Being Sympathetic with Clients Can Lead to Bad Outcomes

Learning to be empathetic helps advisors with client and employee retention, say these experts.

By Megan McCoy & Sonya Lutter

It is easy to confuse the words sympathy and empathy, although they are not synonymous terms. Beyond feeling sorry for someone (sympathy), empathy is the ability to feel what someone is feeling and to fully imagine what it is like to walk in their shoes.

Sympathy is as easy as sending a card with “I’m sorry for your loss” or saying “Thank you for your service” to a soldier at a coffee shop. Sympathy puts its subject in more of a victim position, and the sympathizer may be perceived as unprofessional or even incompetent.

Conversely, empathy shows care and understanding while remaining unbiased and professional. Empathy is listening and essentially repeating back what is heard verbally and nonverbally and takes incredible focus and some vulnerability.

Empathy helps with employee and client retention. Financial planners do not have to agree with others to be empathetic. Listening and showing that you can understand another’s point of view is the important element.

Learning to be empathetic

Evidence suggests we can teach empathy. Helen Riess, M.D. (2017), developed a science-informed and evidence-based seven-part process using the acronym E.M.P.A.T.H.Y. to increase empathic reactions in various professions through:

  • Eye contact: Be consistent and look at the client’s eyes to capture their emotions and to hear their stories more fully whether in the same physical or virtual room.
  • Muscles of facial expression: The muscles of facial expression are those used to express the subtle signs of disgust, annoyance or tiredness. Smiling at people shows empathy.
  • Posture: Posture can similarly reflect boredom or excitement. Financial planners should sit at the same eye level as their clients to reduce power dynamics that will hinder trust and openness.
  • Affect: Affect (or emotional response) requires being present and listening for cues of sadness or fear.
  • Tone of voice: Matching the client’s tone of voice shows empathy.
  • Hearing the whole person: Hearing the whole person requires taking a step back to imagine how an incident impacts other areas of a person’s life.
  • Your response: The final element of showing empathy — your response — is understanding that we are not always accurate in our assessments. If something feels off or the client appears agitated or distressed, ask.

In order to practice empathy, financial planners must not be stressed or distracted themselves. When financial planners are under heightened physiological stress, their clients’ stress levels rise (Britt and Grable 2012).

Case study: Emotions around inherited investments

Brent Toland, CFP, entered the conference room and sat across the table from his clients Don and Rochelle Brown. Rochelle’s mother had passed away two months before, and the couple had been helping Rochelle’s brother settle the estate. Assets had been distributed and accounts retitled, and the Browns wanted advice as to what they should do with Rochelle’s inheritance.

Brent had already expressed sympathy by phone and with a card, but he still opened the meeting by saying, “Let me say again, Rochelle, that I am so very sorry for your loss.” He knew it was formulaic but felt it was nonetheless appropriate and polite. Rochelle nodded in acknowledgment.

At that point, Don jumped in, saying, “I’ve sent you copies of the account statements and share certificates, and we would like to know what you would recommend we do with these assets.” Before Brent could speak, Rochelle interjected, “The account has shares of Apple, IBM and Comcast. These are good companies, right? Should we just keep them?”

Brent responded that his investment philosophy was to be much more diversified than that, and he would actually recommend selling the stocks and adding the proceeds to their joint account to be invested in the diverse group of mutual funds they already owned. Because the inherited brokerage account had already been retitled into both Rochelle and Don’s names, this would be administratively easy to accomplish.

Rochelle nodded but looked distracted, gazing down and not making eye contact. She then asked, in a very quiet voice, “Should we keep the brokerage account? My parents worked so hard their whole lives and managed to save this money; it doesn’t feel good having it all ‘mushed’ together with other things.”

Realizing that for Rochelle the brokerage account and the funds in it were a symbolic and emotional connection to her mother, Brent knew that he needed to adjust his approach and align his advice more with what Rochelle was feeling.

Brent said, “I think I understand what you’re feeling right now. When my grandfather died, he left me some money that I kept in its own account. Every time I spent any money from the account I thought, ‘This is from my granddad.’”

