Retirement Conversations with Clients: How to Facilitate Open Discussion

Posted by Kol Birke, CFP

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April 16, 2014 at 1:30 PM

Retirement Conversations with ClientsRetirement conversations with clients can be challenging. It's an overwhelming topic that stirs up emotions and, often, fears. Before you can understand your clients' specific circumstances and dreams—and make decisions about their retirement planning—they must feel comfortable to speak honestly and openly.

As the book Crucial Conversations asserts, "When it's safe, you can say anything." Creating a secure environment should be your first priority for all client conversations. This is the foundation for discussing their ideal retirement—and making the financial decisions to help turn their dream into reality.

Here are a few key strategies for creating safe—and honest—retirement conversations:

Take Their Emotional Temperature

When beginning the conversation, ask your clients to rank—on a scale from one to ten—how comfortable they are talking about retirement with you (or with anyone). Check in before you launch to demonstrate that you're not going to move more quickly than your clients are comfortable with.

If a client tells you he or she is at a comfort level of two, for example, at least this client trusts you enough to be honest with you. When you proceed, you can tailor the discussion to make this client more comfortable.

Be Open-Minded and Curious

Most advisors naturally want to avoid appearing as if they don't understand. But if you make assumptions about how the client feels, instead of asking questions, problems can quickly arise.

In the previous example, the advisor could have asked, "Is two high or low?" This may seem obvious, or even sound absurd, but the client's answer might surprise you. He or she may actually respond, "Two is low . . . but I probably should have told you an even lower number. I'm pretty terrified when it comes to retirement." Given this response, the advisor can frame upcoming conversations in a manner that increases the client's confidence in exploring the topic.

Go Slowly and Remain Calm

It's human nature to operate either at 90 miles per hour or zero when agitated. Both of these reactions can escalate a situation, preventing effective financial planning. Keep this in mind during all retirement conversations with clients and pay attention to how they express themselves. Are they speaking more loudly, quietly, or angrily than usual? If so, help make them more comfortable by speaking softly and slowly.

Stop Before You Go

In psychology, the time it takes someone to calm down after being agitated is termed the "refractory period." During this time, people aren't able to listen or speak logically and effectively. The best cure is a short break. Resume the conversation another day or after a coffee break.

If your clients won't pause, fill this time with calming education; do not run full speed into new, emotionally loaded information. Assure them that these conversations are difficult for everyone considering retirement. You may gently say, "Transitions are rough, huh? Did you know that 41 percent of people find retirement to be their hardest life transition?" Your support—and recognition of their situation—will help move the conversation forward more effectively.

Considering emotional comfort during retirement conversations with clients will help ensure that they're open and honest with you—and that the conversation continues to be effective. In turn, you and your clients can plan more intelligently for their golden years.

How do you facilitate retirement conversations so your clients feel comfortable? Share your successes and failures by commenting below.

Envisioning Your Ideal Retirement

Topics: Retirement Income Planning, Behavioral Finance

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