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How to Help Clients Embrace Emotions to Make Better Financial Decisions

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For optimal investment decisions, clients must first “attach their heart to their financial plan,” Sandi Bragar, a partner at Aspiriant, tells ThinkAdvisor in an interview. She argues that addressing clients’ emotional side is as important as mapping out asset allocation and tax-planning strategies.

Key to Bragar’s success with Aspiriant’s high-net-worth and ultra-high net worth clients is connecting the technical and emotional aspects of money. Many are women in transition and experiencing a significant life change — times when emotions typically are supercharged. 

Bragar digs deep to discover what clients care about most, then designs goal-oriented financial plans that harmonize.

Based in San Francisco, the CFP, a three-time honoree of Barron’s Top 100 Advisors, is also a managing director of Aspiriant’s planning strategy and research team. The independent firm manages $12 billion in assets.

What’s her outlook for the stock market in 2021? “Cautiously bullish” is the answer. In the interview, she explains why.

Bragar joined Aspiriant’s predecessor firm, Kochis Fitz, nine years before its 2008 merger with Quintile and within three years had become a partner in the RIA.

In the interview, Bragar, 49, discusses the market rotation now in progress — from growth to value stocks — and reveals four of her top picks. Last year, value was “sort of left for dead,” she says, adding that in the fourth quarter, however, signs of life started to emerge. 

Bragar, a CPA who grew up in the Los Angeles suburb of Agoura, started out in 1993 as a senior tax consultant at Ernst & Young in San Francisco and New York City, then segued into financial planning.

As an economics major at the University of California, Santa Barbara, she knew that “being a financial planner was exactly what I wanted to do. My compass was always pointed in the direction of helping clients improve their financial decisions,” she recalls. Still, she opted to first acquire “some related experience” as a foundation.

Bragar’s advice to aspiring female FAs? Join the “great profession” of advisory, “a very open one” where “people help each other. It’s not cutthroat,” she opines.

ThinkAdvisor recently held a phone interview with Bragar, speaking from her home north of San Francisco. Co-host of the podcast “Money Tales,” she also plans to launch an online version of the personal finance boot camp for women she was running that the pandemic cut short.

The training sessions stemmed from “women’s money circles” Bragar hosted in her home on Sunday afternoons to educate accomplished women about finance and encourage them to talk about their relationship with money.

“These were sophisticated women, many with MBAs, who had traveled the world. But there was a lot about personal finance they didn’t know or understand,” she recalls.

Here are highlights of our interview:

THINKADVISOR: What’s your key strength as a financial advisor?

SANDI BRAGAR: The ability to balance between the technical and the emotional sides. In particular, it’s really helped me in working with couples, especially those who aren’t on the same page. If the client can first attach their heart to their financial plan, all that technical stuff makes a lot more sense to them and takes on meaning.

Please elaborate.

The way I see it, there are two sides to money: the technical and the emotional. Many wealth managers focus on the technical: asset allocation, tax planning, insurance planning — all the numbers and nuts and bolts. But the emotional side has a much greater influence on decisions that clients make toward achieving their goals and changing their lives.

Just how do you focus on the emotional side?

You need to understand where the client is coming from by asking them the purpose of their wealth and what’s most important to them — then figure out how to design the next steps to optimize that wealth and support it. You need to figure out what they care about most and in that context work with them on the planning effort.

You have many female clients who are in transition — in the midst of divorcing or caring for their parents, for example. These are emotional times, are they not?

Yes. People going from one normalcy in their lives to another are transformed because ultimately they achieve a new normalcy. That passage can take a long time, and a lot of emotions can surface. Sometimes they’re positive, but oftentimes it’s the opposite: They feel lost, confused, overwhelmed, in a fog. It’s really important to be aware of all this.

What would be one situation?

If a client is feeling overwhelmed, there are ways we can help them through a process that’s different from [using others] should they not feel that way.

Let’s talk about the investing side. What’s your general outlook for the market in 2021?

Cautiously bullish. There are better returns ahead, though probably lower than what we’ve seen over the last 20 years. It will take some time for the COVID-19 vaccines to make their way through the economy. But once that happens, we think the world is going to get better. There’ll still be big question marks for commercial real estate. It seems like that will take a while to come back. If it ever does, it will be transformed.

Broadly, what investment strategies are you recommending now?

If people have very short time horizons for investing, this probably isn’t the time to put money in the market. But for people with long time horizons, like clients of ours who are corporate executives, family business owners, entrepreneurs, we’re managing money for their nest eggs so they can continue their [upscale] lifestyle.

Why is the market starting to rotate away from growth stocks to value stocks?

Because value stocks hadn’t generated much positive returns in [2020]. It’s been all about tech — the stay-at-home companies. Value has been, sort of, left for dead, if you will. People aren’t spending money in the same way as they were before the pandemic. What’s going to help turn things around [for] consumer products [companies] is when people are able to leave their houses safely and comfortably and lead the life they want to lead.

So are you investing in value stocks?

That’s definitely where we’re putting clients’ money. We see a lot of opportunity in value stocks around the globe. You saw their shoots coming up out of the soil during the fourth quarter [of 2020]. We expect much better returns from value versus growth as the vaccines work their way through — not only in the U.S. economy but internationally as well.

What are a few stocks that you like?

Pfizer, Coca-Cola, McDonald’s, American Tower, which, for example, provides infrastructure for cellphones.

What advice would you give female FAs and other women who’d like to become advisors?

It’s such a great profession and great place for women, in particular, to work because there are so many different skill sets an advisor needs in order to care for clients: technical skills, emotional skills, communications skills. And it’s a very open profession, a helping profession — people help each other. It’s not cutthroat — in my experience, at least.

Have you ever encountered bias, discrimination or hurdles because you’re a woman in the industry that you had to overcome?

The only thing was several years ago when I received an industry award recognizing me as a top advisor. When I got to the VIP party, I discovered it was at a cigar bar! There were very few women there. The [organizers] were a little tone-deaf to hold it there. That was the only time in my professional experience when I didn’t feel that I fit in as well.

How can the industry attract more women to become FAs?

There’s so much jargon that puts off a lot of people, I think — clients as well. We need to be able to communicate in a manner that allows [comprehension] and feeling empowered and knowledgeable to make decisions. It makes you feel like you don’t belong when you don’t know the language being spoken — people talking about “alpha” and “beta.” It’s a turnoff.

What does the future hold for the FA profession?

As I look down the road, more and more people are going to need the help of financial advisors and wealth managers because money is getting more and more complicated. And there are so many more women generating wealth and who are also inheriting wealth that need to be served. Some women prefer being served by female advisors.

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