The first step in the process is to reduce anxiety and lessen the person's fear of making mistakes. It's fascinating that often when I sit down with clients and objectively review their plans, I find in many cases that they remain solidly on track to reach their goals. Most of the time, when we accurately measure these things together, the clients discover that they are better off than they thought, the sky is not falling on them, and they are not doomed to financial ruin, despite what they have been led to believe by others.
This first step promotes clarity and increased confidence so the situation can be assessed and my client and I can together begin to resolve the issues causing the anxiety. As an advisor and advocate, my value in this collaboration is to help decrease the clients' fear: fear of financial loss, fear of making mistakes, fear of change or simply their fear of an unknown future. At the same time, I can provide value by increasing opportunities, by letting the clients know that they can win the game, by providing the tools necessary to play and by offering directions on how to use those tools.
This process might be compared to how medical triage is employed in a hospital emergency area. When an accident victim or injured person arrives, the staff is trained to quickly assess what damage has occurred, what is the most critical injury and what needs to be done first. Of course, all this information and training is of little value unless the staff has ready access to the medicine and equipment needed to carry out the treatment.
The process of helping someone who has suffered a sudden financial change is very similar. Call it financial triage. As an advocate, you have to first sort through all the issues that are afflicting the person, determine what is critical and what can be controlled. Too often, things get so bad so fast that the person tries to deal with everything, but instead becomes paralyzed and gets nothing done. So the process typically involves helping the person calm down and recover his ability to think rationally, perhaps by creating a temporary "no-decision zone." Once he's reached a level of composure, I can help him address the various issues systematically, starting with short-term, high-impact issues that can be controlled.
This step is vital because it re-establishes some normalcy, promotes sound decision-making and helps keep the sudden financial change from becoming an economic catastrophe. It also shifts the individual's center of influence away from friends, co-workers and the self-serving mass media. It provides an environment of clarity and reassurance where a person can make rational judgments and decisions.
Obviously, a high level of trust must exist or be created between the advisor and the afflicted client. Trust requires time and patience from both parties. Before the healing can begin, the person has to be willing to openly describe his feelings about what has happened and his fears about what might happen to him as a result. Once these fears have been vocalized, the advisor can help the person determine which ones are real and which only perceived, which are the most immediate or threatening and which can be controlled and managed.
Those advisors who prepare their clients for any sudden financial impact, either positive or negative, are in a better position to help clients. Similarly, clients should have a close working relationship in place with an advisor they trust. When an individual's emotional equilibrium swings out of balance, or when an event of significant financial impact occurs-and these things happen to everyone at one point or another-then the healing process should begin without delay and the normalcy should be restored.