Why the personal conversation matters in financial advice

Financial worries can be a significant source of stress and overwhelm, prompting people to seek out professional financial advice. But they can also make it difficult to openly talk about money and what to do next. By the time a client seeks advice, they may have already spent weeks worrying about their family, researching their options or putting off a decision they feel under pressure to get right.

As advisers, we’re natural problem-solvers. Sometimes that means we can see the technical solution before a client has finished explaining their problem. But having the answer isn’t always the same as being helpful. Taking time to connect, listen and understand what is troubling them and why, needs to be part of the advice journey from the outset.

TAL’s Understanding Modern Australia research, conducted with McCrindle, found that 62 per cent of Australians feel stressed when thinking about their finances. But financial stress doesn’t always reflect someone’s financial position. For advisers, that makes understanding where a client’s worries are coming from an important part of assessing their financial position.

Mental Health Month is a timely reminder that the way we make clients feel throughout the advice journey matters. It’s an opportunity to reflect on how we can offer a space that makes those conversations easier to have, particularly when a client is finding it difficult to explain what it is troubling them or feels overwhelmed by a decision.

What a client’s story can tell us

For me, getting to know clients often involves sharing stories. Storytelling is an important part of my cultural background and reflects the way I naturally build connections. Through stories, people share experiences, knowledge is passed on, we learn how to better understand one another and the journeys that have shaped us.

One of the privileges of being an adviser is having the opportunity to connect with clients in that way. It helps them get to know me as I get to know them. These conversations have practical value, as I come to understand the responsibilities a client feels towards other people and what they most want their financial decisions to achieve.

In life insurance discussions, for example, we need to consider affordability and the level of cover.  A client might comfortably afford their insurance premiums but still question whether the cover represents value to them. Equally, a client might place enormous value on protecting their family but struggle with the financial commitment.

That’s where understanding the client’s circumstances beyond the numbers bring a human perspective to those decisions. The solution isn’t necessarily more or less insurance. It’s helping them explore their options and understanding the impact of their choices in the context of their own lives and values, particularly when they need to make trade-offs.

Life insurance conversations also ask people to contemplate things they’d probably rather not think about, let alone discuss. Death, disability, serious illness, losing an income or being unable to provide for their family. These aren’t your everyday conversations and people may never have seriously considered how their family would cope without them, or what they’d want their children’s lives to look like if they weren’t there.

Giving someone room to share their story can bring these thoughts into the conversation, allowing us to address the issue that is making the decision difficult.

More information doesn’t always mean more confidence

Understanding a client’s story also helps us recognise why they may remain worried, even after researching their options. Knowing more about money does not necessarily make financial decisions easier, particularly when someone is concerned about what it will mean for their family.

For example, AI is giving people another way to research their finances and prepare for advice conversations. I have seen it give clients the confidence to ask questions, making it easier for them to engage with me. Interestingly, some of these same clients acknowledge that despite all their research, they’re struggling to make a decision they feel confident enough to act on.

TAL’s research found that 42 per cent of Australians are likely to act on advice from a paid, in-person financial adviser, compared with 18 per cent for advice from an AI platform. For me, that reinforces the importance of having someone to talk through how information applies to their circumstances, work out what matters most and arrive at a decision they feel confident making.

If a client is worried about making a decision they’ll later regret, another explanation of a product may not resolve that concern. We need to understand what’s making the decision difficult, what they fear could happen and what matters most to them. From there, we can explore options, explain any trade-offs and help them understand what a recommendation can and cannot achieve.

We can’t promise that a financial decision will remove someone’s worries, but we can give them room to express those concerns and examine them with someone who understands their circumstances. That gives us a better basis for agreeing on a next step they feel comfortable taking.

Turning understanding into a useful next step

Once that reasoning is clear, we need to help the client approach the next decision at a manageable pace. We may identify several issues that require attention, but agreeing on priorities together allows us to explain what needs action now and what can wait.

Checking how they feel about proceeding can reveal concerns that checking their understanding alone would miss. A written summary and time to return with questions can also help them consider the advice after the meeting.

We need to recognise when a client requires support beyond our expertise, including help with their mental health. Financial advice cannot remove every source of pressure, but how we deliver it matters when someone is already feeling worried or overwhelmed.

For me, learning their story is part of doing that work well. It helps me understand what a client is trying to protect, why a choice feels difficult and what they need from our conversation. Mental Health Month is a reminder to give those concerns proper attention, so clients can leave feeling heard and better equipped to make the decision that brought them to us.

If you or someone you know is struggling, support is available.

Help is available 24/7 from Lifeline (13 11 14, or text 0477 13 11 14), Suicide Call Back Service (1300 659 467), Beyond Blue (1300 22 4636), Kids Helpline on 1800 55 1800, and 13YARN on 13 92 76.

Nicole Bendeich is the co-Founder and financial planner of Calibre Life.