Financial advisors often double as therapists. As clients share their inner fears about money, the challenge is to uncover wise advice that sticks. But when clients are shaken to their core, counselors may struggle to offer words of comfort. The recent surge in job layoffs is a case in point. In 2022, tech companies cut more than 140,000 jobs. About 100,000 more tech workers have been laid off so far in 2023. While diligent advisors help clients plan for worst-case scenarios, layoffs still sting. Even if their advisor assures them that their rainy-day fund is sufficient to weather the storm, investors may find that the anxiety associated with a sudden job loss is difficult to overcome. News of layoffs tests the advisor-client relationship. If the counselor responds with a mix of compassion, empathy, and practicality, it can strengthen their bond. “It’s an advisor’s time to shine,” said Tim Melia, a Seattle-based certified financial planner. “That’s when you can really add value and earn your fee by stepping back, actively listening and letting the client express all the feelings” that initiates the layoff. When well-intentioned advisors learn of a client’s job loss, they may start lecturing on why there is no need to worry in the short term. It may seem like a good idea to tell clients to “stick with the plan” or to remind them that “we’ve built in safety devices” to absorb shocks like layoffs. But running through the numbers, at least at first, won’t resonate with a distracted client. “The value may not be in what the advisor has to say, but the advisor is there to listen to what the client has to say,” Melia said. He keeps a box of tissues within reach of the client and allows them to communicate. They may need to vent or otherwise talk about their personal concerns before they are ready to review their financial plan. “Layoffs can be very dark,” said Ryan Cassen, a certified financial planner in Blue Bell, Pa. So you have to handle the emotional side first.” Specifically, that means harnessing the power of silence. Counselors can signal their support by remaining silent as clients wrestle with what to say next. Cassen follows the 80/20 rule: He Try to limit conversation to 20% of the conversation so he can listen most of the time. “Don’t assume you know how they feel,” he said. “Let them tell you. Reflect their feelings in a caring tone.” “That must be hard to deal with,” as they dissect the events that led to their layoff, enabling them to elaborate, digress, or simply lament their misfortune. As opposed to rushing to share your experience or offer unsolicited advice. Avoid phrases like, “Yeah, when I went through something similar…” or “I’ve found that when things like this happen, I can bounce back…” Instead, attentive counselors listen to the patient, in a critical way Focuses on efforts to do so. “You’re asking the client to be vulnerable,” Cassen said. “Don’t talk over them. Just listen and be there for them.” After working through their feelings, clients are ready to talk about money. Do they have enough now? Do they need to rethink their spending habits? In many cases, Kasen will review their household budget. It can suggest ways in which they can reduce expenses as they seek to replenish their income. In retrospect, it helps to put the layoff into perspective. They can settle on it as a painful blow. But it encourages them to use the time to look at all their career options with fresh eyes. “They might say, ‘Today’s a really bad day. My life is terrible,'” he said. “I’ll say, ‘In terms of your whole life, that’s a small, challenging blip.'”
