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Client Conversations

How to have better client conversations (even in uncertain times)

Paul Cieslik

Updated onDecember 10, 2023

7 MIN ARTICLE

As a professional who has had thousands of client conversations and quarterly or annual reviews, chances are you’ve developed a way of communicating that helps you elicit the information you need to provide direction for your clients. And chances are, it feels like it’s working. 

 

But during periods of extreme market volatility, economic uncertainty or unprecedented events, those conversations can get tough. Even in a bull market, when clients are questioning whether they should take on more risk in pursuit of greater returns, how you steer the conversation is crucial. When clients need empathy, reassurance and context to avoid emotional decision-making — especially when everyone is pressed for time — what you say and how you say it can make all the difference in your relationships.

 

The following “four-box” framework for client conversations can help. It covers four essential steps to having a meaningful conversation in a way that instills trust. This framework comes in handy when volatility strikes, but you can adjust the language to fit whatever environment you’re operating in.

4 Box Crucial Client Conversations 

 

Description: Financial advisors play an important role in helping put investor concerns into context. The 4 Box Crucial Client Conversations framework can help.  Paul Cieslik, at home in Florida, walks through the proven steps, providing specific language and useful phrases you can use in discussions with your clients.

 

Featuring: Paul Cieslik, Senior Vice President, Advisor Practice Management 

 

Paul Cieslik: Hello. My name is Paul Cieslik. I'm a senior vice president/national speaker with Capital Group/American Funds.

 

One of the most difficult aspects of an advisor's job is managing clients through challenging times, keeping them from acting on instincts that may get in the way of their real-life financial goals. What we face today seems so momentous it's hard to know where to start. That's why it helps to have a framework to guide you through difficult client conversations and make the most of them.

 

There are four steps to an effective, efficient client conversation, and each has a distinct goal. First, acknowledge where the client stands. Second, provide your perspective, and third, build confidence. Finally, fourth, share opportunities. We call our framework the Four-Box Crucial Client Conversations because it's just that simple, four boxes (laughs). You can draw a line vertically and horizontally on a piece of paper, and there, you have it. We also have downloadable Four-Box PDFs available for you and for you to use with your clients. (We also have downloadable 4 Box PDFs available for you and for you to use with your clients.)

 

The simplicity of this framework allows you to use it for any conversation. The Four-Box is a proven tool used by thousands of advisors to help clients through the great financial crisis, the tech bubble, and other periods of volatility during the past two decades. 

 

The first step is to acknowledge the client. The goal is to empathize, listen to, and identify client concerns. In other words, check in before you step in. Empathize. Acknowledge that you understand whatever they're feeling. Say to them, "I know that these are unsettling times." Let them know you care. "I wanna make sure you're doing okay." Demonstrating empathy begins by listening. Be careful not to presume to know what their concerns are going into the conversation. Find out what they are. Let them empty their emotional bucket. Ask them, "How are you holding up? How are you feeling?" 

 

Then, identify. Try to get at what's specifically on their mind. "I'm sure you have questions for me. What concerns you most?" Repeat back what you've heard. Ensure that they know that you are listening.

 

Now, it's time to move from acknowledge to sharing your perspective. To do so, it's important to acknowledge the realities of the market and the economy while reminding clients of the importance of keeping a long-term perspective. We don't know when the market will recover or what the full impact will. What we do know is investors that stay the course have historically benefited over the long run. I'm not sure if we're at a market [bottom], but I can tell you we're probably not at a market [top].

 

Then, set the agenda for the conversation. This is critical as it creates an accountability standard ensuring that you're having a productive call connecting emotionally with your client. I believe if we share our perspective, it can help. "I remain confident about your goals and know that opportunities exist."

 

The perspective goal is to share and educate. The further back you look, the further ahead you can see. Of course, this doesn't mean we know what's going to happen in the future, but it's important to help clients put current events into context.  

 

There are different types of perspective you can share and use to educate clients. The first step is perspective on the current market. For example, there are three broad challenges. First is biological. This is seventh virus in two decades. Second is economic, with global supply chains' stress setting the backdrop for a recession. Third is psychological, with the demand-side realities of reduced travel, new work protocols, and social distancing. It's just as important to offer a historical perspective. Remind clients, maybe a few who have never lived through a bear market, that we have been through market turmoil before and that we're prepared for this. Share. Market declines are normal, natural, and expected. Remind them, "We've been here before, and markets have always recovered."

 

If you need supporting documentation to make the case, know we offer informative materials that can help put these three broad challenges into perspective. For example, Capital Group's CEO Tim Armour's update on weathering the coronavirus in which he discusses the implications for the broader economy and what investors should be thinking about now. We also offer plenty of market perspective. This Weathering Market Declines chart shows intra-year declines in the Standard & Poor's 500 Index and how annual price returns have been positive in 51 of 70 years.

 

Moving through our conversations, remind clients that volatility is factored into the decisions they've made so far. Shift to a focus on goals, which is a key component to reinforcing confidence. "You have made smart, responsible decisions in managing your money, so now let's discuss what matters to you most, your goals." 

