Whether it’s an illness, a divorce, a death in the family, a reckless adult-child or some unforeseen disaster, a traumatic event can make even the sanest clients become erratic, or perhaps self-destructive. As an advisor, you have to tread carefully. How can you keep a client in anguish from making matters worse? What should you do to steer him or her in the right direction without alienating the relationship?

Never Overreact
“You should never, ever overreact,” cautions Cary Carbonaro, managing director at United Capital in New York; Paramus, N.J.; and Clermont, Fla. “Always take the time to revisit with clients their present needs and future objectives, [and] then you can shift or change course if needed.”

It helps to start by getting at the underlying emotions. “Emotions subconsciously drive our behaviors, and it’s better to get to the root of the emotion and bias in order to understand the behavior and work toward a suitable solution,” says Carbonaro.

But be careful not to let that take too much time. “Once you assess the risk and identify a solution, then you move as fast as possible to react to the unexpected situation,” advises Ben Barzideh, wealth advisor at Piershale Financial Group in Crystal Lake, Ill. “The window of opportunity to fix a problem or effect change can close.”

Guidelines, Not Rules
Your reaction may be a sort of short-term Band-Aid or a complete overhaul of the client’s long-term plan. Long-term plans aren’t etched in stone, after all. They’re guidelines, and they can be tweaked if necessary. “You change course when it becomes clear that the agreed-upon plan will not be followed,” says Joseph Nacca, a vice president at Sage Rutty & Co. in Rochester, N.Y.

But that redirection has to be made with the right tone. “Taking a paternal attitude and scolding the client might be applicable to certain client personalities, but I have never seen success with that approach,” says Nacca. “Instead, I’ve seen success by taking a soft-spoken, empathetic yet matter-of-fact approach. Conceptually walking a distressed client down the various paths of the immediate and distant future via a series of ‘what-ifs’ can paint a vivid picture of the consequences of their decisions now.”

Besides helping get your client back on track, this can have an added benefit. “Client mistakes can actually offer the opportunity to deepen relationships,” he notes.

Empathy, Not Sympathy
Yet maintaining this empathetic tone may not be easy. The trick, suggests Brian Heckert, founder of Nashville, Ill.-based Financial Solutions Midwest, is to understand the difference between empathy and sympathy. “The best surgeons in the world have empathy and not sympathy,” he says. “If they had sympathy, they could never make an incision to cure what’s ailing their patients. It’s the same for advisors.”

Others stress being reasonable but not judgmental. “I always remind clients that they are paying me to be an unemotional voice of reason,” says Katie Connell, a divorce attorney and partner at Boyd Collar Nolen & Tuggle in Atlanta. “I may feel for their distress, but that’s not why they are paying me. Then I point out that they won’t always be in crisis. They need to factor in both the present situation and the long-term considerations. Finally, I’ll often advise that they seek the input of another outside professional, be it a financial planner or a mental-health counselor. I’ll say, ‘Give yourself a break. You’re going through a stressful time. Seek expert assistance.’”

Having Patience
This balance of rationality and compassion may not come easily. “[It] requires patience and support,” says Lorraine Fox, director of wealth management at Aspiriant in San Francisco. “Remaining objective, expressing empathy but helping a client understand the steps he or she needs to take allows the client to feel supported.”

For clients it may become a learning experience, she adds. “Financial planning has a huge educational component,” says Fox.

Advisors may find this especially stressful. “What can be trying for an advisor is when a client’s emotion dictates a strategy change although long-term goals have not changed,” says Olivier Cornet, a managing director at JSF Financial in Los Angeles.

Needless to say, they must not lose their cool. “A major role of an advisor is to keep calm in emotion-driven situations and help clients focus on what is important such as reaching agreed-upon financial goals,” says Cornet. “Unexpected events that can trigger erratic behaviors should have ‘contained consequences.’ The advisor’s role is to plan for such events and support clients when they occur.”

Panic Triggers
Sometimes those triggers can be foreseen, but often they are insidious. “Usually, the triggering event is a symptom of a larger problem that I’m already aware of,” says Terri Munro, a senior financial planner at Atlanta’s BT Wealth Management who specializes in financial planning for women getting divorced. “For example, maybe I’m already helping the client through a divorce settlement. Then something triggers a reaction, such as a parent’s dying or a child’s acting irresponsibly, and she suddenly goes into a tailspin.”

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