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Honest Dialogue With Clients: How One Advisor Helps Them Come Clean

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Sometimes developing a financial plan is a breeze, fostered by effective communication. But too often, there are hidden agendas, embarrassing financial decisions, or marital difficulties at play that can harm a plan.

In my medical career, I learned how to handle tough topics through a psychiatric tool called the BATHE method of communication. I quickly learned the value of this communication method in financial planning. By incorporating this technique into client conversations, I can get to the crux of underlying issues that may affect a financial plan.

Here’s how it works:

B: Background

Start with an open ended question, such as “What is going on in your life?” or “What would you like to talk about?” This sets the context of the conversation, and allows your client to share what is on her mind. Be careful not to interrupt.

A client we began working with early this year at my firm called recently to check in. I asked, “Is there anything else going on you would like to talk about?” He said, “My wife let me buy a boat. The loan is $83,000 and we’ll need to buy a new car soon.” Although they had great paying jobs, they had a lot of debt from two home purchases and hired us to create a plan for paying down debt and boost saving. Something was up.

Not expecting the call, I had to refresh my memory on plan specifics, which was a great excuse to buy time to wrap my head around the situation. I asked him to send me the loan information and their thoughts on the planned new car purchase. On review, the boat purchase was supposed to be a few years off for $50,000. Yikes.

A: Affect

Ask, “How do you feel about that?” Labelling a feeling is therapeutic, and allows you and a client to validate an emotional response in regards to a problem. 

For the client with the new boat, I didn’t have to go too far with that question. About two minutes after the first call, the client called back. His wife grabbed the phone and said, “I’m making him call you because he purchased the boat without telling you. We are now in the car going to look at a new truck for him that costs $55,000. I’m mad because I don’t want to work the rest of my life paying for his toys.” In this relationship, the wife earns the big bucks and the husband makes about a third of her income. They also have two young children they want to send to private school.

T: Trouble

Asking, “What troubles you the most about this?” reveals the symbolic meaning of the situation. With this couple, the wife said, “If this doesn’t get under control, we may end up divorced.” She was serious and her husband was not taking her seriously as they drove to the car lot. 

H: Handling

“How are you handling that?” assesses the client’s resources and response to a situation. In this discussion, the wife was looking for resources for counseling, and wanted a new plan that addressed her husband’s spending. She was at her wit’s end; the plan we had just created for them a couple of months prior didn’t match his behavior. Upon reflection, we should have done a better job elucidating the distinct differences in how they each approached spending. The husband will need to explore the underlying issues driving his need to spend.

E: Empathy

One of my colleagues picked up my standard empathic line, “I hate that for you.” With that phrase, I share my acknowledgement of their pain without making the problem my own. Showing empathy without owning the problem lets the client know I can handle hearing about the problem without it being a burden to me. This invites further sharing and gives the client confidence to explore solutions with me. Another good phrase is, “That must be very difficult for you.” 

With the clients in my example, I discussed how spending issues are a profound origination point for marital difficulty, and that they were not alone. I reassured them we will provide help on the financial side and refer them to a counselor to discuss the differences in their approach to money. They agreed to not buy a new vehicle until they get a better handle on their differences.

Financial planners play a vital role in helping people through difficult chapters in life. Better communication is essential if we hope to do this well. It’s a mistake to think that only psychiatrists can have conversations about difficult subjects. By applying the BATHE method in our daily planning practices, it can greatly improve the value your clients receive.

Carolyn McClanahan, a CFP and M.D., is director of financial planning at Life Planning Partners in Jacksonville, Fla.

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