What Canadian finance pros need to know about money and mental health

It makes sense then, that financial advisors, bankers, accountants and anyone helping people manage their finances, may have an emotionally fraught conversation with a client from time-to-time. Whether a client becomes quiet, hyperactive or even cries, these are all natural reactions to an emotionally uncomfortable state. But that doesn’t mean we have to let these reactions come in the way of giving sound advice and helping people reach their financial goals. 

How to talk about money with clients

In negotiations or tense conversations surrounding money, Fotini Iconomopoulos, an author and negotiation expert, points out that there are three things people are most scared of. People tell her, “I don’t want to look stupid or leave money on the table, and I don’t want to damage relationships,” she says. The author of Say Less, Get More (HarperCollins, 2021) says there is an element of the unknown when it comes to money. Iconomopoulos has witnessed, and even been in her own negotiations, where emotions get elevated pretty quickly. 

She believes the best defense against emotional distress is preparation: doing your research, and even role playing to get a sense of the words that you want to say, all in hope of minimizing mistakes.

Why are people paralyzed when it comes to money decisions?

“I do find that people only have so much bandwidth to take on certain things,” says Daniel Clarke, a former restaurateur and now a life insurance advisor from Hunstville, Ont. He has been working for four years with clients on their financial needs. Clarke manages a roster of around 70 people, and has seen how financial stress can show up in a meeting with a client. While Clarke has never had a movie-style, drama-filled moment play out, he has certainly felt shifts in a client’s demeanour. 

“I think for a lot of people, money is something that they do tend to put on the back burner,” Clarke explains. They know that they should have life insurance because they have a mortgage or they just had a kid. They know they should be saving or have an emergency fund. But for whatever reason, it just keeps getting pushed down the list of things that they need to take care of.” Clarke admits that this can be a resistance or an avoidance of something important. 

Clarke has had people back away from discussing their finances even though they understand it is something they need, and want, to attend to. Meetings may get canceled and Clarke admits it’s a balancing act—he doesn’t want to push too much for a follow-up, but wants to remind them this was something they wanted to tackle at one point. 

Clarke also admits that when it comes to someone’s state of mind in a meeting, “you don’t know what you don’t know,” so having a few tools on how to approach an uncomfortable client can be very helpful. 

Why clients react

While mental health theories that affect our view on money are vast, here are a few key ideas that might help you understand a client the next time the person sitting across from you becomes uncomfortable when discussing their finances. And you don’t have to be a psychotherapist to put them to good use.

Intergenerational trauma around money

Science has proven intergenerational trauma exists. Essentially, when our parents or grandparents experience oppressive and/or distressing events, this trauma can appear in us, both in our genes and in our mental well-being. 

In fact, financial woes can often stem from intergenerational trauma. If your parents or grandparents went through the Great Depression or were living below the poverty line for most of their lives, their views and anxieties around money will have an effect on your current experiences. And it can be helpful for those in finance to see someone’s emotional reactions may have nothing to do with the current conversation, but may be due to some unresolved or unprocessed financial trauma from generations past. 

What you can do: It may be difficult to interpret someone’s responses as intergenerational trauma. It can often take therapists a while to uncover this information themselves. So, the best thing to do here is understand that some people have very deep-seated challenges around money and finances, and try not to take anything personally. Focus on building a trusting and open relationship with your client, and hopefully your client will respond in kind. 

Outward emotions that seem negative

What goes on with the body when we are emotionally distressed varies person to person. So, it’s important to note that these reactions are involuntary and hard for someone to control. Most of us have heard of fight, flight or freeze, and the psychological community is now looking at fawn as another response to mental distress. In general terms, fawn can lead to people-pleasing. When a phrase or moment lends to someone feeling uncomfortable in a meeting, this discomfort is felt unconsciously, and the body can react, leaving the client possibly distressed and emotionally dysregulated. 

For example, fight can mean that someone becomes argumentative or pushes back. Flight means they try to take themselves out of the situation, such as leaving the room or hanging up. And a freeze response could mean that someone stops talking and goes inward, becoming silent. Fawn, a.k.a. people-pleasing, might mean the client is very agreeable even when they don’t fully understand what advice is being given.

When in emotional dysregulation, defence mechanisms kick in and we start to operate from a protective stance, rather than an open, communicative place. Again, this likely has nothing directly to do with the present conversation, but is coming up through unconscious material in the here and now. 

What you can do: If you feel an emotional shift happen with a client, try to take a deep breath, and ask if the client needs anything, like a mini break, a glass of water or even a rehashing of the information that you just shared. Their emotional brain may be taking over and they will likely need a moment or two to come back to regulation, if that’s available to them. If they are unable to calm their nervous system, it may be worth suggesting, gently, that they revisit the meeting at another time.

What can you do to manage clients to better manage their money

What can you do when someone becomes emotionally dysregulated while talking about their money? We’re not recommending that you treat a client who comes to you for financial advice through a psychotherapeutic lens (psychotherapy is a regulated profession in Ontario, New Brunswick, Nova Scotia and P.E.I.); however there are some ways in which you can help connect with them with empathy and understanding, which in turn may help you build lasting relationships. 

Iconomopoulos cites psychologist Robert Cialdini and a study he facilitated where people were asked to negotiate in two different ways: one cohort was told that time is money and to get the deal done, while the other cohort was asked to connect with the person they were negotiating with on a human level. The latter group were successful 90% of the time. Connecting on a human level should help create a collaborative space even when there is money involved. 

What you can do: Well, get curious, but not overly personal. As you can see above, finances can be tethered to a plethora of emotions. When a client starts to shut down, try asking what they need at that moment—a deep breath, a quick break, more information or even your advice. Or try asking if they want to go back to a specific point so that they have more clarity. 

Giving clients space

Giving people the space to make decisions and process information is a helpful tool no matter the situation you find yourself in. 

Clarke acknowledges that he will sometimes repeat back questions a client asks in order to make sure he understands what they’re asking, which is a great way from a psychological perspective to show someone that they are being heard. That’s a need that all of us have.

If someone does become visibly dysregulated during a meeting, to the point of tears or even anger, try taking some of the pressure off by asking if they want to slow things down, go for a walk or get a coffee or some water. This should let them know they have time to make these difficult decisions, and that you’re not trying to pressure them. 

Read more about mental health and money:

• What is financial well-being? What does it mean to Canadians?
• Flow state vs. cash flow: Make better money decisions by discovering your flow state
• What is financial freedom in Canada?
• What are money scripts? What’s yours?

About Michelle Bilodeau, RP

A psychodynamic psychotherapist and former journalist, Michelle Bilodeau works with clients to build self-esteem, process grief, work through life transitions and address a plethora of emotional experiences.

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