 

The confidence step is to remind the client with specificity that you know what matters to them. It's all about prioritizing goals and focusing on what you can control. Reassure the client that a plan is still in place, but it may be time to reconfirm priorities. 

 

Get the client talking about their goals. Provide reassurance when so much feels out of control. Let them know, "I remain confident about your goals. You've shared with me the things that matter to you. I'd like to walk through each one and reconfirm your goals. Let's start with your needs, followed by your wants, and lastly, your wishes."

 

Once you've instilled confidence, remind them that you're here to help and shift to sharing an opportunity. "My role, my responsibility is to share with you a few opportunities that are aligned with your goals."

 

The opportunity goal is to take action. It's to provide of point of view to act on, not a fence to sit on. The action steps may differ depending upon the client's concerns. We know that for most clients, there's great opportunity in sticking to the long-term plan and staying invested.

 

The primary message we want to send is to follow the plan. Follow the plan that we've built. We've designed a plan to stay with in good times and bad, but this may also be a good time to consider financial moves that have nothing to do with the market like reducing or f- refinancing debt. Act on smart financial moves. Consider reducing debt, maximizing 401(k) contributions, or buy undervalued assets. 

 

For clients who are concerned about volatility, maybe this is an opportunity for a portfolio review either to consider rebalancing or making the investments more defensive on the downside. Review your portfolio with an eye towards investment quality and risk. Alternately, some clients may see this as a buying opportunity and wanna take on more risk. Either way, a portfolio review can remind them that the plan they built was based on careful consideration of their goals and risk tolerance.

 

Again, if you need support, our literature on how to handle market declines can help you calm fears, move the client away from thinking emotionally, and make the case for staying invested. 

 

In closing, it's important to check in with your client. I hope you have found this conversation helpful and remain as confident as I am that you're on track to achieve your goals.

 

If you need it, we offer downloadable versions of the Four-Box Framework. There's a version that includes action steps and links to material designed to help you guide client conversations in this environment. As mentioned earlier, there's also a blank client worksheet that you can fill in online for your use with your clients.

 

Thank you. Thank you for what you do, for improving investor outcomes by providing the advice, the support, and the guidance they need. You change people's lives for the better, and on behalf of Capital Group, thank you.

Step 1: ACKNOWLEDGE

 

Understand the concerns of others before explaining yours.


Active listening and thoughtful questioning are key to being a good conversationalist. These traits can also help uncover client concerns and provide the foundation for demonstrating empathy. While some clients are all too ready to unleash their lists of concerns, others might be hesitant to come clean about their challenges or express fears, most of which boil down to: “Am I going to be okay?” Here are some phrases and strategies you might use:

 

  • Acknowledge what is going on. If it’s an event in the news or conditions that result in market volatility, it is OK to recognize that these things can be very unsettling. 
  • Be honest. In cases when even you don’t know what to say, you can offer a frank assessment. “We likely don’t fully know the severity of the conditions or how long the resulting economic and/or market disruption will last.”
  • Don’t presume. Ask questions to understand the specific concerns of the other person; give clients a chance to empty their emotional buckets. What’s bothering them may not be what you think. 
  • Repeat back to them what you’ve heard. Volleying back their concerns — in their own words, when possible — lets clients know you’ve been listening, not just waiting to talk.

Words to use:
“I know these are unsettling times.”
“I want to make sure you are doing OK.”
“How are you holding up?”
“How are you feeling?”
“I am sure you have questions for me.”
“What concerns you most?”
“What I’m hearing you say is…”

Trust triggers


Research has shown that certain conversational behaviors reliably trigger the release of oxytocin, sometimes known as the “trust hormone,” while others result in the production of cortisol, often called nature’s alarm system. In an article in the Harvard Business Review, the late Judith Glaser, an expert on so-called conversational intelligence and founder of the CreatingWE® Institute, cataloged some common conversational behaviors based on whether they triggered the production of oxytocin or cortisol.

A horizontal bar chart showing whether different conversational behaviors affect the product of trust-building or trust-reducing hormones in the listener. Five conversational behaviors have been shown to produce Oxytocin, also known as the trust hormone. From most-to-least, those behaviors are: concern for others, truthful about what’s on mind, stimulate discussion/curiosity, paint picture of mutual success, open to difficult conversations. Five behaviors shown to produce cortisol, also known as nature’s alarm system. From most to least, those behaviors are: don’t trust others’ intentions, focused on convincing others, others are not understanding, pretend to be listening, emotions detract from listening. The sources are “Creating We Institute” and Qualtrics. The chart originally appeared in the Harvard Business Review.

Step 2: PERSPECTIVE

 

Shed light on the bigger picture.


