Having Difficult Conversations: A Skill Every Financial Advisor Needs

Hey, we need to talk….

Oof! For many of us, this is one of the scariest phrases in the English language. And yet the ability to have a difficult conversation with other people is one of the most valuable skills you can possess.

Not being able to address the “elephant in the room” is a common cause of miscommunication, confusion, and frustration in both personal and professional relationships. In a survey conducted by Tolero Solutions, 53% of people cited unclear communication as the biggest issue preventing them from having a good customer service experience!

As a financial advisor, talking about difficult subjects is unavoidable. Developing a holistic financial plan for your client will require you to address some of life’s most sensitive and uncomfortable subjects, including death, divorce, job loss, and medical needs. (Not to mention the generally taboo topic of money, itself.)  

So how do you go about taking the pain out of talking about tough topics to communicate more clearly and effectively?  

It Starts With Trust

First, start with trust. In the words of Stephen Covey:

“Trust is the glue of life. It’s the most essential ingredient in effective communication. It’s the foundational principle that holds all relationships.”

Without a foundation of trust, broaching an uncomfortable issue can feel like intense judgment or an outright attack on a person’s life choices. Within a trusting relationship, having an open and honest conversation comes from a place of caring—caring that is much deeper than just a business arrangement with mutual financial benefits. Caring that originates from a genuine interest in another person’s whole self, including their interests, hopes, dreams, concerns, and ambitions.

Easier said than done, right? How do you go about gaining someone’s trust?

The first step in building a trust-based relationship is exclusively internal. For many people, becoming trustworthy requires a mindset shift from an inward focus to an outward focus. One of the best books on the topic is “The Outward Mindset” from the Arbinger Institute. The Arbinger Institute describes a self-focused inward mindset as seeing other people as objects. People are something to be used as vehicles to achieve our own objectives and results, as obstacles that are in our way or causing problems, or as irrelevancies that can be ignored. An outward mindset is defined as seeing others as people who matter like we do. We take into account their needs, challenges, and objectives. With an outward mindset, the intent of communication changes to focus on collective results and avoids the pitfalls of individuals pursuing their own goals at the expense of others.

Learn to Listen

Next, start moving away from the mentality that the value you provide your clients comes exclusively from the time you spend imparting information. While your knowledge and expertise are often the primary drivers that attract clients to you, the growth of your advisor-client relationship accelerates exponentially more in the time you spend listening than the time you spend talking! In fact, Kitces posited that listening is the one skill that has the biggest impact on being a successful financial planner.

Listening isn’t easy to master, but, like most skills, with practice, it can be improved. Of primary importance is the necessity of ensuring that you are fully present in the moment and able to give the other person your undivided attention.

To start, make sure that you are removing any distractions that would affect your ability to focus on the conversation. Try to create an environment that limits the amount of visual and auditory interruptions that will occur. Everyone has slightly different distraction triggers, but some of the common disruptors to avoid include phones ringing, coworkers or visitors dropping in, or new emails or Slack messages.

For example, I know that facing a window while talking to someone can cause my gaze to drift to the action happening outside, so I try to position myself in such a way that the window is out of my line of sight. If you know that your office isn’t conducive to concentration, then it would likely be worthwhile to find another venue for the meeting.

Ask Questions

While listening is key, being a good listener does not require that you completely abdicate all participation in the conversation. Your primary objective during the listening phase is to develop a clear understanding of what is being communicated to you; just passively nodding and “um-hmm-ing” will not be sufficient.

You will likely need to clarify the information presented by the speaker through follow-up questions. Some people are naturally effusive when given an opening to speak, but others may need some encouragement. Asking open-ended questions is often the best way to create an opening for someone who is struggling to verbalize their thoughts and emotions.

Constructing thoughtful questions is both an art and a science. The good news: asking more questions helps improve your emotional intelligence over time which makes it easier to ask better questions.

However, there are a few things worth avoiding when using questions to solicit information or clarify your understanding. The biggest mistake to avoid is allowing your focus to shift from the responses that you are receiving to the formulation of your next question. If you lose the train of communication because you are working too hard on coming up with questions to ask, the benefits of asking those questions have also been lost.

Another way that questioning can backfire is through leading questions. Asking questions along the lines of, “Maybe you should..?” is really just a thinly-veiled offering of advice and does not further the conversation or provide new information.

Finally, asking primarily closed-ended questions can restrict the flow of conversation. Open-ended questions act as an invitation for sharing and show interest in another person’s thoughts, whereas questions that push for a “yes” and “no” response are best reserved for confirming your understanding of what has been said. 

You may be thinking, “Ok, I’ve listened. I’ve asked good follow-up questions. So, can I talk now?” Nope. Not quite yet! One of the more frequently skipped steps in important conversations requires taking the time to restate and reflect.

