When you have a playbook for working with clients and co-creating outcomes that are fulfilling during the most chaotic times, you have a playbook for any time. And that playbook can be shared with your clients as you work together, thereby giving them the skills and experience to better handle their next major life event.
In the previous article, I introduced the four stages of transition that are your guide during financial transitions planning.
4. New Normal
Anticipation, you may recall, begins when the client is first made aware that the major life event is a possibility. In anticipation, there is a shift in attention and perception. A narrative begins, and with it comes expectations. Your job is to manage the expectations of the client and guide them through the idea of change and transition. It doesn’t matter what event we are talking about; the moment it arises in awareness is the moment the story begins.
The actual change occurs during ending: a death, retirement, the sale of a business, divorce. Transitions tell you where you are. And nowhere is that more pronounced than during ending. The financials might not have shifted yet but responsibility has: there is no going back for the client. This is the time for you to help your client manage the change they are in the midst of, and to safeguard them from making poor decisions while they grieve the part of their life or identity that has either been taken away from them or they have walked away from. There is a lot going on in that sentence, so let’s unpack it from the point of view of the work of the advisor.
This is the time for you to help your client manage the change they are in the midst of . . .
Change management involves a lot of “doing,” most of which you are familiar with because it’s the purview of the technical side so you’ve been trained in what to do. There may be changes in ownership or guardianship, benefits to file for, a geographical move and/or difficult conversations to have. And there is almost always the need to assess cash flow. Again, you know that you need to do all of this. But do you know how to do it while your client is trying to find their unique meaning in their ending?
… and to safeguard them from making poor decisions …
We all agree that during ending there are decisions to be made, and some will shape the client’s life for a long time. In ending, strands of thoughts, emotions, and intentions are entangled tightly, which can create a feeling of intense overwhelm or confusion and an inability to determine what is important. Sometimes, particularly if there has been a large transfer of funds, all of that overwhelm and confusion is handled with impulse spending involving large purchases. Other times it is handled with a sudden and dramatic change, such as a move across the country or a marriage.
I use the word “handled” ironically, as neither shopping sprees nor lightning-fast changes in residence or marital status “handles” anything.
The protocol during ending and other times of overwhelm is to untangle the strands of concerns, emotions, and intentions. You can’t untangle the gnarly ball of overwhelm if you can’t differentiate its individual strands enough to separate them out.
You begin untangling by never assuming you know what their unique ball looks like. Never assume you know everything a client is thinking about or worried about. Instead, get it all out in the open. The tool I use for this is one I introduced in Sudden Money: Managing a Financial Windfall and has become a favorite with advisors and their clients. It’s called the Decision Free Zone (DFZ) and I think part of the reason for its appeal is that we’ve all made bad decisions. And we’ve all made decisions that we didn’t need to make. And we all know either first or second hand, that there is such a thing as a bad decision that is irrevocable.
Furthermore, if you spend more than ten minutes reading a book about behavioral finance, you will conclude that few of us should be left to our own devices when it comes to making decisions that involve money.
The DFZ is multi-layer tool that begins with a creating a collage of all of the individual strands in the client’s mind and heart and ends with an action plan for the few items (and there’s rarely more than that) that need to be addressed immediately.
Now, I know what you’re thinking. Sometimes a client in ending is so paralyzed by the event that they can’t even begin to help you help them sort things out. This happens most frequently with events that don’t have an anticipation stage, such as an unexpected death or even the willing of the lottery. Such events represent a type and degree of jolt to the individual that they will speak of being “frozen” or “in a fog.” These are the circumstances that create the potential for financial havoc.
People who are in shock need to be protected while they process what has happened. They need to absorb the shock of the event, but they probably also need to get some things done. They need a DFZ, but first they need to be stabilized by addressing the real and perceived threats to their well being.
... while they grieve the part of their life or identity that has either been taken away from them or they have walked away from.
Many people have difficulty saying goodbye to one identity and transitioning to another. Regardless of how relieved they might be to be getting divorced after years of being unhappy, for example, that doesn’t mean it’s easy to leave their married-person identity behind. No one should be rushed to “get over it” or “move on” during ending, regardless of their event. I think most of us understand that intellectually, but that doesn’t mean we always give others the time and space they need to mourn the loss of what was.
You know ending is coming to a close when your client is ready and willing to move forward with the plan they have co-created with you. Ease and clarity are the fruit of the sometimes precarious work of ending—but only if you know the terrain and how to navigate it.