How to protect clients’ finances from addiction

InvestmentNews did a survey in which 36% of the advisors who were polled said that their clients have been impacted by the opioid epidemic. Let me tell you why that number is very low and underreported: Your clients are not telling you that they are going through an issue. Going through addiction and substance abuse is so full of shame from the stigma.

Some of you might have clients who will share, but many of your clients are not telling you, and they are going through it right now. When we look at the red flags, a lot of them can be said of any addiction. Whether it is gambling or shopping or just financial issues, for some of these red flags you have to read between the lines. How many of your clients, when you sit down with them to do the annual review, all of a sudden stop talking about Junior? They are still talking about their daughter, but they are not talking about Junior anymore. They are not going to be the ones to just open up and share this with you. 

How many of your clients are grandparents who are just now becoming parents again? They have taken on the responsibility because the kids are no longer around ― they have overdosed, they have run away, or they are not fit. What do you think that does to their retirement plan? All of a sudden, they have to pay for college, and the cost of college is a pretty big shock compared to when their kids were growing up. So, reading between the lines on these red flags can help you because your clients, overall, are not making sound financial decisions. When you look at increased withdrawals or spending habits, or unexplained lifestyle changes, you can see they are not thinking clearly, that their judgment is cloudy. They’ve got a lot of other things going on. 

If you think there is an issue, how do you talk about it? Communication is key, and it is a difficult conversation to have. But, as advisors, that’s what we do — we have difficult conversations. It’s hard enough to get clients to talk to you about their finances, let alone their personal lives. So, how do we ask these questions? Well, just ask. If you think that there really, truly is an issue, let them know you are concerned: “I’ve seen some withdrawals that are concerning, and I just want to let you know I’m here to help.” But do it with compassion and empathy. They are not going to tell you right off the bat that something’s going on. First of all, you’ve got to let them know that nothing leaves this room, that it is confidential. And you have to be able to relate with them.

Let them know you are a real person, too, and that you’ve overcome obstacles. Say to them, “Look, we understand; we’re not all perfect. So, it’s OK that you’re going through this, and I can help.” Have that conversation, be nonjudgmental, and share how, with empathy and compassion and concern.

You may not have gone through this yourself, but at least you can provide them with resources about people who have been through it before or even through attorneys who specifically focus on asset protection. I provide webinars. My webinars are available to you if you don’t want to have that conversation directly with your clients but you know clients who might be going through this. You can provide a webinar to them to show that you see that there is an issue out there, and here are all the ways you can help.

Hear more in the new episode of MDRT Presents:

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