There is an art to handling both sides of a client’s personality. It would be great if clients always listened to your advice, but they will sometimes demand to make seemingly irrational investment decisions. You have to learn how to handle the good and bad days with every client.
Many clients will develop radical ideas about how they want to invest their money. They will listen to your advice, only to decide that they want to ignore it. You may think that their emotions are getting the better of them.
How can you offer proper guidance to clients who act this way? Luckily, it is possible to learn to handle both sides of your client’s personality. This is a valuable skill that can lead to great returns in the long run.
Respect Your Client’s Emotions
When a client shows up to your office in an emotionally driven state of mind, you should respect their opinions. Nobody is perfectly rational at all times. Rather than get annoyed at seemingly unreasonable investment ideas, try to understand where your client is coming from.
One common emotional state that leads to an unusual investment strategy is fear. When a client is afraid of losing money, they will make mistakes. These mistakes are amplified when they feel like they are missing out on profitable opportunities.
Another factor is a client’s ego. They may be trying to keep up with their friends and therefore experiencing the desire to earn money faster. This is a normal human experience that can be managed if you understand their emotional state.
When you start with an understanding of your client’s feelings, you are more likely to have a productive conversation. You can ask them questions about their thought process while still respecting their ideas. This can guide them towards a more rational decision-making process.
The Better Side
Your client wants to make good investment decisions. That means that you are on the same team even if they don’t always stay in a rational state of mind.
Consider yourself to be working with the client, not against them. If they truly want to make an emotional decision and you cannot convince them otherwise, it is ultimately their decision to make. Offer counsel, but do not condescend or otherwise disrespect their decision.
If you can learn to stay calm and rational with your client, you will get the best results. You may not be able to save them from every bad idea, but you can improve their overall investment results. If your client makes more money with you than they would without you, you are doing a great job.