10 Ways to Help Clients Cope With Death

Being able to use small statements of encouragement can help a client talk about the issues and be able to then have them express themselves, she noted. “Even just being able to repeat back the last three or four words with a different inflection can help them talk more.”

Two things it’s best not to say at this time: Jump in with a story of an experience that you had as the advisor or offer ways to fix the problem, she said.

Clients may “really get stuck on an emotion, maybe when they want to sell the house, not only for financial reasons, but because that’s where their loved one died, but their emotions are keeping them from looking at it objectively,” she said. “You can kind of explore that emotion with them.”

7. Try role-playing, especially with less-experienced advisors.

“We found that only 8% of advisors are extremely comfortable discussing the most difficult topics” with clients, Grabenstetter said. “Those 8% were the most comfortable because they had over 25 years of experience.”

“The one way to fast-track younger or more inexperienced advisors to feel more comfortable discussing these uncomfortable topics is … through role-playing,” she said. “Acting out what the conversation may be like” with a client in advance “can be helpful to practice different communication techniques, especially around finances and life events.”

8. Motivate clients to act.

“Now that you’re starting to have those [important] conversations, it’s important that there’s also some follow-through to make sure the clients actually do the things that they need to do,” Buhrmann said.

“One area that we need to be aware of from a behavioral aspect is this idea of framing bias,” he added. “Individuals can respond differently depending on how the concept or decision point is framed.”

“So for example, if I say to a client that if their estate goes through probate, it might cost their heirs up to 10% of the estate value, that may not trigger a lot of a response.”

However, he said: “If I frame that by saying, ‘Hey, Mr. and Mrs. Client, in your case, 10% of a half-million-dollar estate translates to added expenses of half a million dollars that we could easily avoid with a little bit of planning.’ Now that may resonate better with the client and actually trigger a response and get them to engage.”

People are also “pre-wired to avoid loss, meaning I might respond less to a half-million-dollar gain and more to a half-million-dollar loss,” he added. “As advisors, we need to be aware of some of these behavioral biases to help our clients make better choices.”

9. Don’t overwhelm clients with too many choices.

When it comes to behavioral finance, there’s “also something called the paradox of choice, and it may be a phrase that you’re not familiar with, but chances are we’ve all experienced it,” Buhrmann said.

Pointing to the classic example of walking into a Baskin-Robbins ice cream shop with 31 different flavors, he said: “There’s just too many options to choose from. So what do you choose? You choose vanilla. Really? Thirty-one different flavors and I choose vanilla?”

He noted that “for many years, financial plans have been measured by the thickness of the binder or the sheer number and breadth of the findings and recommendations. Surely a plan with 27 recommendations is three times as good” as one with only nine recommendations, right?

In short, no. A client may be given 27 things to do and is paralyzed to start doing any of them because there are so many, and he or she doesn’t know where to start, he noted.

An advisor can give a client 27 things to do, he said. Just don’t give them everything at once, he noted, explaining: “We could give them three to do. Do those and we’ll give them three more. You know, similar to the snowball versus avalanche method of paying down debt.

“We could also give them some easier ones to do first so that they’re feeling a sense of accomplishment,” he said, adding the advisor can prioritize the actions, too.

10. Educate clients and dispel myths they may believe.

“Part of our job as a financial planner should be to inform and educate our clients and to break up any … myths in order to help keep [their] emotions in check,” Buhrmann said.

“In no other area of financial planning is there more emotion than when it comes to the topic of life insurance as part of your estate planning,” he noted. “Recognize that emotions can really impact that final decision making, making quick assessments versus cooler head analysis.”

He pointed to data showing eight in every 10 Americans overestimate the cost of life insurance, with most pegging it at three times the actual cost.

In reality, he explained: “The cost of life insurance depends on a lot of factors like your age, your gender, your health, your lifestyle, hobbies, the type of coverage, the amount and the term. Bottom line, though, is that our emotions and anchoring bias aren’t helping us with this decision.”