Pausing as he noted Rochelle beginning to brighten, sitting up straighter and making eye contact, Brent continued, “Let’s set up a new account just for these funds. Then, whenever you buy something, you can think, ‘This is from my mom.’” Now fully engaged, Rochelle said, “That would be wonderful, I would love to watch it grow and know that I was continuing my mother’s legacy. And it would feel like my money, a bit of personal freedom that I got from my mom.”

The meeting concluded with smiles all around and a much brighter mood as Brent promised to follow up with the paperwork necessary to establish Rochelle’s new “Mom’s Legacy” account.”

Case study: The impact of a client’s grief

Applying sympathy versus empathy can be very damaging (emotionally and financially) to the client-planner relationship. Consider Josiah Goldmann, a financial planner, who had good intentions but has given his client Mariah Branham full fiduciary care. Mariah first sought Josiah’s assistance when she received a large land inheritance after her parents were tragically killed in an automobile accident.

Josiah, having recently experienced the death of his grandmother, felt sorry for Mariah. He said, “Mariah, I am so sorry for your parents’ death. I know how difficult that is. You don’t need to worry about getting a land appraisal. I’ll set it up for you.”

Mariah, still in shock from her parents’ death and confused about all of the decisions she had to make as the only child, responded, “Oh. OK. I guess that will work.” Josiah then returned to Mariah three weeks later with a potential buyer of the land and a recommended investment portfolio for the proceeds based on Mariah’s risk tolerance.

Josiah is sincerely trying to be helpful by removing tasks from Mariah’s responsibility, but he is too aggressive. By starting the conversation with an apology for the deaths of Mariah’s parents, he puts Mariah in an awkward position. For her to respond with “thank you” or “it’s not your fault” takes the focus off of her and puts it onto someone else.

An alternative reframe for Josiah could be, “I am sorry to hear about the loss of your parents.” This keeps the focus on Mariah and allows her space to say, “Thank you. I appreciate your sentiment,” versus “Thank you. It’s not your fault.”

Second, Josiah attempted to relate to Mariah by talking about his grandmother’s death. Mariah is the client. She is the priority. Grief is not a comparison game or competition. While Josiah can think about his grandmother, it is not appropriate to sympathize with his client and relate his own grief while she is still addressing her own.

Third, giving Mariah space is the best outcome. She does not need other people to make her decisions or complete her tasks unless she asks for specific assistance. What she needs is time and unbiased education to understand all of the options available to her.

In her heightened state of physiological stress, her focus and decision-making are very myopic. Josiah could instead ask what information she needs to help her make a decision as to how to move forward. He could reinforce that she has time to make a decision and that he is available to answer her questions.

Authentic empathy is a potent force

This article started with a differentiation between sympathy and empathy, and we ended with tangible advice on how to build your empathetic muscles. Applying these lessons on empathy to “game the system” or “to fake empathy” will work in the short term, but is not authentic empathy.

In fact, pretending to be empathetic to win over relationships borders on narcissism and will have the opposite effect of ruining relationships and eroding trust. In the end, as psychologist Carl Rogers stated, “We think we listen, but rarely do we listen with real understanding, true empathy. Yet, listening, of this very special kind, is one of the most potent forces for change that I know.”

Copyright © 2022 Certified Financial Planner Board of Standards, Inc. This article is an excerpt from the chapter “The Necessity of Empathy,” in the book “The Psychology of Financial Planning.”

 Sonya Lutter, Ph.D., CFP®, LMFT, is the director of financial health and wellness at Texas Tech University. She remains active with ENLITE, a company she built to bridge the gap between financial planning and mental health.

Megan McCoy, Ph.D., AFC, LMFT, CFT-I, is a faculty member at Kansas State University volunteers on the Financial Therapy Association’s Board of Directors and is the associate editor of Financial Planning Review. Dr. McCoy’s research focuses on financial therapy and financial self-efficacy, as well as diversity, equity and inclusion within financial planning.

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