Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Financial Planning > Behavioral Finance

Decisions, decisions . . .

Your article was successfully shared with the contacts you provided.

Emotions and family dynamics can sometimes prevent a client from doing what they need to do. As an advisor, it’s your job to listen and guide them to the right decision.

In life and in business, I’ve noticed something about people—they don’t like to make decisions. A task as simple as selecting a new couch or a new paint color can take months. So, it’s no surprise that the weightier decisions required to finalize an estate plan are often left in limbo for years.

With this nuance in human nature, it makes sense that successful financial professionals possess people skills that go far beyond numbers and analytics. Anyone can write and discuss an estate plan; only skilled communicators can get the plan executed.

As financial professionals, it’s time to move beyond unfinished business and help our clients experience real results. To do this, we have to precisely, purposefully move our clients through each stage of the planning process. We have to think of ourselves as financial surgeons who leave nothing to chance. Here’s how:

Focus on the diagnosis
We’ve all known people who have become inexplicably sick. In many cases, doctors treat them using a process of elimination. They try one remedy and if it doesn’t work, it rules out one potential diagnosis. Eventually, sometimes after months, they stumble onto the real problem and once they do, the remedy is amazingly simple.

That’s not the kind of financial surgeon I want to be. I prefer to spend time upfront so I can precisely diagnosis the problem before I recommend a course of action. To do so, I have to find the hidden issues and uncover what the client isn’t sharing. Perhaps the wife wants the estate split equally but the husband privately feels one child isn’t responsible enough to share ownership of the business. Perhaps the husband feels obligated to leave everything to his wife, but he knows in his heart that she’ll squander everything he’s worked for.

How do I get to the diagnosis? By doing whatever it takes and accepting nothing at face value. Sometimes I can get there by asking questions and listening. Sometimes I meet the spouse and even the children and business partners. Often, I take the time to meet the family’s attorney and accountant. Every interaction adds an important piece of information. When clients see that I’m thorough, they trust me and are more likely to confide in me. When I know the real underlying problem, finding an answer is easy.

Use your ears
Medical professionals use X-rays and MRIs to look below the surface. I use my ears. When I meet a client for the first time, I meet him as a friend. I don’t interrogate him, take notes, or focus on a pre-planned question list. I merely start the conversation and listen.

I can’t emphasize enough the importance of really listening. When you listen as a caring friend, you start hearing the meaning behind words. You begin to notice emotions and feelings toward other family members. Patterns in family dynamics begin to emerge. This is important because I can’t help my client get comfortable with crucial decisions if I don’t understand what’s really happening in the family.

During our conversation, I open with easy questions that can be answered with facts, and then I gradually move into complex questions that have to be answered with opinions. I spend a lot of time learning about each family member’s capability, personality and business/financial tendency. I never ask for numbers and data because those items can be faxed.

I’m looking for the story behind the numbers and data. My colleagues often ask, “How do you do it? Why do clients tell you so much?” All I can tell you is that I listen. I rarely have to ask many questions. Once clients feel that I’m truly caring and truly listening, they open up and share.

Get to the easy “yes”
In financial planning and estate planning, there are a few decisions that require very little contemplation. For example, if a client’s commercial building can be easily refinanced from a 7.25 percent rate to a 5.25 percent rate with no prepayment penalty, that’s a financial choice the client can easily make.

Likewise, in estate planning, there are some choices that are easier than others. I focus on revocable decisions first. They carry less risk and if the client changes his mind, we can reverse the decision. For example, if a client creates a will today, he is already better off than he was yesterday when the state was in charge by default. However, if he changes his mind about some aspect of his will tomorrow, it’s no problem. We simply change the will.

Other decisions, such as transferring assets, are much more difficult to change. If a good decision will have a potential ripple effect or if it will be impossible to reverse, I address it later in the relationship.
By focusing on the simple, revocable choices first, clients experience early success. They also get comfortable with me and comfortable with taking action. I’ve found that clients are much more likely to proceed with difficult decisions if they’ve first had success with easy decisions.

Emphasize the cost of inaction
Medicine is one place where big decisions are made quickly. That’s because the cost of delay is high. If a person receives a cancer diagnosis, he or she often has to decide the course of treatment in a week. If they don’t, the cancer could spread and the cost of inaction could be death.

As financial professionals, we have to make our clients understand that financial stalling also comes with a hefty price tag. When they don’t make financial decisions, they’re really making the decision to put the courts in charge of their money. Would any of your clients really choose that for their families?

Propose actions that address the underlying issue.
For most clients, the most challenging barrier to making big decisions is an unspoken underlying issue. (Think of this as the decision tumor.) This is usually something that clients can’t or won’t put into words because they don’t want to hurt a loved one’s feelings.

Most people want to be fair but they also want their assets to be managed responsibly. When those two desires conflict, or when there’s disagreement between spouses, turmoil arises and decisions stall. Many financial professionals can never address the underlying issue because they don’t take the time upfront to understand it. Left unaddressed, it will stand in the way of all big decisions.

I can almost always find a way to address the big underlying issue, but it’s a process. Before I do so, I spend an exorbitant amount of time listening, gathering all the soft data and meeting all the players involved. Then, I earn my clients’ trust by solving their easy problems and allowing them to experience easy wins. Finally, I make sure they clearly understand the high price of doing nothing.

Laser surgery
Then and only then, do I move into the financial equivalent of laser surgery. Compared to traditional surgery, laser surgery is quick and painless. There’s not a lot of bloodshed and recovery is quick. The same is true of my approach. When it’s time to excise the decision tumor, I don’t spend a lot of time talking about the problem.

My goal is not to create emotional turmoil–I want to move the family past it. To do so, I simply propose a creative strategy that meticulously and precisely solves the problem. My strategy will be a win-win-win for client, spouse and children. When the client considers my proposal, he has an “aha” moment. It’s not painful–it’s enlightening and unburdening. Hopefully, the client will proceed feeling 20 years younger with a huge weight off his shoulders.

We all got into this business to give others the gift of financial clarity. Yet, many financial professionals never achieve that ideal. They simply go through the motions of financial planning, leaving a wake of unfinished business. To achieve true success, we have to go beyond the motions and get to the emotions behind their decisions. It’s not fast, it’s not easy, but it is exceptionally rewarding. Winston Churchill once said, “History will be kind to me for I intend to write it.” I believe that history will be kind to my clients and their families because we care enough to write it.

David Simkowitz is the founder and president of Simkowitz Co. in Brooklyn, N.Y. He has served as the president of the Executive Committee of Guardia’s Leaders Club. For more information, visit


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.