In my long career as a financial planner, there have been many times that I had to deliver less than positive news.

Whether it was illustrating a client’s potential financial demise brought by living a lifestyle beyond their means, or the compassionate result of supporting adult children and grandchildren.

Not only is it stressful to convey the severity of the potentially disastrous financial outcomes, but also there is also a deep-seated fear of losing the client. This is not a profession for the faint of heart.

What I have found in delivering many plans, is that there are clients who will often tell you what they want you to hear, not always the way it really is. It’s human nature to avoid the unfettered truth, especially if it isn’t an appealing picture about their financial future.

Some look for validation of poor money decisions, or perhaps someone to blame if they run out of money.

Yet despite this repudiation, according to surveys, the number one financial fear most clients have is running out of money during retirement. Clearly there is often contradiction in what they want and how they live.

However as advisers, we know that in order to help them avoid bad financial decisions, it sometimes involves the triage of a heavy dose of reality. According to a recent Fidelity study (January 7, 2016), 55% of retirees are estimated to be unprepared to cover essential living expenses (housing, healthcare, and food).

Building a comprehensive plan for a client which, depending upon the client, typically includes investment planning, retirement and cash flow planning, income and estate tax planning, special needs or education planning and/or risk management recommendations can sometimes be tricky to deliver.

Whether it is recommending they work longer, cut expenses, sell assets, or purchase insurance (to name a few), in many cases, it requires delicate delivery of bad news in an empathetic way. Or some news may be more positive but still requires change and that change may have an emotional roadblock.

For example, if there are concentrated employer stock positions, clients do not always see the risk in holding a large undiversified investment; i.e. “having all their eggs in one basket”, especially, if over time, the stock has performed well. Additionally, having that hard conversation to recommend they downsize their home for example, which has obvious sentimental attachments, is difficult for some to accept the reality that their decisions can cause a major future financial crisis. Much of this rings true for the wealthy as well; advice to eliminate private jet travel or a second or third home can also create friction in the client-adviser relationship. Advisers are in a tough spot, as many recommendations to reduce risk receive strong headwinds and may create a tenuous relationship, whereby the balancing their own fear of delivering quality advice that may be the end of the relationship.

Our difficult task begins with helping people take the steps toward making those hard changes in order to avoid financial ruin. Before proposing a solution they will be receptive to, the client has to have insight into what is really inhibiting their ability to follow a healthy financial path. One of the tools we use is the Money Mind® Analyzer (www.findyourmoneymind.com) to dig deeper in uncovering the biases (happiness, fear, commitment) that affect their financial decision making.

Understanding your dominant Money Mind® is the most important step you can take toward improving your judgment, behavior and ultimately the outcomes from your money decisions. As humans we tend to allow our biases (whatever they may be) to interfere with sound logic. We often seek that which we know in rationalizing risk management decisions. Somewhat analogous to violating speed limits often and thinking you can’t possibly get a ticket because you haven’t been caught before. Or perhaps not buying flood, windstorm, or earthquake/homeowner insurance coverage because there hasn’t been a hurricane, flood or earthquake in ten years. Biases like these can cause us to unknowingly take on more risk in many areas of our lives, most predominantly affecting our financial lives.

I am an adviser, but also a client. I know first-hand how difficult it is to accept advice that is in conflict with my emotional desires. My own Financial Adviser has forewarned against some poor financial decisions, and fortunately I have heeded the advice. Other times though, I chose not to, because my happiness Money Mind® decision took over.

Fortunately, I am also more of a fear Money Mind® so they weren’t large derailments from my goals. I know personally and after decades of advising families, that as humans our desires and actions contain blinders that may be counter to a sound financial future.

Your adviser doesn’t have the same emotional bias you do in building your financial future. The key to good financial decision making begins with determining your personal bias.

Once you have the insight, you are better able to pause before making decisions and ask yourself “Is this my happiness Money Mind® taking over my rational logic?” You will be more open to accepting good advice from those who have your best financial future at heart.

The challenge for advisers is knowing how to deliver this advice with compassion and in many instances courage. Clearly there is an ethical responsibility to deliver sound advice.

Although it is difficult to not take it personally when clients disregard the forewarning, or perhaps terminate the relationship. However, keep in mind, people are human and have been living with their personal biases and behaviors long before they met you.

Further, as an adviser, depending upon how risky your client’s decisions are, it may be in your best long-term financial future, and peace of mind, to allow them to choose their path without you. 

Kathleen A. Grace, CFP®, CIMA® is a Managing Director at United Capital and Amazon Best-Selling Author of Prince Not So Charming, a financial planning novel. To read more of her blogs, CLICK HERE NOW.