Why it pays to ask the tricky questions

Most advisors haven’t been trained in psychology, counselling, or medicine. But in many instances, we find ourselves broaching on topics that require a little bit of knowledge in these areas. Why?

Because your clients’ ability to implement your advice is strongly linked to their mental and physical health, and their life circumstances.

The client going through a divorce probably isn’t in the best headspace to launch an aggressive expansion strategy for their business. The young client who is overweight and smokes might need to hear a tough set of truths when it comes to their future insurance options.

For this reason, we are often required to look beyond our clients as a collection of credits, stock options, properties, and insurance policies, and see their bigger picture. Below are three considerations beyond finances that can impact the effectiveness of our advice.


1) Mental health

The mental health of your clients largely determines not only whether they will follow through on your recommendations, but it should actually factor into what those recommendations should be in the first place.

Go back to the example of the divorcing client. We had a client who was going through a messy divorce at the same time as attempting to set up a business. Battling feelings of grief and loss, she was ready to give up on the business when we had only just begun speaking about launching into an aggressive growth strategy. Once she’d confessed to her emotional struggles, we knew our approach was no longer appropriate.

We instead focused on simply ensuring she didn’t lose any clients in the short term while she emotionally recovered. Fast forward two years, and she’s now firing on all cylinders with our original growth strategy. But we wouldn’t have been able to implement this today if we’d attempted it two years ago, and potentially triggered a nervous breakdown!


2) Physical health

Our clients’ physical health affects so much of our advice, and an obvious area this affectes is insurance options.

One client continuously shied away from exploring health insurance options, despite being the primary breadwinner for her family requiring income protection. A bit of sensitive prying later, and we discovered that she believed her higher BMI would disqualify her for any coverage. She didn’t want to face any uncomfortable questions about her weight, or go through the humiliation of rejection.

This quickly made us aware that the best option for her was to undergo a (slightly) less painful pre-assessment test, to test whether she qualifies. She uncovered that she actually could get income protection after all, albeit at a slight premium. Which was extremely lucky as she needed to make a claim just 6 months later!

The process took a great deal of sensitivity and discretion, but was absolutely vital to safeguarding our client’s wealth.


3) Lifestyle, events, and life stage

Most advisers are very aware of the impact of life stage. Younger clients are building wealth, older clients are protecting it, etcetera.

But there can often be quite a divergence when it comes to lifestyle factors within each age category. One of our clients is a 65-year-old who spends his weekends canyoning and cave diving. He leaves our younger clients in his wake when it comes to risk-taking levels of activity! So, we have a serious set up of “extreme sport” insurance cover for him, that will ensure he’s taken care of in the case of a (very possible!) accident. Yikes.

This is of course not hugely typical of this age category, so it definitely pays to ask a few questions about what your clients get up to on the weekend.

You might find it changes your entire approach.

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Katrina Haskew is Managing Director of Leading Advice.