Advisory Expertise: When Troubled Clients Need Help

Advisory Expertise: When Troubled Clients Need Help

Financial advisors – the best ones, anyway – get to know their clients intimately.

Professional relationships can last for decades and the events of a lifetime shape the course of seemingly dispassionate business dealings. The advisory life is far from simple number crunching: to really succeed, you’ll need the human touch and a readiness to face the inevitable trials of life.

Careers are launched, children born, first investments accomplished, a mortgage secured. As the client’s life progresses, more assets are acquired, a retirement plan formulated and an estate plan forged. The intimate matters of a family’s life are laid out before the advisor: difficulties funding a child’s education or meeting the healthcare needs of parents; tussles over family affairs; fissures in a marriage.

Life’s vagaries often leave clients perplexed, confused or even paralyzed: even the toughest customers can be overwhelmed by the incessant struggle, random disasters, uncontrollable events and elemental struggles that pattern our lives. Under sufficient strain, even Gibraltar’s facade will show signs of cracking.

At some point in your career, you’ll likely be confronted by a client who needs help beyond what you can provide: the care and counseling of a mental health professional. The matter falls squarely within our fiduciary brief, as the financial health of the client’s entire family may rest squarely on what we do or choose to ignore.

Clients certainly reveal a range of emotions, most of which require no urgent response. Simple sadness at business woes, poorly performing investments, troublesome children or mildly ill health should warrant little concern. An open ear is likely all the client needs in these cases.

How do we know when a client has crossed the boundary? Signs of severe alcohol or substance abuse may be evident and should not be ignored. Extreme depression, in particular even passing remarks about suicide or other violent acts, must be addressed with alacrity. But how should we proceed?

If you’re familiar with family members – and it’s sound business practice to include spouses and older children in the financial planning process – you may be positioned to approach a related adult with your concerns. This is a sensitive matter, as it could be perceived as maneuvering behind the client’s back. This approach should only be taken if no other course seems viable.

Speaking directly to the client, if feasible, is the preferred course of action, but proceed with care. Indelicate remarks will inevitably be taken badly, particularly if your client is anguished or depressed. When making a referral to a mental health professional, you’ll be revealing that you’ve discussed the client’s case with an outside party. While anonymity is fundamental in all third-party contacts, your client may not be in a mood to listen and you may be faced with a strongly negative reaction.

Whatever the risks, the ostrich approach is unacceptable and you’ll need to take steps. Many firms have policies in place to deal with common stressful client situations, like divorce, a career setback, or an untimely death in the family, among other common life shocks. These procedures may form a starting point for action. If no guidance is in place, you’ll need to map out your own. Speak to experienced team members, particularly senior staff, to glean any insights. Whatever you learn, it’s your responsibility to walk point on the mission and strive for a successful outcome.

In the end, if a client urgently requires your help, you’ll need to gather the inner strength to act. You don’t need to solve the problem yourself, but don’t wait too long to throw out a lifeline. A life may be at stake.

For more information, please read:
When A Client’s Financial Problems Are Beyond Financial Advice: How (And When) To Refer Clients To A Mental Health Professional | Kitces

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