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Financial advisors typically focus on hard numbers and cold facts in creating investment portfolios, but being able to help clients through hardships, such as the death of a spouse or other family members, is an equally important skill.

In a similar manner, advisors must be prepared to deal with their own emotional well-being when a client dies or faces other hardships.

Baby boomers, who typically represent a large portion of financial advice clients, are now reaching their elderly years, which means advisors are likely to experience the death of clients or have clients who lose family members. That makes it increasingly important for advisors to be able to deal with clients who are grieving.

Amy Florian is the CEO of Corgenius, which uses neuroscience and psychology to train financial professionals in how to help clients who are experiencing loss or other difficult life transactions. In a Wealth Management column, she identifies common mistakes that advisors may make when trying to help individuals deal with grieving.

Telling a client that a lost loved one is “in a better place” should be avoided because it assumes that the client believes in an afterlife and it can overlook the pain that a client is experiencing. If clients mention that they believe their lost loved one is in a better place, advisors can elaborate on the thought. They can say it’s comforting to know that the person may be better off, but they should also mention that the person will be missed.

Advisors should also avoid comments such as “At least the person is no longer suffering,” because such a comment doesn’t acknowledge that the surviving family member is experiencing emotional pain. Advisors should instead assure clients or family members that they will work hard to help memorialize the deceased and they can ask clients to share favorable memories of lost family members.

A blog by the Ashar Group, which is an advisory firm that works with the secondary market for life insurance and life settlements, echoes Florian’s advice to ask grieving clients to share happy memories about lost spouses or family members. The blog also urges advisors to listen attentively to clients, which can involve asking sensitive, open-ended questions and also careful assessing when a client is ready to start talking about finances.

Advisors should also realize that grief can occur from a variety of developments, such as losing a job, retiring, or getting divorced.

The emotional duress of grieving can make it difficult for clients to conduct administrative functions, such as obtaining death certificates or cancelling a driver’s licenses, so advisors should have a checklist to guide clients through the process. The Aurochs Financial Group, for example, provides a checklist under its webpage “Support is Just a Phone Call Away.”

The checklist has eight broad categories of functions and each category has numerous tasks, including managing online accounts, notifying financial institutions, and obtaining documents such as letters of administration and death certificates. The checklist also recommends that grieving individuals reach out to friends, relatives, and professionals, including financial advisors, for help with administrative functions and for emotional support.

Financial advisors should also recommend that grieving clients wait at least six months before making major financial decisions, reports The Phoenix Business Journal.

The theory is that the emotional state of grieving individuals may lead to poor decisions.

Advisors should also ensure that they, themselves, are prepared to deal with the loss of a client, reports Financial Planning. Advisors should consider attending clients’ funerals, in part to further develop relationships with family members but also to reflect on the deceased person’s life.

Last modified on Sunday, 02 September 2018
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