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Frances E. Twiddy, CFP, has confronted enough client objections in her quarter-century as an advisor to know instinctively when to press her case and when to retreat.

“I have learned that it can be a mistake to be too persuasive,” says Twiddy, principal at Frances E. Twiddy Associates in St. Claire Shores, Mich. “Even if you convince someone to see things your way, you end up having to constantly re-persuade them of the need for whatever investment you convinced them to make. You need to consider whether you are willing to invest the time and effort to keep convincing them as time goes on, knowing that client is likely to pull out [of the investment] at the first sign of trouble, even when it’s clearly not in their best interests to do so.”
Overcoming client objections is an art as much as a science. There’s no foolproof formula or surefire method for getting a client to drop an objection to a recommendation the advisor staunchly believes is in that person’s best interest. Since no two clients are exactly alike, determining the best course of action when confronted by an objection involves nuance, tact and an ability to read clients and react accordingly. Still, advisors say, some tactics tend to work better than others with certain types of objections. Here we look at some of the most common varieties of client objections, with suggestions on how best to counter them.

OBSTACLE: Reluctance to invest in a product the client isn’t aware of or cannot fully comprehend.

COUNTERING TACTICS: Twiddy says she encounters the fear of the unknown often, especially with alternative assets such as hedge funds. “I’ll tell clients I don’t expect them to go out and get a CFA [license] so they can understand these things. I’ll open the discussion by explaining why it’s important to have assets that don’t correlate to stocks and bonds, and demonstrate how [alternative assets] can effectively lower risk and raise return in a portfolio.”

The go-slow approach often works in such a situation, she notes. “Maybe the correct allocation in this case is 10 percent of the portfolio but instead we start with a smaller amount, with plans to build from there, so I’m not asking them to make an all-or-nothing commitment.”

With maneuvers such as life settlement, it’s often simply a matter of making clients aware there is a secondary market for life insurance and that in the right situations, selling a policy makes financial sense. “We show people there is a well-established life settlement market that is highly regulated, highly structured and highly capitalized,” explains Scott Kirby, co-president at Advanced Settlements Inc., a life settlement broker in Orlando, Fla. “Then we show them their options — that they can take a policy to market and get it valued, then decide whether or not to sell it.”


COUNTERING TACTICS: To overcome the cost objection, says Randolph J. Shine, CFP, of Shine Financial in Deerfield Beach, Fla., the onus is on the advisor to teach the client about the difference between cost and value — how the client stands to benefit from a particular course of action, and why those benefits outweigh the costs.

OBSTACLE: Unfounded, borderline irrational distaste for a product.

Sometimes client objections arise not from a reasonable assessment but from emotion. In those situations, says Twiddy, advisors are wise to “acknowledge whatever kernel of truth might be in the client’s response to the recommendation.” Remain dispassionate about the recommendation. “Don’t think that because the client doesn’t like what you recommended, the person doesn’t like you.” Instead, she says, take a step back and initiate a discussion about the merits and drawbacks of the product, methodically building your case from there.

OBSTACLE: Misinformation or preconceived notions.

Information bombards clients from all angles: on the Internet; on television — even the golf course. Some of it is legitimate and helpful; some is inaccurate, inapplicable and counterproductive. When misconceptions or preconceived notions get in the way of a solid recommendation, the advisor’s best first move should be to explain that in the world of financial planning, “There’s no such thing as an inherently good or bad product,” says Joel Javer, CFP, principal at Sharkey, Howes & Javer in Denver. “Every product fills a specific need and has a purpose.”
Next, says Shine, offer a step-by-step explanation of how a particular product best addresses the person’s needs. “I’ll say, ‘I can’t compete with rumors. But let’s take a look at why, even though this product may not be the best thing for your neighbor or your mechanic, it is appropriate for you.’”

OBSTACLE: Recommendations are rejected without a clear reason.

COUNTERING TACTICS: Javer says his first step to counter a nebulous objection is to make it his problem instead of the client’s, and suggests saying, “Perhaps I misunderstood your goals…” Doing so may get the client to “open up and explain why they are feeling the way they are about this,” Javer says. “Usually it leads them to reveal information that perhaps they haven’t shared with me before, either because they forgot or because they didn’t want to share it.”

OBSTACLE: Client rebuffs repeated attempts to endorse a certain course of action.

COUNTERING TACTICS: On rare occasions a client will repeatedly reject a recommendation, even when the fit is perfect. Sometimes, says Shine, a refresher course where the advisor and client revisit the mutually agreed-upon priorities, goals and needs spelled out in the financial plan will change the person’s mind. If not, rather than running the risk of hurting the relationship, Shine may go to Plan B. “I’ll say, ‘Let me go back to work to find another solution. Let’s see if I can find an acceptable substitute.’”


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