This article was originally publised on Professional Planner.com.au on March 18th, 2024.

Transitioning to retirement is often one of the most stressful times for clients, and requires soft skills that not all advisers possess.

Hari Maragos, a principal and founder of Victoria Wealth Management, says advisers are so often “focused on strategy, the technical aspects, legislation, regulation, compliance and governance as a sector that we have lost our bedside manner in the process”.

“Many advisers don’t know how to have a conversation because there is no competency mapping, accreditation or continuous professional development points allocation to soft skills,” Maragos says.

What If Advice senior financial adviser Ashley Bishop says that retirement is a once-in-a-lifetime experience for most people.

“They are going from getting paid regularly to not earning money anymore and relying on an income that is no longer under their control,” Bishop says.

He says clients will have lots of questions. Advisers need to be patient and occasionally, they will have to challenge clients’ expectations.

Elston strategy adviser Jessie Hinds says empathy is one of the best skills advisers can draw on for anxious clients transitioning to retirement.

“Not only do clients worry about the financial implications of retirement, a lot of the time we find that clients feel like they’ve lost a major purpose in their life,” Hinds says.

“This can lead to feelings of unsettledness.

“It takes patience, active listening and empathy for clients to feel heard and understood.

“Naturally, this builds trust and a trusted relationship between client and adviser is pivotal in instilling confidence to take the retirement leap.”

Tapping into clients’ emotions

Hinds says that “as humans, we have two minds – the reasonable mind that is driven by logic and the emotional mind that is more instinctual, driven by feelings and our unconscious beliefs”.

“As advisers, it’s easy to appeal to the logical mind through the presentation of factual matter and by using complex problem-solving skill,” she says.

“A lot of the time, this is the major skill used by advisers to present data to clients.

“However, it’s a lot more challenging and takes a unique skill set to tap into the emotional minds of clients to understand what’s driving their behaviour or fears.”

Hinds stresses the art of listening at times of major life change. “As advisers, it’s in our nature to want to help people by giving them information and answers.

“I think where advisers can fall over is not truly understanding a client’s viewpoint or by not having the emotional intelligence to have deeper conversations about their fears, goals and family dynamics.”

Shadforth Financial Group private wealth adviser Shayne Sommer says a “show, don’t tell” approach can be useful at times such as transitioning to retirement.

Sommer believes advisers can benefit from being adaptable because clients often don’t follow their retirement plans “to the letter” as they finish up work.

“What may have been planned as a ‘complete stop’ from the workforce could become a shift to part-time work or an initial cease work that then becomes picking up a side hustle later,” she says.

“Be prepared to demonstrate your adaptability as your clients find their way into their new rhythm.”

A possibility of relevance deprivation

Sommer adds that clients may not only be worrying about their financial situation but also how their world will change in retirement.

“A form of ‘relevance deprivation’ may mean they don’t feel as valued as they were while employed or working and this may impact their emotional state,” she says.

“Ensuring advisers check in with their clients on both their feelings towards their finances and their place in the world is important. Clients may be more emotional than logical with their questions and decision-making as a result.”

Sommer cautions that it can be a delicate balance to move between emotional support and outlining the logical steps in the transition phase.

“Advisers can take a leadership position in driving the conversation of how clients will find meaning in retirement and reminding them the adviser is there in support of them in terms of their financial plan and their mindset throughout the process,” Sommers says.

Brushing up on your soft skills

Hinds notes that soft skills often come with experience.

“It’s difficult to have these skills from day one as an adviser without prior experience or training,” she says.

Sommer advises asking colleagues how they introduced topics such as leaving a legacy and the adequacy of the client’s family home.

“Speaking with retirees in your own social circle can also be helpful to ascertain anything they would like to have known or wish someone had told them as they entered this phase,” she says.

Hinds believes that to be able to continue to grow, advisers need self-awareness about their own areas of improvement.

“Being open to feedback and pursuing pathways of improvement can help develop these skills,” she says.

“I think it’s important to aim for progression, not perfection. Difficult conversations are difficult for a reason and not everyone is born with the skills to have them. A lot of the time it is a learned skill that develops over time.”

Retire on Purpose CEO Nick Freedman, says a retirement model based purely on economics is simplistic. So, he’s delivered a game plan for advisers where money is only one of the important elements of retirement.

He says it takes care of all the non-financial areas of retirement and complements advisers’ expert financial advice.

Freedman has also developed a profile to help people understand how the mind changes in the transition to retirement. It is focused on helping clients find a new purpose for their retirement based on their feelings, passions and values.

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