“Common etiquette says not to talk about politics, sex, religion, or money. But these are the most interesting things to discuss.” – Anonymous.
Here’s a scenario every Financial Advisor has experienced (and if you haven’t, you will before November):
You’re sitting at your desk preparing for a meeting when your phone rings.
It’s your client, Andy*.
Andy and his wife became clients last year. You don’t know why he’s calling because you just had your portfolio review meeting with them last month.
After picking up the phone and hearing about their family trip to France, the conversation goes like this:
Advisor: “What’s on your mind, Andy?”
Andy: “Well, I know we went through everything last month, and it all looks good. But, I have a question…”
Advisor: “Fire away…”
Andy: “What is our plan if (insert presidential candidate) gets elected in November?? They are the worst thing that can happen to this country and will likely tank the economy with it. We’re moving to Canada if (insert presidential candidate) gets elected. If (insert presidential candidate) is elected, we’re all doomed! What are your thoughts?“
Maybe you haven’t had this exact conversation. But going into the fall of an election year, the odds of avoiding a political discussion are about as good as avoiding a Taylor Swift appearance during a Chiefs game.
In other words, the odds are not great.
Conversations like these are going to present themselves naturally. And when they do, you must ask yourself two questions:
1) Do I engage in these political conversations?
2) If so, what’s the best way to handle them?
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Should You Engage In Political Conversations?
To effectively make this decision, we need to consider three things:
1) Your Role
2) The Benefits
3) The Pitfalls
1. The Role of an Advisor
Your clients work with you for many reasons. But at the core, they need your help navigating their financial life and accomplishing their goals.
Your role is to help them do that while putting their interests first.
Anything that jeopardizes that, is putting yourself first.
Ask yourself: “Does expressing my opinions, beliefs, and speculative views about politics help my clients navigate their financial lives and accomplish their goals?”
No.
Can it harm them?
Yes.
Suppose you have differing views that strain the relationship, directly impacting their financial success odds. (And this likely is not great for retention!) Your role is not to act as though you’re a talking head on TV sharing your personal political views.
Instead, your role is to listen to what this conversation means to them so you can help them navigate the uncertainty of an election year while providing the guidance they need to accomplish their financial goals.
They’re not seeking a heated political debate. They’re looking for reassurance.
2. The Benefits
Political conversations are emotionally charged. While these topics can be treacherous, they can also be rewarding (if done right.)
While it might not feel like it in the moment, getting a call like the one from Andy is an incredible opportunity.
•Client Relationship Building Benefits: Politics, religion, sex, and money are four emotionally charged and stigmatized topics for most people. But when you talk about these things, who do you talk about them with? Those who listen without judgment and allow you to feel heard and understood. For most people, it’s the people they’re closest to. The ones they trust the most.
•Uncover Unknown Concerns: While the conversation might start with politics, their feelings might be tied to financial concerns. Are they really worried about a president tanking the market? Or are they concerned that a market correction might hinder their ability to fund their daughter’s education?
•Long-Term Stickiness: Any long-term relationship with a client will be filled with emotional ups and downs (uncertainty, fear, unexpected transitions, loss, etc.) Navigating through conversations like this can reinforce your place as a stabilizing force amidst the ups and downs. And you’ll have a client for life.
3. The Pitfalls
While engaging in political conversations is ripe with upside, let’s consider the downside.
We’ve already mentioned the worst-case scenario, where you choose to engage with your views and opinions and harm the relationship.
But what about avoiding the conversation altogether?
It’s tempting to think that avoiding the conversation would mean the potential upside and downside cancel out.
The thought process sounds like this:
“If I don’t engage in the conversation, I won’t get the potential benefits, but at least I won’t risk jeopardizing my relationship with the client.”
Unfortunately, it doesn’t work that way. You keep the risk without the benefits—the downside without the upside. It would be like investing in a company that can go down but can’t go up.
Let me explain:
•The quality of your relationships and your financial planning work relies on your client’s willingness to share personal, sensitive information with you. If they bring up a sensitive topic like politics and you immediately dismiss it, they won’t see you as a safe place to discuss personal, sensitive topics.
• Often, people simply need a place to process these emotional thoughts out loud to feel better. Without the opportunity to do that, the thoughts and corresponding emotions stay bottled up and can drive sub-optimal decisions. For example, expressing your fear about the future of the economy can help you talk yourself off the ledge. But if that fear stays bottled up, it might become the driving force convincing you to get out of the market.
•Clients might start losing confidence in you. If they believe that politics can impact their finances and you dismiss it as unimportant, they’ll unlikely walk away thinking: “I guess I’m wrong. Politics probably don’t matter.” They’ll likely walk away thinking, “Do I trust someone with my money who isn’t even aware of the political impact?”
If you remember your role as your client’s Advisor, engaging in political conversations is a rare opportunity to benefit your clients and your business.
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But, deciding to engage in the conversation is only half the battle. Navigating emotionally charged political conversations is a delicate act.
Stay tuned for next month when we’ll look at a framework for effectively navigating these conversations.
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Want to hear our President and Chief Investment Officer, Rick Wedell’s thoughts on preparing clients for potential volatility during an election? Read more here.
*Andy is a fictionalized character created for entertainment purposes. Any resemblance to real persons, living or dead, is purely coincidental. The characters and events depicted are entirely imaginary, and any similarity to actual events or individuals is unintended. The opinions, views, and actions attributed to Andy are those of a fictional persona and do not reflect the beliefs or actions of any real person.
