During the course of your career as a financial advisor, you'll likely celebrate the high points in people's life as well as the low points. Grief is a natural part of life. As you build relationships and trust with your clients, you gain the responsibility to be there for them as they experience grief.
It is estimated that over 80% of widows make a financial advisor change after their spouse passes away. As your clients go through the unfortunate major change in their life, there are several things you can do to alleviate some worry and provide emotional support.
- As a financial advisor, you will find that you build quite meaningful relationships with your clients as you handle their household finances and get to know their families.
- When clients pass away, often their widow/widower will change financial advisors in order to create a clean slate and move on.
- Financial advisors can use their position to help grieving families and through doing so may also be able to preserve clients even after one of them has passed.
- It is appropriate for financial advisors to attend funerals for their clients or their client's family members as long as they feel comfortable doing so and they were close enough to the deceased.
- It is also appropriate to recommend grief counselors, books, or other resources - though make sure your recommendations are authentic and genuine.
Grieving Clients: What to Do?
As fiduciaries, it's our job to not just care for our clients' financial interests; we also need to care for them as people. Someone experiencing grief needs to be mentored in a certain way to ensure they are able to move past their sadness and to also prevent any grief-induced decisions that could negatively affect their financial future.
Douglas Boneparthe, a financial advisor at Bone Fide Wealth in New York City, says "people grieve in different ways, and sometimes a loss can lead you make financial decisions that are driven by emotion. When a loved one passes away unexpectedly, it can be like a wake-up call shouting 'life is too short.' You might feel compelled to splurge and seize the day. Although it's understandable, before diving headfirst into spontaneous spending, it's wise to consult your financial advisor."
Nina O'Neill, partner at AIM Advisors in Raleigh, NC, agrees, "When clients are dealing with grief, whether it's from a death or a divorce, talking about it can be pretty painful and healing can take a while. That's why we keep a box of tissues in our conference room. What we need to do is take a close look at their finances and see how these life changes affect them. We need to make sure they don't make any impulsive, big decisions like using life insurance money to pay off a house when there are other priorities that need to be addressed. Our main goal is to help them focus and find their way to a smart and practical financial plan."
When working with clients dealing with grief, advisors must rely on their soft skills. It doesn't work to talk logic to a grieving widow who doesn't want to part with her deceased husband's company stock because it feels like a betrayal to her. You need to be able to understand what she might be going through and gently guide her to the right financial path. Here are five tips useful for mentoring clients who have experienced the loss of a spouse (whether through death or divorce) or another loved one.
Use Your Powers of Empathy
Though you may not have been through the same difficult circumstances your client is experiencing, you can still empathize with them. Pull from your experiences with grief and try to put yourself in your client's shoes. In some situations, your clients may appreciate hearing from your own experiences and learning how you were able to overcome similar circumstances.
Are their judgment skills impaired at this time? Is it difficult for them to make decisions? Do they need some time before they can even think about their finances? You may know that it's in your client's best interest to make some immediate financial changes, but that doesn't mean it's the best move at this point.
During difficult times like this, financial strategy takes a backseat to empathic correspondence. When your client is ready to make changes, they'll make them - and until they are able to do so, it's up to you to be there understanding what they are going through.
Go to Them
When a person experiences grief, it can sometimes be difficult for them to get themselves together enough to leave the house. They may be afraid they will break down in public or simply want to stay home among their deceased one's possessions.
It can be very helpful to visit a grieving client in their home instead of requiring them to come to your office or meet you in a public place. You can even bring them lunch or some homemade cookies when you visit to further show you care. Even if you don't have any financial business to talk about, you can still visit your client to ensure they are doing okay, especially if their grieving period seems prolonged or especially intense.
Be prepared to be the one reaching out to your client, since your client may not even think to speak to a financial advisor at such a time - it is likely up to you to foster and carry the relationship.
J. Sadler Hayes, principal at Sadler Hayes Associates in Clarkstown, NY, says, "when a client passes away, I let the family know I am there to help get paperwork together to do things like file insurance claims as well as to refer to other professionals if needed. I also understand that this is a time of sorrow and uncertainty, so I try to be compassionate and respectful of their wishes and needs."
If you have been advising your client for years and especially if you were close to the deceased spouse, it's usually appropriate (and advisable) to go to the funeral. You can offer support to your client as well as show that you are more than just an advisor, you're also a friend. Though funerals are no fun for anyone to attend, you will find that your client will greatly appreciate the gesture.
When attending the funeral of a client or client's relative, socialize with other companions attending the service but be cautious on appearing to capitalize on the opportunity to land new clients. If you don't feel comfortable introducing yourself as the individual's financial advisor, refer to yourself as a family friend.
Refer to Grief Counselors
Some people will be able to move through the stages of grief on their own and with the help of a strong support network. Others, however, may need a little help. If you have a client who seems to be struggling, you can refer them to a grief counselor you trust to provide further guidance. Make sure the counselor you refer is someone you personally know or have worked with before to ensure they are a good fit for your client.
Recommend a Book or Other Resources
You should be a resource for your client in a broad range of areas that are not limited to the financial industry. If you notice that your client is having trouble coping, you can recommend a good book such as Grieving: A Beginner's Guide. This, paired with the further referral to a grief counselor if appropriate, shows that you understand what they're going through and are there to help in any way you can.
If you work in a larger firm, solicit ideas from other members in the office. Chances are others in your firm have gone through the same situations with some of their clients. This may especially be true if certain advisors specialize in working with older, senior clients. Be prepared to vet any recommendation that comes your way, though your client may simply appreciate the gesture of you sending additional resources.
Should Financial Advisors Attend a Client's Funeral?
If the financial advisor was close to their client, it is appropriate to attend the client's funeral. Do not assume you will receive an invitation, and be prepared to attend strictly to support the family of the deceased as opposed to network.
How Can Financial Advisors Help Grieving Clients?
Financial advisors specialize in dealing with numbers and investments, but times like these call for empathy. Unless there are immediate and urgent financial matters, be prepared to support your client through non-financial measures like bringing them warm dinner, recommending them grief materials, and being there however they need.
What Should Financial Advisors Do If a Client Passes Away?
In the short term, financial advisors should get in contact with (or be prepared to be contacted by) the executor of the deceased's estate. The executor is in charge of executing the liquidation and distribution of estate assets in accordance of the deceased's will. When dealing with the executor or other family members, prioritize empathy and be understanding with delays.
The Bottom Line
Whether you are working with a brand new client who is going through the grieving process or are helping a client you've worked with for years navigate grief's journey, these five tips should help you along the way.