton Executive Education programs, Security Industry Association programs and financial institution training programs and conferences, so I can be very specific in my answer. I’ll share the advice I offer on the grounds that it will probably come in handy before day’s end.
Emotionally charged clients call you when they experience an emotional reaction that causes them to question your performance, be it your investment strategy or a specific trade. Sometimes it is to express anger and frustration over your performance, other times it’s out of anxiety and fear as they watch their portfolio plummet.
That is not to say that your client’s emotions and feelings are not appropriate. Indeed, most people do get angry and disappointed when their portfolio drops endlessly. However, your clients—like most people—often mismanage these emotions, so the emotional perspective they use when they call you is typically filled with distorted thinking, blaming communications and a tendency to make impulsive changes. While it might be true that a client is best served by liquidating and transferring an account, you want the decision to be based on thoughtfulness, not emotional impulsiveness.
Calming these clients requires responding to them in a manner that causes them to become more realistic in their thoughts; doing so tones down their emotions. It is easier to deal with an upset or concerned client than it is to speak with those who call and are angry or very anxious. Master these five steps and you won’t feel like hanging up on your clients.
1. Be in charge of your own emotions. This is easier said than done because emotions, via a process called emotional contagion, can be likened to a social virus—they are contagious and spread from one person to another chiefly through sound and facial expressions. That means if you “hear” an angry or anxious voice speaking to you, there’s a good chance you are apt to become angry and anxious too. Your own experience will tell you that an angry or anxious client speaking to an angry or anxious advisor does not yield good results. Thus, your first step is to immunize yourself so you do not catch your client’s emotions, like when your partner raises his or her voice to you and you “yell” back.
Your immunization shot is developing a relaxation response, so you can stay cool when your client’s aren’t. To do so, you will have to practice a relaxation exercise approximately 15 minutes a day for about two weeks. Increase your motivation to do so by remembering that “automatically” relaxing in the face of anger, anxiety and fear will not only make you more adept in handling your clients, but also benefit you when you have a crucial conversation with your partner or playing golf or tennis with your friendly competitor.