What to Do When Your Financial Planning Clients Get Advice From Someone Else

People seem to love giving others unsolicited financial advice. And that means you’ll probably have to deal with financial planning clients who come to you with ideas based on what they heard from someone else.

Whether clients get advice from a parent, friend, or financial personality, it can be a challenge to figure out how to respond — especially if that advice runs counter to the direction you think your client should go.

In most cases, you can’t just dismiss those new ideas out of hand. You don’t want to offend your client by implying that their family member or friend is unreliable. But you also can’t just sign off on whatever new direction your client wants to go.

What’s the solution? You need to approach your client with patience and open communication. But first, it’s crucial to understand all the potential problems with unsolicited advice so you can gently help a client see that it’s not necessarily the best resource.

The Problems With Unsolicited Financial Advice

There’s a strange dichotomy in American culture. On the one hand, many people are completely uncomfortable talking about their own money. It’s taboo to discuss your salary, spending decisions, or charitable contributions. On the other hand, people love giving and receiving financial advice.

There are countless blogs, magazines, books, and podcasts out there offering one-size-fits-all advice. Popular personalities have made a fortune off giving general financial advice. And most of us have at least one parent or family member who is always ready to offer a suggestion about what you should do with your money.

 

Even if this advice is coming from a place of good intentions, it’s not usually very helpful. And it can affect clients in many negative ways.

Problem #1: Lack of direction and consistency

There are countless ways to approach personal finance decisions. So even if you’ve helped a client design a comprehensive financial plan, they may show up to a meeting ready to toss it out and go in a different direction.

This is hard because financial plans only work as intended when clients follow them consistently. If your client changes their plan every few months, they never have a chance to make progress.

Plus, frequent changes can breed confusion and anxiety. If a client feels like they have to change their plan every time they hear a new idea from someone, that’s a recipe for worry and stress.

Problem #2: Decision fatigue

A similar issue happens when clients get conflicting advice from several different sources and then have no idea which option to choose. Decision fatigue is stressful, and it can make it harder for clients to move forward in any direction — even the one you suggest.

Problem #3: Lack of trust

Finally, clients who get advice from many other sources may start to distrust you. This is especially common if they are getting tips from a close friend or family member. They might start to wonder if they can really trust you (a comparative stranger) over their parent, sibling, or best friend.

The Solution to Unsolicited Financial Advice

As you can see, when a client gets advice elsewhere, it can cause some challenges. How should you react when they come to a meeting wanting to change their plan because of what someone else said?

There’s a right and a wrong way to disagree with a client. The wrong approach is to dismiss the advice out of hand or imply that whoever they got it from is an unreliable source of advice. (That might be true, but you can’t say it.) 

Instead, take the time to listen to your client. Let them get their thoughts out in the open. Once they do, it’s easier to start discussing them in good faith. You’ll build your client’s trust and remind them that you’re a safe person who truly wants what’s best for them.

Then, try to look for the underlying source of their concerns or fears. For example, do they want to follow their grandpa’s advice to buy gold because they’re worried about the market? 

That’s a legitimate concern and one you can discuss with them. If they’re feeling anxious about the investment plan they have, maybe you can adjust it slightly to include more low-risk options.

Finally, you can go ahead and make some projections to show the client what might happen if they go with their new idea. Show them how it would impact the plans they already have in place and the potential good and bad consequences. Remind them that changing a financial plan often delays progress, so it might be even longer before they see results.

In many cases, just having an open conversation can help calm your client’s fears and remind them that staying with the original plan is the best option. But even if they do decide to go a different route, you’ll have proven they can trust you. And you’ll probably have the chance to help them get the best results from this new direction.

Patient Communication is Always the Answer

What’s the best way to respond to a client who wants to change their financial plan because of something a parent or friend said? How should you react when a client disagrees with you because your advice conflicts with whatever they heard in a podcast last week?

It’s a frustrating situation, but the first step is to stay calm. In most cases, clients aren’t trying to hurt you — they’re just trying to figure out how to make sense of all the information coming their way. 

Be patient, and encourage them to talk about these things. An open conversation gives you the chance to gently remind them of their original goals and reiterate how the plans you made together support those goals.

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