When bad things are happening to people all over the world, stress reactions start to run the show. Panic, rage, conspiracy theories, and other forms of catastrophizing proliferate. The reptile brain is in charge. As evidence, I cite the recent behavior of my own husband. Michael, the calmest and sanest person I know when it comes to money, has been sliding in and out of what might be called controlled panic. What he says (I know you’re probably hearing and feeling this yourself) is, “I try to stay calm and remind myself that we’re still okay, but I don’t know how to predict what will happen next. I planned for the worst-case scenario, but this is so much worse that I can’t even imagine how bad it could possibly get.”
I’ll wager that more of your clients are exploding in anger, dissolving in tears, or launching into tirades on topics that once would have seemed over the edge–for example, insisting that the market crash has been contrived by well-funded jihadists who are making obscene profits betting against the West. Some clients probably blame you for the sorry state of their finances, if not for the entire worldwide economic collapse.
Rick Kahler of Kahler Financial Group in Rapid City, South Dakota, told me that one client attacked him hotly about the decline in her portfolio and her other assets, complaining that his “fees were too high, returns terrible, [and she] found no value in financial planning. I snapped and suggested she terminate since she was so unhappy with me.” Kahler, whom I would unhesitatingly term one of the leading therapeutic educators in the financial advisor community, added with wry self-deprecation, “This is from the guy who’s co-authored how many books on how to ‘be’ with clients.”
He contacted the client soon after this meltdown. “She said she had no intention of terminating me, so I suggested we start over.” Altogether, he says, “I’ve been fired by six clients since December. Four are still clients.”
If you’re having difficulty managing versions of controlled panic in your clients (or yourself), take note of the situations below. They may suggest ways to cope with this pervasive atmosphere of frustration, anger, fear, and even despair.
Q: A longtime client has given me discretion over $2 million, which I invested in a balanced portfolio. Last year his investments were down 18%. Not bad, considering–but his brother-in-law claims to have an advisor who produced a 10% return last year, as he supposedly has done with amazing regularity for years. I find it hard to believe that anyone could produce a 10% return in 2008, but questioning his brother-in-law’s veracity (or this advisor’s honesty) could cost me a very valuable client and possibly damages in a lawsuit. Help!
A: You have good instincts in hesitating to openly question your client’s brother-in-law or his advisor. But you can use the power of stories, which have the ability to open our unconscious up to other ways of seeing reality, in order to make your point.
First, take ample time to listen to your client express how upset he is about his shrinking portfolio, and share with him your own perceptions, thoughts, and feelings about it. Then I’d suggest telling a few stories (which you might attribute to other people) about trusted advisors who claimed consistently higher returns before being unmasked as frauds. Bernie Madoff is the most egregious example that springs to mind, although there are certainly others. The more stories you can tell where the moral is “if it sounds too good to be true, it probably is,” the more you’ll weaken your client’s attraction to a scheme that could end up adding betrayal to his terrible financial loss.
Of course, he may react so obstinately or defensively that you’re tempted to blurt out, “Good riddance, then! Go put your money with this crook and see how far it takes you!” If so, I’d step waaaay back, breathe deeply, and count to a hundred (or do your own form of stress relief). Remind yourself that your client’s longing for a magical solution has more to do with the impact of his losses than an attack on your competence or your character.
Q: This may sound wacky, but bear with me. One of my biggest clients, whom I suspect of being a racist, is convinced that President Obama is a pawn of a worldwide left-wing conspiracy to redistribute wealth in America. He believes the financial crisis was engineered to allow these socialists to make their move. I’ve never had a problem keeping politics, religion, and race out of money management discussions before, but now I feel like I’m groping through a minefield. How can I find my way out?
A: Oh, boy. I’d take some time to reflect on your relationship with this client, and decide whether you want to keep working with him. If you feel reluctant to serve a client whose worldview is so dramatically different from your own, you might refer him to a planner whose outlook is closer to his.
On the other hand, you may decide that there are aspects of the relationship you like and value, or you simply can’t afford to let him go. In this case, think about ways to deflect the conversation away from his “wacky” views and back to what you consider sensible and productive dialogue. You might say something like this: “Since it’s impossible to know President Obama’s deepest motivations, let’s focus instead on your own goals and desires, which we can ascertain and plan for, and see what changes we need to make in light of current developments in the economy.”