By virtue of being mortals, human FAs — unlike robo-advisors — are equipped to focus on human dynamics to create deep client relationships. Alas, most advisors don’t seem interested in, well, being so human. So says Susan Bradley, former FA and founder of the Sudden Money Institute, in an interview with ThinkAdvisor.
Still, she’s out to change the financial services profession to be “a true collaboration of human beings,” avows this authority on how to help clients cope with big life changes.
It is indeed the personal side of financial advice that drives client decision-making and creates stickier FA-client relationships, Bradley argues.
An advisor for nearly 25 years, she pioneered and addressed the notion that people experiencing a powerful life change, like losing a spouse or selling a business, require more from their advisors than just traditional financial planning.
First, she co-wrote a book, “Managing a Financial Windfall” (Wiley 2000) and the same year it was published, founded the Sudden Money Institute. Next, she created the Certified Financial Transitionist designation and its training division, the Financial Transitionist Institute, which has certified about 100 CFPs to use its structured process.
In the interview, Bradley discusses the four stages of transition and the institute’s technique to help clients going through crises make effective decisions and avoid making lousy ones.
A frequent public speaker, Bradley’s calendar highlights upcoming presentations for the Certified Divorce Financial Analysts (CDFA), Transamerica and the spring conference of the National Association of Personal Financial Advisors (NAPFA). She is just back from training CFPs at the RIA Summit in Mumbai, India.
A CFP since 1982, Bradley worked as an independent advisor for a decade, then joined Raymond James on the employee side for another 10 years. She sold her practice 15 years ago to focus on Sudden Money full time.
Think Advisor recently interviewed the native of Ridgewood, New Jersey, where she grew up with nine brothers and sisters. Speaking by phone from her Palm Gardens, Florida, office, she chatted about helping clients negotiate life-changing events, including how a “decision-free zone” can act to remedy “transition fatigue.” She also maintained that FAs aren’t being “buttinskies” if they suggest small social changes to expand clients’ lifestyle and well-being.
Here are excerpts from our conversation:
THINKADVISOR: Why do people have significant financial issues when going through big transitions?
SUSAN BRADLEY: Even if the [amount of] money doesn’t change, it might be about the responsibility or the way the money is used. That doesn’t lend itself to just traditional CFP good financial planning. The other element is that the driver of decision-making is the personal side. It takes much more effort than behavioral financial people want to assume because it’s more than information.
What’s financial services doing to help clients in this situation?
There’s an awareness that this is probably where the money is. So the industry says, “Go after women — they have the money. Ask them a bunch of questions because ‘they’ really like that.” But that’s just fluff.
However, haven’t advisors evolved into veritable financial guides vs. salespeople?
Yes — because the client has evolved. They’re more financially literate on kinds of services that are available. So clients vote with their feet. If they don’t like it, they have choices and can move. They talk with one another. One widow told me she’d been working with an advisor for five years, when a neighbor became widowed and asked her about him. She said: “Oh, no, don’t go to him. He never listens to you!” So she left that planner, and she and the neighbor went about interviewing several others.
Is your hope or expectation that most FAs will learn how to develop the personal side of advising to help clients more during a big life change?
It will never be the majority. It’s just not going to happen. It’s too much work. It does pay off; it’s probably where the money is. It’s where the satisfaction is. But it takes extra training, and the industry just doesn’t see [the need]. The majority of advisors don’t really care enough.
You offer the Certified Financial Transitionist designation. What do advisors who earn it bring to the party?
We integrate the technical and the personal. The personal side is how you connect with people so that you [can be the FA] for future generations. You’re helping [align] their money [with] the shift in their lives so that after an event, they really thrive rather than just survive.
What comprises “the personal side”?
A very deep understanding of human dynamics. When taking people through repositioning their finances when their life is changing, [Financial Transitionists] are coming at it knowing the [four] stages of transition that they’re struggling with. They can accommodate traits like anger, brain fog, and feeling overwhelmed. So, for example, they’re slowing down meetings, talking about one thing at a time, having shorter meetings.