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One of the most frustrating parts of providing financial planning advice is that not all clients follow through on the advice that is clearly ‘good’ for them. Of course, the reality is that as human beings, we often don’t take the advice proffered by others. But when a prospective client comes to the financial planner for advice, there is a reasonable expectation that they’re ready to act on the advice they receive! Except, as it turns out, research suggests that often the fact that we reach out to an advice-provider is not necessarily a reflection of our readiness to take the advice; instead, it is just one of many steps in a client’s progress through the stages of change from inaction and complacency to actually taking action to change their situation for the better! And by understanding the various stages of change, we can better understand the reasons why clients get stuck in the first place and engage the client in specific processes that help them move forward and make progress in implementing their financial plans.

Interestingly, of the six stages of change identified by psychologist James Proschaka and his team of researchers, only half of the stages actually involve any action steps towards implementing the change. The first three stages of change, where many clients tend to get stuck in following through on their financial plan, don’t involve any action at all.  Instead, these ‘non-action’ stages involve self-reflection and emotional preparation to proceed with the change being considered, from Pre-Contemplation (where clients don’t even realize there’s a problem to contemplate fixing) to Contemplation (when they understand that a change is indeed necessary, and acknowledge that there is something they can do about it… but aren’t ready to do anything about it yet), to the third and last non-action stage, Preparation (where we begin to think about what needs to happen and will make plans to actually implement a change). Only at that point can the individual move on to the ‘action’ stages, which include taking action and maintaining the new behavior required to sustain the change.

Advisors can ask clients who seem to be having trouble taking action on their plans a set of four specific questions to understand where in the process they may be stuck: 1) whether the client can identify what they want to change; 2) if they know what they need to do to change; 3) if they believe they have the capacity to make the change, and; 4) if they are committed to begin taking action.  Alternatively, advisors can use ‘scaling’ questions to determine the degree of commitment and/or interest to the change being considered and use their clients' responses as a way to adjust courses of action accordingly.

Furthermore, the Transtheoretical Model (TTM) of Change is a framework that identifies ten processes that can be used as tools to help clients move through the various stages of change. These processes are either experiential (dealing with experiences through thought and emotion and more often associated with addressing non-action stages) and include steps that help clients through the Pre-Contemplation stage (Consciousness-Raising, Environmental Reevaluation, and Dramatic Relief) or a mix of other stages (Self-Reevaluation, Social Liberation), or behavioral (involving the client actively taking steps to set the change in motion) and include Self-Liberation, Helping Relationships, Reinforcement Management, Counter Conditioning, and Stimulus Control.

One of the most important considerations when helping clients implement change is the concept of self-efficacy, which is an individual’s sense of their ability to take action in response to a situation. Ideally, advisors will use TTM tools to help clients increase their self-efficacy, whether it be through providing the client with ample opportunity to reflect on the meaning of the change that needs to be made, or simply supporting their efforts (and not necessarily pushing them to action, which can be counterproductive with a client not yet ready to take action).

Ultimately, the key point is that there are processes that advisors can use to help their clients move through the various stages of change, which can make it easier for them to work with those clients who may be stuck or resistant to take action. It is also important to understand that change involves behavioral ‘non-action’ stages and that clients may still be making significant progress even though nothing seems to be happening. By recognizing where clients are in the change process, advisors can decide how to provide the right kind of support to their clients to help them tackle their specific blocking points, and move along in getting on track with their financial plans!

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In recent years, technological advances in remote communication have allowed all sorts of professionals to expand beyond having clients just in the towns and cities where they live and meeting those clients in just one location. Financial advisors have been taking advantage of that trend as well, as the internet and video and other collaborative meeting tools have increasingly made it feasible to serve clients across the country (or even around the world), start practices on a shoestring budget, or simply to keep clients when they relocate themselves (resulting in a more and more geographically diverse clientele over time). Still, financial advisors who adopted a fully virtual “location-independent” practice were in the minority... until this past March, when suddenly, those who were fortunate enough to have jobs that lent themselves to remote work, found themselves having to navigate the world of virtual work literally overnight, including financial advisors.

The transition wasn’t always smooth, and many advisors still lament what’s been lost by not being able to meet with clients in person. But the good news is that it turns out that there are some rather favorable aspects to meeting clients virtually, and engaging with professionals in a virtual environment is something that psychologists have been studying in their domain for many years now. In fact, a recent literature review in the Journal of Financial Planning suggests that virtual financial planning may be just as good (or perhaps even better) as advisors address their clients’ emotional concerns!

Specifically, the research shows that virtual client meetings create a lower barrier to entry for otherwise-nervous clients who want to meet, and provide more flexibility in how and when meetings happen, as they offer increased logistical convenience and reduce any stress around actually going to the meeting itself. And as it turns out, having the option to meet from a more comfortable and familiar (i.e., home) location may even have a therapeutic benefit in and of itself! Meanwhile, that same flexibility increases the advisor’s availability, which can be particularly valuable in times of need.

Beyond that, virtual financial planning can potentially help clients adhere to their plans as well. In a more ‘normal’ environment, where in-person meetings typically take an hour or so and happen only once or twice a year, it is very easy for tasks to fall through the proverbial cracks. Instead, shorter and more frequent virtual meetings can help both clients and advisors focus on a few of the most important tasks… and the supporting follow-through necessary to ensure they actually get done. This can be especially helpful for clients who are stressed about their finances, as might be more inclined to keep their virtual meeting and actually talk to their planner, instead of canceling or putting their meeting off.

That’s not to say that virtual meetings aren’t without their challenges, though, but the good news is that there are some simple strategies advisors can use to deal with those challenges effectively. At this point, it’s no mystery that “Zoom Fatigue” is a very real thing, as our brains simply aren’t wired to deal effectively in a (prolonged) virtual environment. Not only do they hinder our ability to read body language and receive subtle (but extremely important) nonverbal cues, but they also reduce the amount of feedback that participants provide, as it’s natural for our brains to zone out in such situations. To combat “Zoom Fatigue” and stay focused on the task at hand, advisors can try having only the video conferencing system open on their computer, shutting off notifications from their phones and other communication applications, avoid using a virtual background, keep microphone and cameras ‘on’, and use all the reduced distractions to focus themselves on being more active listeners.

Ultimately, the key point is that, although financial advisors have had to manage a plethora of changes in a post-pandemic world, the good news is that there are several benefits that clients (and advisors) can enjoy as a result, including offering lower barriers to entry and greater flexibility and convenience, as well as an increased likelihood that clients will adhere to their advisor’s recommendations. And while there are various challenges inherent in remote settings, there are a few easy-to-implement strategies that advisors can employ to not only harness the utility of virtual meetings, but in many cases, provide even better outcomes for clients!

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