Putting things into context can help guide a conversation from panicked to productive. An informed perspective with historical context can help clients process market ups and downs. A broader perspective can make even unprecedented events seem navigable. The following strategies can help:

 

  • Remind clients that while the particular crisis you’re facing may be new, market volatility is not. As the saying goes, the further back you look, the further ahead you’ll see. Markets have survived a great variety of disruptions in the past.
  • Find context for the crisis you’re facing. For example, although COVID-19 is the most severe pandemic of our lifetime so far, it’s actually the seventh virus outbreak of the last two decades. While those other outbreaks had short-term impacts on economic and financial market growth, they might be viewed as minor events over the long term.   
  • Provide relevant detail: Demonstrating your grasp of an issue’s complexity without slipping into jargon establishes both expertise and vigilance.

Words to use:
“We don’t know when the market will recover or what the full impact will be. But here’s what we do know...”
“Market declines are normal, natural and expected.”
“We’ve been here before, and markets have always recovered.”
“I’m not sure if we’re at a market bottom, but I can tell you we’re probably not at a market top.”
“What we do know is investors who stay the course have historically benefited over the long run."

Step 3: CONFIDENCE

 

Refocus on the progress made.


Confidence can be infectious. Helping clients pay attention to the things within their control and revisiting the goals you’ve developed together creates a new focus point. This step is important in bull markets and bear markets alike. For example, surging markets may tempt clients to abandon a balanced approach. Bringing them back to the goals they defined during less emotional periods is crucial. Consider the following strategies:

 

  • Ask clients about the things they can actually control during market volatility: savings behavior, a balanced mix of personal investments, goal-setting and a commitment to staying on track. Ask what they think should change. 
  • Remind them that you know what matters most to them and that you developed these objectives together, perhaps during a calmer time. Discuss specific objectives clients established, and remind them that changes in market conditions likely haven’t changed their goals. 
  • It may help to show your clients how markets have fared during the worst 20-year periods they have ever experienced.

Words to use:
“I remain confident about your goals.”
“You have shared with me the things that matter to you. I’d like to walk through each one and reconfirm your priorities.”
“Let’s start with your needs, followed by your wants and then your wishes.”

A plan to approach every conversation
The four-box framework may look simple, but it can help you guide even the most complex conversations. 

A Client Conversation Framework consisting of a four-box grid advisors can use to guide client conversations. The top left box features the words 'Acknowledge: empathize, listen and identify'; the top right box features the words 'Perspective: Share and educate'; the bottom left box features the words 'Confidence: Prioritize client goals'; and the bottom right box features the words 'Opportunity: Give action steps”.

Step 4: OPPORTUNITY

 

Provide action steps.


Productive conversations often end with takeaways, new learnings or next steps to take. For financial professionals, this is the chance to guide clients to consider prudent and perhaps opportunistic financial moves. 

  • Depending on the economic or market environment, show why refinancing debt at lower interest rates, increasing 401(k) contributions to take advantage of lower equity prices, or simply consolidating various accounts to get a fuller picture of their financial situation may make sense.
  • Finally, stress the need for patience and prudence, and the importance of continuing to follow the plan that will allow them to achieve their goals. 

Words to use:
“We’ve designed a plan to stay with in good times and bad.”
“My role/responsibility is to share with you a few opportunities that are aligned with your goals.”

Four habits of great conversationalists


We tend to think of conversations as organic and improvised exchanges in breakrooms and cocktail parties. But while they may seem to lack tactics, the best conversationalists employ common techniques that make others feel heard and appreciated. Here are four habits of great conversationalists:

 

  • They listen more than they talk. As the saying goes, humans have two ears but only one mouth. Using them proportionally communicates concern and empathy. Be sure to actively listen. Pretending to listen and focusing on convincing others of your point of view are among the behaviors that most detract from trust.
  • They don’t make it about their experiences. Sharing episodes from your own life can be appropriate … but not always. People’s experiences feel unique to them. When we excessively draw comparisons to our own experiences, it can make people feel less understood.
  • They admit when they don’t know or understand something. In addition to making you credible, asking someone to explain or elaborate on something makes them feel heard and puts them in a position of power. 
  • They are truthful about what’s on their mind and open to difficult conversations. Advisors must strike a balance between acknowledging the very real challenges facing investors while instilling faith in the value of long-term investing. Validating anxiety while providing the context needed to move beyond it is crucial.

Our online Guide to market volatility has additional information and a variety of tools you can use to continue having productive conversations with your clients — just one of the ways we remain committed to supporting both you and your clients, today and in the future

headshot-Cieslik-Paul-PANC-Profile

Paul Cieslik is an advisor practice management consultant at Capital Group. He coaches and provides practice management consulting insights to top financial professionals, providing the motivation and mindset needed to build, strengthen and take a financial advisor’s practice to the next level. He has 32 years of investment industry experience and has been with Capital Group for 23 years. Earlier in his career at Capital, Paul was a wholesaler covering greater Boston. Prior to joining Capital, Paul was a regional manager for Lord, Abbett & Co., a financial consultant at Smith Barney and held various roles at John Hancock, including as an investment analyst. He holds a bachelor’s degree in business and economics from St. Anselm College. Paul is based in Sarasota, Florida.

Supporting materials

Four-box client conversation worksheet (PDF, 2.5 MB)
Four-box presentation slides (PDF, 2.5 MB)

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