6 Financial Advisor Strategies for Difficult Money Conversations

Ryan Shanks May 31, 2022

financial advisor discusses finances with couple165061084For many of us, in our daily lives, there are myriad circumstances under which we’ve been told that money conversations are inappropriate. Because we avoid money discussions in so many spaces, and because finances and how we manage money may be reminders of other life circumstances and situations, talking about money is difficult. Still, as a financial advisor, it’s your job and for your clients, having a realistic understanding of their current financial situation and how it may impact future plans and goals, difficult conversations are necessary; they’re not just necessary, they’re unavoidable.

Given that we have to have these conversations, understanding and having some tips, techniques, and strategies at your disposal becomes crucial, though those aren’t often the skills taught in certification courses. Instead, these are the skills we often build throughout our careers, we learn from mentors, and we learn from using additional resources.

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Key Financial Advisor Roles

Financial advisors play a variety of roles for their clients. While some of these are based on the type of advisor they are, some of the roles they play cross the entire spectrum of possible financial advisor positions. Some roles are held to higher ethical standards and while that may impact the conversations you have, you’ll still need to be able to put on a variety of “hats” as you serve your clients.

Broker-dealers and brokers sell stocks, bonds, and mutual funds. Unlike financial advisors who must adhere to fiduciary standards, the same is not true of brokers. While financial advisors seek the best money moves for their client’s needs, brokers are more concerned with sale eligibility and may choose what is better for the brokerage than for the client.

Investment Advisor is a legal term based on the requirement that they register with the SEC to buy and sell securities. Investment advisors primarily provide advice, but if they are registered with FINRA, they may also buy and sell securities as well.

Certified Financial Planners (CFP) are financial advisors with a certification from the CFP board. They must adhere to fiduciary standards and are held to a fairly high ethical standard regarding the advice they provide to clients.

Chartered Financial Consultants (ChFC) have undergone training similar to that of CFPs. ChFC’s are also held to the fiduciary standards and must follow The American College’s code of ethics.

Portfolio, Investment, or Asset Managers deal with investment portfolios. They may offer other financial services as well depending upon certifications and training.

Wealth managers or advisors provide investment and portfolio management as well as financial planning though their clients often possess investments or portfolios with a minimum of one million dollars.

Financial Advisor is, essentially, an umbrella term. They may offer planning advice and investment strategies, but also recommend specific products and or securities to invest in based on a client’s goals and needs. 


With so many varied titles, one might expect that the roles would be different, and as noted above, they are. Still, there is considerable crossover when it comes to the tasks and types of advice and support given to clients. Often these individuals often assess their clients current financial standing and with the aim of preparing them for the future or helping them achieve financial goals will provide: 

  • Financial advice such as spending, saving, and budgeting
  • Financial plans including retirement and investments
  • Tax, estate, or investment advice

Top Characteristics People Seek in a Financial Advisor

Because most people prefer to keep their financial situation private, they often seek out some very specific characteristics in a financial advisor and those are, often, related to the nature of the conversations they’ll have as well as the advice they’re seeking.  In addition to someone with considerable financial knowledge, people seek financial advisors who are:

  • Responsive
  • Trustworthy
  • Proactive
  • Good listeners
  • Honest
  • Knowledgeable
  • Probing and inquisitive

Many of these characteristics have to do with communication and relationship building skills which are not acquired via certification courses, so seeking resources and ways to build those skills is vital for advisors, regardless of their role.

Couple looks over finances 273851976Why Having Difficult Money Conversations is Essential for Financial Advisors

First and foremost, to provide a comprehensive and realistic financial plan, whether it’s savings or investments, advisors need to know their client’s financial standings. At times, this may involve past financial decisions as well as spending patterns and existing debt. For some folks these are difficult topics as they harken back to difficult times or situations. Still, having a clear understanding of a client’s financial situation is vital.

Additionally, financial advisors need to know what and where client weaknesses may be when it comes to financial planning or spending. It may help determine whether a client needs help with budgeting and how money should be invested or what needs to be kept liquid to be accessible for emergencies or planned spending in the future as this can help avoid taxes like capital gains.