Once you believe you are comprehending the other person’s message, it’s time to test out your perceptions by rephrasing what you’ve learned and repeating it back in such a way that invites the listener to correct any missed points or mistaken assumptions. Using statements similar to: “If I am understanding correctly, what you are saying is….” help ensure that your comprehension is aligned with the speaker’s message and intent.

If you receive feedback that indicates that your initial understanding was off-base, that is okay! You can repeat the questioning phase again to suss out the areas of confusion and realign your interpretation, then restate and reflect the amended information to confirm you are back on track.

Handling Strong Emotions 

One of the challenges that may come up through the conversational process is the presence of strong emotions. In many cases, talking about tough topics can elicit feelings of sadness, anger, shame, or fear.

It can be intensely uncomfortable and difficult to continue a conversation when one party breaks down in tears or lashes out in frustration, but ending a discussion prematurely at the onset of an emotional response can prevent critically important topics from being articulated or resolved.

So how do you manage emotional volatility?

The most important part of your response will be controlling that which is in your power to control: your reaction. If the conversation is heating up to the boiling point and voices are escalating, now is a good time to take a pause, breath, and step back from the situation.

If you’ve just given advice that someone doesn’t want to hear, it’s possible they’ll try to defend themselves by attacking your statement. Don’t allow yourself to become defensive in return, which will only escalate the tension.

It’s okay to let them vent briefly, but feel free to stop the meeting and reschedule if they aren’t able to defuse their frustration sufficiently to continue the conversation in a constructive manner. If they are able to resume the conversation, try to seek out the “why” behind their response to get to the real heart of the issue.

Oftentimes, tears can be just as hard to handle as an angry response. Fear, sadness, or even embarrassment can cause someone to cry, sometimes quite unexpectedly.

When faced with a crying client, it is generally best to sit quietly and allow them to process their emotion. Letting them know it's okay to take their time and then calmly waiting for them to indicate they are ready to continue is helpful in acknowledging and validating their emotions.

Offering to end the meeting or leaving the room to give them some privacy, while well-meaning, can sometimes exacerbate feelings of shame over the show of emotion or create a sense of pressure for them to hurry up and get their feelings back under control.

Introducing a Difficult Topic

What about those times when a topic needs to be addressed, but it doesn’t come up naturally in conversation? How do you start the conversation on the right foot?

One method that often helps create the psychological safety needed to embark on a difficult dialogue is asking permission. By asking permission to discuss the topic, you are demonstrating respect for the individual’s autonomy and creating an opportunity for you to explain why this conversation is needed.

State the topic of discussion in the question and include a brief explanation of why it is important. Whenever possible, give the respondent the option of postponing the conversation. Asking: “Is now a good time or can we set another time to discuss this topic?” provides recourse for the other party to mentally prepare themselves.

Once you’ve received permission to proceed, speak directly with empathy. As Brené Brown says, “Clear is kind, unclear is unkind.”

State the facts or issues in a straightforward manner without assigning blame (“If you’d only tried harder…”) or playing the victim (“This is really hard for me to say….”). Give the listener time to respond and ask questions. Ask them how they feel about what you are saying, and allow them time to process the emotions around the information. If you make a mistake, own it, apologize, and restate the comment.

Practice Makes Perfect

Even with experience, having difficult conversations is unlikely to become something you enjoy doing, but with practice it will become easier. One way to help prepare for potentially challenging communication is through role-play. Having mock conversations on tough topics with other people with whom you have already developed a high level of trust and getting their feedback on your communication can be invaluable in cementing the needed skills for real-life interactions. 

In parting, the single most valuable piece of advice I can leave you with is this: don’t let the fear of discomfort prevent you from having the conversation. More hurt is caused by what goes unsaid than by even our somewhat flawed and ungraceful communications.

One of my favorite quotes comes from none other than Mr. Rogers: “Anything that’s human is mentionable, and anything that is mentionable can be more manageable. When we can talk about our feelings, they become less overwhelming, less upsetting, and less scary. The people we trust with that important talk can help us know that we are not alone.”

Difficult conversations are inevitable, but by engaging wholeheartedly with the intent of finding a mutually beneficial solution, you unlock a powerful tool in strengthening relationships in all areas of your life.

About the Author
As the Talent Development Manager for XY Planning Network, Ashley champions the company’s culture and values by building and executing training and development strategies focused on motivating, engaging, and educating XY’s committed and high performing team. She is a self-professed “geek” with a love of all things related to learning and development. Outside of work, Ashley is frequently spotted petting strangers’ dogs, paddle boarding, backcountry skiing, reading science fiction novels, and photographing pretty much everything around beautiful Bozeman, Montana.