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Navigators: How to Guide Clients Through Big Life Changes

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Six years out from retirement, the executive had all his assets invested in the Fortune 500 company where he worked. He fully expected the stock to double in the next few years.

His wife didn’t believe it. Her fear was that the stock would tank and they wouldn’t be able to retire. Her own part-time salary at a nonprofit couldn’t possibly create the nest egg they needed.

“When this couple came to see us, you could feel the tension,” said planner Brian Henderson of the Keystone Financial Alliance in Atlanta. “He was very confident about the risk they were taking, and she was extremely nervous.”

Clients who need help managing financial transitions like retirement are becoming more and more common, according to Susan Bradley, founder of the Sudden Money Institute in Palm Beach Gardens, Florida. “There isn’t an advisor who doesn’t work with clients grappling with transitions—the loss of a spouse, retirement, inheritance, divorce, sale of a business, marriage, a major career change, a large sports or entertainment contract, a legal settlement, a change in health or an elder transition,” said Bradley, who is also a CFP. “But we weren’t trained to deal with the human side of any of these issues. We were trained to make the numbers work as best we could, and the client had to deal with all the rest.”

This missing link in advisor education inspired Bradley to design and develop a powerful program leading to the trademarked designation of Certified Financial Transitionist (CFT). A CFT is usually a CFP, held to the CFP fiduciary standard with extensive training in change management added to their traditional CFP education in financial management. To date, more than 120 legal and financial planning professionals like Henderson have completed the four-part program.

“Fifteen years ago, there was no financial planning model that covered the personal, human experience of managing change,” Bradley recalled. “As a CFP, I was comfortable with the technical side of most of these situations. I was a big advocate of financial literacy and participated in many financial literacy initiatives over my 20 years as a planner. But there was still something missing: transition literacy, which is fundamental to managing change.”

When Bradley couldn’t find information about guiding clients through the personal side of change, she researched and wrote the book she had hoped to read—“Sudden Money: Managing a Financial Windfall.” Offering the first financial planning model to deal with major life transitions, it became a founding document for the Sudden Money Institute (SMI), which she opened in mid-2000 as a collaborative think tank of financial planning and legal professionals.

“Together, we started to look into transitions,” she said. “We wanted to understand some of the tough or regrettable decisions people made in response to these life events.”

When 9/11 happened, it underlined the need, and the tremendous difficulty, for people in trauma to make important financial decisions. SMI’s transition management program evolved as a way to help people make good financial and life choices in the face of sudden change, while avoiding really big mistakes.

Resolving a Couple’s Conflict

Henderson’s approach to working with the Fortune 500 executive and his worried wife combined SMI’s transition management tools and processes with his own expertise.

“We believe transformation comes from knowledge and awareness,” Henderson explained. “With this couple, we needed to understand what their blind spots were and where they might have some gaps of understanding.”

His first step was to learn the clients’ preferred communication styles. They turned out to be complete opposites. “The husband was analytical and needed to see all the details,” he recounted. “But details made the wife feel overwhelmed. She just needed to trust us and the recommendations we provided.”

Thus, Henderson’s initial objective was to build trust by sharing his firm’s history and process. This information was particularly important to the husband, helping him feel that they had come to the right place.

Then Henderson worked on dispelling myths they had about retirement. No. 1 was their belief that the husband would have to work until he was 65—another six years—in order to qualify for the Social Security and health insurance benefits they thought they would need. By walking them through different financial scenarios, Henderson enabled them to see that they could retire three years earlier than they expected.

In the process, the couple also came to realize that it wasn’t necessary to take the risk of keeping all their assets in his employer’s stock. “When they understood that they could reach all their goals years earlier than planned,” Henderson said, “the husband agreed to sell 75% of his company stock and the wife burst out crying in relief.”

Understanding How to Communicate

“We find that when people go through transitions, there’s a diluting of some life skills, including the way they communicate,” Bradley said. “They’re not as clear; they revert to their hard-wired communication preferences. If you worked with them successfully before the stresses hit, now you may find they need to communicate differently.”

As Henderson’s story illustrates, CFT training puts a high priority on learning what makes a client feel comfortable and productive. For example, Bradley noted, some people want a detailed meeting agenda beforehand. Others dislike homework and simply want to know that you will lead them through the meeting.

Advisors also need to know how clients like to receive information and recommendations. As Bradley pointed out, some may want a one-page overview with bullet points. Others prefer to have all the details.

Another preference is how clients make their best decisions. Bradley suggested, “Do they like to know the financial options? Do they like to talk about lifestyle possibilities? Do they prefer to have a lot of information before they come in so they can make decisions during the meeting, or would they rather take the information home afterward and think about it?”

SMI has created a list of communication and decision-making style preferences, from which clients are asked to choose the two or three that are most pertinent to them. Advisors learn to ask clients what these choices really mean.

For example, Bradley told of interviewing a woman who identified a need for control as her top priority. When questioned, the woman explained that what she really needed was not to feel out of control—a very different thing. By asking what types of situations made her feel out of control, Bradley was finally able to get at what made the woman feel comfortable in meetings, ready to absorb information and able to make choices.

“Without this discovery process, it would have been hard to have a meeting with her,” Bradley added. “She appeared dysfunctional and unable to make decisions.”

Instead of imposing your own style on a client struggling with change, determining the client’s own preferences can lead to profound discoveries. “The Certified Financial Transitionist is the client’s thinking partner, not the expert,” Bradley said. “The client is the expert.”

