Advising clients financially can be emotional business. A female-friendly advisor knows how to validate clients feelings while assisting them in making sound financial decisions. This is not an easy task, however, and a simple technique called the Wise Mind can help.
The Wise Mind Theory
The Wise Mind is a Buddhist theory that states all humans have two types of cognitions: rational thought and emotional thought. Rational thought is intellectual and based on scientific fact. Emotional thought is ruled by feelings and based on primitive physiological responses. The intersection of the two is called the Wise Mind.
According to this theory, the most prudent decisions are made when a person considers both his rational and emotional minds, and the balance between the two, or the Wise Mind, is used for the final analysis.
A great example of this approach in action was my work with Susan, an executive coaching client who was nearing retirement. One day she came into my office in a panic. The stock market had dropped significantly causing the value of her investment portfolio to dip substantially. Susan told me that she could no longer retire when she planned and she could not fund her grandchildrens college funds.
As I listened, I realized that Susan was a hundred percent in her emotional mind. I let her talk for a few more minutes and then politely interjected. I explained that her emotions were doing the talking and fueling her anxiety. Although her feelings provide important information to help her make decisions, I recommended that we work together to help Susan tap into her Wise Mind.
After describing the Wise Mind concept, Susan was able to identify that her emotional mind was screaming, I will lose everything and starve in retirement. When asked to check in with her rational mind, she discovered different thoughts: It is normal for the stock market to fluctuate and I have other ways to fund my grandchildrens college funds, such as selling real estate.
Once Susan tuned into both sides of her brain, she calmed down instantaneously. I then asked her to use both her emotional and rational minds to analyze this situation. She concluded that she was fearful about the decline in the value of her investment portfolio, but with the help of her financial advisor, she could evaluate her options and find an alternate plan. By using the Wise Mind technique, I coached Susan to find a balanced view of her circumstances so she could make a sound financial decision.
The Wise Mind Approach
Here are four simple steps to follow to help your clients tap into their Wise Minds:
1. Draw a Picture
Draw two large, overlapping circles on a blank piece of paper. Label one circle rational mind and the other emotional mind. Shade the intersecting area and label this the Wise Mind.
2. Teach the Wise Mind Concept
I have used this concept with executives, financial advisors, wealth managers, and estate attorneys and their clients with success. It is an easy theory to grasp, and it helps clients match words and a picture to their internal experience.
3. Identify Thoughts as Rational or Emotional
Ask your client to identify what type of thinking she is using and how far she is from her Wise Mind. Have the client put an x in the area that represents her type of thinking. This will suggest how entrenched your client is in her emotional or rational mind. For example, if your female client marks an x on the far side of the upper right quadrant, you know that she is firmly planted in her emotional mind.
4. Formulate a Wise Mind Analysis
Discuss the results with your client. Ask how her current thinking helps her deal with her financial dilemma and how it impedes her. Then ask your client what would need to change to tap into her Wise Mind. More often than not, the client suggests a brilliant idea and is able to use what shes learned to devise a Wise Mind thought that is helpful to your work.
This technique is simple but very effective in helping clients sift through the many emotions that surface in financial planning. The next time a client comes to a meeting upset, remember to ask her if she is in her Wise Mind. If not, then you know what to do.
Kathleen Burns Kingsbury is a wealth psychology expert, behavioral change specialist and author of several books including How to Give Financial Advice to Women: Attracting and Retaining High-Net-Worth Female Clients (McGraw-Hill, 2012). She is the founder of KBK Wealth Connection, a company dedicated to training, coaching, and consulting with financial services professionals to improve client communication, retention and profitability. In September, 2013, her newest book, How to Give Financial Advice to Couples: Balancing Her Needs with His will be published. For more information, visit kbkwealthconnection.com.