Financial Advice: Discretion Key in Delicate Situations

Financial Advice: Discretion Key in Delicate Situations

Dealer-brokers and their independent financial advisors tend to develop basic strategies for addressing their traditional clients. They may have one strategy for young couples and another for older investors who have not done enough to save for their own retirements. But what about those delicate situations that do not follow traditional norms? In those situations, discretion is key.

Delicate investment situations are things like trying to help a recent widow or working with a divorcée just beginning to invest for the first time. Such situations are considered delicate because financial advisors are dealing with raw emotions right alongside the stark and sometimes unpleasant realities of financial management. The advisor must respect the client’s emotional state while still trying to steer that person in the right direction. It is not an easy row to hoe.

Discretion is key because it takes a more reserved approach to offering financial advice. A respectful advisor practicing discretion will be very careful to ask the right questions at the right times. He or she will be sensitive to the answers in light of whatever problems the client is experiencing. Discretion also dictates an extra measure of patience and grace while the struggling client works to figure it all out.

Respecting Other Advisors

Whether a financial advisor is employed by a dealer-broker or is completely independent, he or she is not likely to be the only one involved in a delicate investment situation. For example, consider a recent widow now burdened with the task of working with advisors who always worked exclusively with her husband in the past.

As Western International Securities explains, that widow will likely have a number of advisors she is working with. In addition to her financial advisor, she possibly has contact with an accountant and an attorney. She may be working with an insurance professional and even a banker. Discretion involves working together with all these other advisors on behalf of the client. Even if the financial advisor cannot work directly with them, he or she should at least not interfere with what they are trying to accomplish.

In cases where a widow does not already have other advisors to look too, it may be helpful for her financial advisor to help by recommending a good team. After all, the financial advisor isn’t an attorney or accountant. It would be to his or her advantage to help assemble a team capable of meeting all the widow’s needs.

Be Both Coach and Advisor

Another big part of an advisement approach based on discretion is the understanding that the financial advisor is as much a financial coach as an advice giver. The two things are different.

Financial advice is supposed to be given from a completely impartial perspective. When a financial advisor gives advice, he or she is supposed to be laying out facts and figures along with a thorough analysis of why a specific investment is good or bad. Clients in delicate situations still need that information, but they also need a little coaching.

The idea of coaching is to encourage clients to be part of the decision-making process by leading them through it the first few times. By coaching, financial advisors build confidence in the minds of their clients so that they are eventually able to make great decisions on their own.

Clients facing delicate decisions may struggle to wrap their minds around investing or financial planning. But that does not mean they cannot succeed as investors. With the help of a financial advisor who knows how to be discreet, the investor can move forward both financially and personally.


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