Can You Predict Client Stress?
The psychology of financial planning is more than behavioral finance. It’s about the interaction between you and your client. It considers you, your client and the planning process; outside influences; and generally, how all of us think and feel about money. It’s also about recognizing and addressing physiological stress—the kind that triggers the fight-or-flight response. As advisers like you work more with individual participants, knowing this can help you better understand their decisionmaking.
Raising the Temperature
We use common phrases such as “Are you getting cold feet?” without much thought to their origin. It turns out, cold feet are a biological indicator of stress. When the brain senses danger, it goes into automatic protection mode. It sends the signal to prepare to fight or run away, which requires extra blood pumping through the heart. The extremities—not just the feet, but the hands and brain too—resultingly receive less blood.
People can trick themselves into thinking they’re less stressed than they really are, according to the writers of “Assessing Client Stress and Why It Matters to Financial Advisors.” You can get a quick sense of how stressed someone is by shaking her hand. If hands are cold, that person is experiencing a fight-or-flight reaction and making decisions based on habit and emotions.
Skin temperature of 90 degrees or higher indicates good blood flow to the extremities and calm mental activity. Skin temperature in the 80s indicates ambivalence and stress piling up. Once you get below 80, the person is in a full-on fight-or-flight response.
It’s hard to know skin temperature by touch alone without practice. This makes self-assessment not only useful but a prerequisite in assessing client stress.
Now What?
When you see stress in a participant or client, call it out. If you’re comfortable, engage in a purposeful cognitive-behavior conversation by attaching meaning to the stress. Start by asking the client to describe what’s on her mind—i.e., determine the stressor.
“When you see stress in a participant or client, call it out. If you’re comfortable, engage in a purposeful cognitive-behavior conversation …”
As the client talks, write down her thoughts associated with that stressor. Then, have her rate her belief in each statement she just made, from 0% to 100%. I find it useful to do this exercise together by jotting the items on a shared screen, if working virtually, or on a whiteboard, if working in the same room.
Now, challenge the client’s thoughts by asking her to provide evidence for and against them. This can be conversational, or you can make a chart, outlining the person’s thoughts as she talks. Encourage the client to consider how else she might interpret the stressor after reviewing the evidence she assembled.
A single conversation is unlikely to result in clients changing their mind about a stressor, but you might be able to move the needle a couple of percentage points. More importantly, you have opened the door for fuller transparency leading to creating trust and rapport with the client.
Change Up the Office
If the idea of engaging in a cognitive-behavior conversation is unattractive to you, there are more passive ways to reduce client stress.
For one, your stress is highly correlated with client stress: When you are more stressed—test your skin temperature!—those around you are more stressed. Find ways to reduce the level of stress in your life through healthy coping strategies, talking to others or changing your routine.
Secondly, change your office design. My research with John Grable shows that a living room feel is associated with lower client stress. You don’t need a table, but if you insist on keeping one “to hold your computer,” find something short and small like a coffee table. Bring in as much sunlight and nature as possible. And when meeting virtually, leave your real background on to create a sense of openness.
Sonya Lutter is a certified financial planner and licensed marriage and family therapist. She is the founder of EnLite, where she helps bridge the gap between mental health and financial planning, and director of financial health and wellness with Texas Tech University School of Financial Planning. She has authored/co-authored books such as “Financial Therapy.”