Finally, advisors need to know where their clients are headed, or what their goals are. Understanding where they have been and where they are can help an advisor create realistic and attainable financial goals for their clients and this means, sometimes, having difficult money conversations. That’s where the characteristics noted above become essential. Advisors must be able to balance being inquisitive with being sensitive to topics that may trigger discomfort or reluctance in their clients.

Financial advisor talks with clients124997926Top Strategies for Financial Advisors and Difficult Money Conversations

While many of us struggle to have difficult conversations in our own lives, having them with our clients is a job function and required to help us provide the best advice and financial plan possible. Therefore, equipping yourself with the strategies that will facilitate these conversations is also essential.

1. Build relationships and trust

You may be wondering how one builds trust without first performing tasks and providing services to your clients, but much of your early interactions with them can help establish trust. That means being responsive to communication efforts, doing more listening than talking, especially early on and in initial conversations or meetings. Your goal is to understand their needs, wants, and their challenges. Asking questions, tactfully, and allowing your clients to answer fully, without interruption, is a great way to start. Practice building your listening skills in every area of your life and it will translate to your client relationships as well.

2. Be a clear and proactive communicator

While part of this falls under your efforts to build and nurture relationships, checking in frequently without clients as well as personalizing those efforts will go a long way. Further, checking in before they need you suggests you’re attuned to their needs. Clients are far more likely to open up and be honest with an advisor who is, and appears, invested in them. While this can be time consuming, there are also technology tools you can adopt and implement to assist with these efforts.

Part of being proactive means sharing news, updates, and educational content that may be of interest to your clients. For example, if you recently had a client who inquired about moderate risk mutual funds and a new fund that fits that bill is gaining momentum, you may want to proactively share that information with your client. Similarly, you may have a great resource you can send them, such as a white paper, that discusses the difference between risk levels and their role in investment strategies. This kind of information and communication facilitates open and active dialogue between you and your clients.

3. Ask tactful, non-weighted, non-leading questions

Follow-up questions will be necessary and one of the biggest pitfalls of asking follow-up questions or even baseline questions is asking them in a way that suggests a negative connotation or leads your client towards an answer.

For example, consider “What are your thoughts about your spending?” rather than “Do you think you spend too much?” If your client is already sensitive to negative spending patterns, then a question like the latter is more likely to make them defensive and shut down potential communication. Further, the second question is far more likely to elicit a negative response as the phrasing itself suggests that they spend too much. While they might, in your opinion, the real question, when it comes to their finances, is up to them. 

4. Learn to control your reactions

For many financial advisors, this is among the most difficult skills to master. We all have microexpressions that may reveal to a client our thoughts or opinions about their financial status that may impede our ability to have open and honest conversations. This is particularly true when having difficult conversations and presenting financial news that a client may not want to hear.

In addition to controlling your reactions, you’ll also need to remember that you can control and guide your meetings. If you sense a client is too upset to continue a conversation is a meaningful way, you can and should suggest the conversation be picked up at a later time, after the client has had time to think and consider the situation.

5. Create structure and initiate the conversation

Every client, especially depending on their age, will have different needs and wants for their interactions with you. For example, older generations may want more face-to-face meetings while millennials prefer digital connections. Still, being clear about the purpose of a meeting and creating an informal agenda may be helpful, especially if the topic will be difficult. 

One tactic you can use to help facilitate these conversations is to initiate them in a non-confrontational way that opens up space for them to postpone it until they are prepared or have had time to think about the topic themselves. This means asking questions like “Are you ready to talk about spending/saving/investing/retirement during our next meeting?” This not only creates structure for the meeting itself, but it allows your client to create space and have time to mull over what may be a difficult conversation for them.

6. Just do it

These conversations are unavoidable in our field. Putting them off, feeding into their taboo, or waiting for a client to initiate them may create more complicated situations and may impact your overall advice and your client’s financial future. In fact, these conversations will get easier and you will get better at them the more you do it.

The more prepared for these conversations you are, the more at ease your clients will feel. The more comfortable you are, the easier these conversations will get. They may never be easy, but they can be less difficult.

Difficult conversations are part of our job and sometimes those difficult conversations have to do with our own career paths. Seeking out an ear to have those conversations doesn’t have to be difficult. The FA Match team is here to help and listen, especially if you’re seeking what opportunities may be on the horizon. Get in touch with our team today and let’s talk!
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