How to Raise Sensitive Issues with Clients


How to Raise Sensitive Issues with Clients

September 2, 2014

by Dan Richards

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Important issues – so-called elephants in the room – threaten the financial futures of clients and their families. Clients and advisors normally recognize these issues, but because they are emotionally charged, they are difficult to discuss.

Here are three steps to talk about these subjects:

  1. Bring up the issue at the right time.
  2. Raise it in the right way.
  3. Introduce possible solutions.

Elephant in the room issues

Here are typical issues that can sabotage even the best-crafted financial plans:

  • Clients who haven’t had open conversations with adult children about their financial situation and estate plans.
  • Instances in which providing ongoing financial support to adult children jeopardizes clients’ finances or creates potential disharmony among other children who don’t need support.
  • Wealthy clients who plan to remarry without proper prenuptial agreements or whose children are getting married without agreements of this kind.
  • Situations in which excessive caution in portfolios creates the risk that clients will run out of money.
  • Circumstances in which excessive concentration in one asset or asset class creates risk for client finances. This is especially true of business owners whose wealth is concentrated in their family business.
  • Cases in which one spouse in an aging-client couple is experiencing a decline in cognitive capacity.

Raise tough issues at the right time

The first step to raising sensitive issues is to pick the right time, when the client is most open to a conversation. This can be towards the end of a regular review in which things have generally gone well, so the client is feeling positive. It can also be during a lunch after a meeting or to celebrate the client’s birthday, when you’ve generated goodwill that you can tap into.

Events in the news can sometimes open the door to a conversation. When Sopranos star James Gandolfini passed away unexpectedly, there was considerable discussion in the media about the large taxes that were due on his estate and whether his affairs had been structured in a tax-efficient fashion. If you had been meeting with clients who resisted talking about estate plans, you could have used some of this media coverage to bring up the clients’ situation.

Here’s another example. Research shows that over half of wealthy Americans haven’t talked to their adult children about their finances. A New York Times article recently highlighted the confusion and cost that families can face when people pass away without having made their intentions clear. Articles like this one provide an opportunity to raise this issue with clients.

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