My investment and life philosophy frequently includes the word “ought.” One editor suggested that my writing has a great deal of “Dutch Uncle” in it. I had not heard the phrase before, so I looked in up in Wikipedia:
Dutch uncle is a term for a person who issues frank, harsh, and severe comments and criticism to educate, encourage, or admonish someone. Thus, a “Dutch uncle” is a person who is rather the reverse of what is normally thought of as avuncular or uncle-like (which would be indulgent and permissive).
One of the reasons to engage a coach, mentor or advisor is to help you reach your goals. Sometimes an advisor is helpful because we need their expertise. But sometimes we need their help holding us accountable and overcoming our natural resistance and inertia.
Wealth managers realize that small changes in our behavior over long periods of time results in large changes in outcome. But they also realize that even small changes in behavior require herculean efforts to put and keep in place. We are, by nature, change resistant. Psychologists suggest that even the smallest of changes requires 28 days of consciously and deliberately focusing on the change we want to make.
If we don’t want to make the change, outside advice will be met with resistance. This is as true in wealth management as it is in substance abuse. It was interesting, therefore, to read Brad Klontz’s article “Countering Resistance” in Financial Planning magazine. In his summary he wrote:
Client resistance is an inevitable part of the financial planning process. It’s a sign you are doing your job. It’s also a signal that a client is not ready to take action-and an opportunity for you to change tactics.
Klontz suggests that financial planning client resistance is akin to counselors treating substance abuse. He writes:
In studies on treating substance abuse, relapse rates could be predicted by one characteristic of counseling sessions-the number of confrontational statements made by a counselor during a session, such as, “You said you were going to interview for that job, but you didn’t. How come?” The more a counselor attacked a client’s resistance to change, the more likely and the more severe a client’s relapse.
Planners usually respond to resistance in the same way as most helpers: They do more of the same, or turn up the heat, presenting more facts and figures or warnings. But when a client is ambivalent and you stake your claim on one side of the argument, it may be natural for a client to think about all the opposing arguments.
The key to helping clients change is getting them to talk about the benefits of change. As a financial advisor, your job is to give advice. When clients resist, it’s your turn to change.
A financial advisor’s job is to help clients meet their goals. And that requires helping clients adjust their actions with the small changes necessary to achieve them.
I’ve summarized the methods that Klontz suggests using to overcome resistance to change:
1. Simple reflection. Reflect what the client is saying back to them. Perhaps when you say it they will recognize it is inconsistance with their goals.
2. Exaggerated reflection. If you amplify their statements supporting non-action, perhaps they will correct you and suggest action.
3. Double-sided reflection. Reflect both sides of the the client’s ambivalence. Let the client decide which side is more important to their goals.
4. Arguing against change. Offer reasons why the client shouldn’t change. Let the client sell the change if it is important enough to them.
Change is never easy. But a coach, mentor or advisor could help make that change easier.