When new clients arrive for their first meeting with an adviser, they expect to talk about money. They don’t expect to talk about their childhood, parents and upbringing.
Many financial planners make it a priority to explore a client’s history with money. They ask about the individual’s earliest memories of money, their parents’ attitude about money and any childhood traumas linked to money.
These questions help advisers gain a better understanding of a client’s beliefs about money — ingrained lessons about what it means and how to manage it. The answers enable them to share strategies to save, spend and invest based on a client’s long-held values and family dynamics.
“Our experiences with our family leave an indelible impression on us,” said Sean Williams, a certified financial planner in Timonium, Md. “Our work ethic, savings habits and knowledge about investing are all modeled for us, whether positively or negatively.”
Digging to uncover clients’ money stories can trigger raw emotions. They may have buried a certain memory, or feel embarrassment when discussing a parent’s fear or greed, and dislike talking about it.
As much as advisers find this information of value, is it worth the trouble? Do the benefits of delving into a client’s past offset the discomfort that may result?
Even if clients are willing to open up, they may find it jarring. They hire an adviser to get help putting their finances in order. But they unexpectedly wind up confessing how their parents’ anxiety about money has scarred them.
The way in which advisers broach the subject sets the stage for clients to speak freely. Ideally, they lay the groundwork by assuring clients of confidentiality and setting the context.
For example, they might preface the meeting by saying, “With all my clients, I find I can be most helpful if I know a bit more about them. Not just their present but also their past. Our experiences with money from a young age tend to carry over into our adult life. Our deeply rooted attitudes and beliefs about money affect how we make financial decisions.”
Natalie Pine, a certified financial planner in College Station, Tex., kicks off meetings with an overview: “We’ll talk about your earliest memories of money, how that may have changed over time and your parents’ attitudes about money.”
She says some clients express surprise. They respond, “Oh, I thought this was a goal-setting meeting so I came prepared with my goals.”
“We’ll get to that after we go through your money story,” Pine assures them.
Like many advisers, Pine finds that new clients ultimately appreciate the opportunity to explore their past. Of course, it helps to keep a box of tissues nearby because such conversations can trigger wrenching memories.
Clients can turn quiet and reflective, Pine says. It’s important to let them work through what they’re feeling without interrupting or pelting them with more questions.
“Sometimes they share memories that are not happy ones,” she added. “They cry. Maybe they’ve never shared these memories before.”
Due to the sensitive nature of these conversations, advisers proceed with care. They try to listen for understanding, not agreement. Rather than judge what they hear, they remain curious and empathetic.
Such intimate discussions test an adviser’s people skills. If they’re not careful, genuine interest in a client’s past can lapse into an interrogation.
“Some advisers can be more invasive,” Williams said. As they reel off a battery of questions, it comes across as an artificial exercise rather than a natural give-and-take.
To avoid making the conversation feel like a rote onboarding procedure, Williams likes to open with broad questions such as, “What are your attitudes and beliefs about money?”
“From there, they may bring up their past relationship with money,” he said. “They may also start talking about their family.”
Ultimately, advisers hope to uncover a client’s money history. Getting someone to discuss their resentment of a parent’s frugality or dismay at seeing a once-prosperous family go broke can create the glue that seals a client-adviser relationship.
Also read: No matter your age, here’s how to tell if your finances are on the right track
Plus: What to expect — and watch out for — when your financial adviser retires
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