The ‘Decision-Free Zone’

CFTs are trained in sorting through what needs attention, prioritizing issues into “now,” “soon” and “later.”

“Now” is urgent, to protect personal well-being. “Soon” is important but not pressing. “Later” could be important, but need not be accomplished quickly.

Items on the list aren’t limited to the obvious financial decisions, Bradley added; they might include such issues as the timing of a gift to their church or the possibility of moving.

Most transitions take years, not months, and can be very tiring. Sometimes people just need to take a break. In the CFT program, advisors are trained to help clients figure out whether they need time to rest or are just stuck and need to be pulled forward. This helps prevent frustrating situations where a client inexplicably withdraws from contact, ignoring the advisor’s messages.

A related SMI tool to help stressed-out clients is the “decision-free zone.” This mutually agreed-on time-out from making nonessential decisions lowers the stress level because the client only needs to focus on a short list of things to be done right away.

“If the client needs to rest, you set up an agreement,” Bradley explained. “It might be ‘Okay, we’ll take six months without making any decisions. I’ll check in once a month. You don’t have to respond; I just want you to know that I’m there if you need anything.’ It’s an unbelievably simple but helpful thing to do.”

A Widow’s Tale

After losing her husband a year earlier, a widow whom Henderson met was being urged by her legacy financial advisor to make major investment changes. The pressure of so many important decisions so soon after her spouse’s death made her extremely uncomfortable. Meanwhile, things at home were becoming more disorganized and out of control because the husband had handled bill-paying, insurance renewals and other day-to-day money issues.

Not least of all, losing him had fractured the social network that previously made her feel happy and alive.

“When she came in to see us, we considered her to be stuck,” Henderson said. “She was not making decisions she needed to make.” Using the core Sudden Money tools and resources, he discovered that she was a visual learner who needed to run things by her parents and a brother before making a decision.

“Understanding that, we invited those family members to join in the conversation during the initial decision-free zone,” he explained. “They weighed in on what decisions needed to be made now, soon and later, and we helped her accomplish those tasks.

“Our relationship with her has gone on for more than five years,” Henderson concluded. “It’s evolved from helping her stay safe in the initial stages of her transition, to now helping her rediscover who she is and who she wants to become.”

A Sample Syllabus

“We’ve found that there are three stages of widowhood,” Bradley said. “The first stage is numbness, just absorbing the shock of change. Stage two is waking up from the numbness and starting to function. The last stage is renewal or time to dream again, which becomes the new normal.”

During this very stressful time, it’s hard for an advisor to know what to do or how to introduce sensitive issues. SMI’s resources include a 300-page guidebook and directory covering all three stages, including worksheets for widows and advisors. A take-home guide for widows is also available.

A particularly useful tool is SMI’s “Am I Okay?” worksheet. This is used during the numb stage to answer the critical question of where the money will come from to cover immediate, ongoing and one-time expenses. “This isn’t the detailed cash-flow plan that you’ll do eventually,” Bradley explained. “But it helps you reassure the widow that she’s okay, and that she can take some time to heal before she needs to do more planning.”

Similarly detailed tools have been developed for a wide range of other financial transitions. For instance, the course also covers working with highly paid entertainers or athletes. In that case, Bradley said, “We look at cash flow, family commitments, insurance coverage and investments. It’s like a fire drill about what they would do if the checks stopped coming.”

Coping with Sudden Change

“This is amazing work for anyone going through major life transitions,” said Peggy Frye, a CFP, registered life planner and managing member of Glenayr Wealth Advisors in Brightwood, Virginia, who completed CFT training in 2013. Large, wealthy families are Frye’s primary client base, and she is frequently involved in helping them and their children work through life changes—some of them quite sudden.

For example, after the matriarch and patriarch of one client family decided to move from the suburbs into the city, Frye guided them through two years of estate planning and selling property. Then fate intervened. She said, “I met with them in our normal monthly meeting and asked if anything was new, and he said, ‘I’ve been diagnosed with cancer.’

“At that point your agenda is out the door,” Frye went on. “We needed to focus on this new transition. So using the Sudden Money protocol of ‘now,’ ‘soon’ and ‘later,’ we decided what could be done in the estate plan before his surgery and what could wait until afterward.”

She summed up, “When something critical happens, you need to help people get beyond the deer-in-the-headlights feeling and create a process that gives them comfort that they’re safe, so they can move forward.”

The Transitionist’s Goal

“Our underlying goal with any client is to help them organize their situation,” Henderson told us. “Whatever they’re juggling, we want to gather the information to be able to help them meet their goals. That means meeting them where they are in order to understand their needs and hurts, challenges, opportunities and hopes.”

With a couple, it’s critical to explore what each one needs to feel comfortable through a major life transition. While steering his retirement-focused client couple through their tricky financial transition, Henderson also helped strengthen the bridge of intimacy between them.

For those considering the advantages of a CFT designation, Bradley pointed out, “We think the public deserves to be able to distinguish between traditional financial planners and those who have also gone through training in change management.”

SMI participants include experienced advisors like Henderson and Frye who want to learn more and elevate their client experience, as well as others in the early stages of their career who earn continuing education credits while learning.

Few things in life are as constant as change. And if Susan Bradley’s mission continues to succeed, many more advisors will have the enhanced skills and resources to help their clients cope with it.