How to Handle Defensive Clients as a Financial Advisor

As advice-based financial advisors, we deal with a number of different personality types in our clients. Some are easy to get along with and take advice well and some…don’t. I’ve found that many of my clients who I’ve developed very close relationships with had their moments of defensiveness in the beginning (and periodically throughout our relationship). It’s not surprising. Talking about money can be a very delicate issue, especially when you consider how many different unhealthy assumptions many people carry in regards to their finances. That’s why it’s important to have a plan of action in place for when your clients do become defensive. Here are some strategies I have found to be effective.

Establish Control of the Relationship

Many advisors don’t like the word ‘control’ because it implies a dictator-style relationship with little flexibility. However, control doesn’t have to be negative. When you control the relationship you have with your client, it simply means you get to choose a path that is informative and mutually beneficial and that builds a foundation for a strong partnership. You can’t guarantee these things when you let your client take the reins. So how do you establish control in a way that is not, well…controlling? Some ideas would be to establish a preferred flow of communication, send regular updates to your clients with next steps spelled out, and insist on a set of ‘rules’ (like my rule of never meeting with just one member of a couple).

Maintain Your Integrity

When a client gets defensive, it’s easy to mirror their behavior and escalate the situation. It’s vitally important that you maintain your calm and professional demeanor when clients get defensive. Many times, this alone will cause them to relax and allow you to get the meeting back on track. Even if it doesn’t, you’ll have the peace of mind knowing that you didn’t compromise your integrity by getting upset or putting up your own defensive barriers.

Acknowledge if You’ve Made a Mistake

If your client is getting defensive because you’ve made a mistake, it’s imperative that you own up to it. We all make mistakes from time to time, and the worst thing you can do when one is made is to try to sweep it under the rug or deny you did anything wrong. If you made a mistake, explain what happened and show your client how you are prepared to make the situation right—then move on. If you’ve developed a strong relationship with the client, they should have enough trust in you to put the incident aside as an anomaly.

Try to See Their Side

As an effective mentor, it’s your job to see why your clients react to situations the way they do. Why is your client getting defensive? Have you hit on a touchy subject? Have you uncovered one of their fears regarding money or their future? Are they feeling like they’ve lost control or are fearing uncertainty? Once you see why your client is reacting defensively, you can often help them work through it in a more effective manner and it will also prevent you from taking their behavior personally.

Know When You’ve Got a PITA on Your Hands

There are clients who get defensive occasionally and can be effectively placated, and then there are those who are consistently up in arms no matter how hard you try to please them. I refer to the latter as PITAs, and I’m 100% convinced that these are the types of clients you do not need to keep. If your client has a proven track record of being difficult and constantly eating up your time and energy, it’s a sign you need to fire them. Not only will it help your emotional state, but it will also free up your book to bring on more clients who appreciate your value.

The way you deal with defensive clients will make a huge difference in your level of success as an advice-based financial advisor as well as your overall stress levels. If you have questions about working with difficult clients, please feel free to reach out. I’m always happy to help.