Ask an advisor: How do I set boundaries with my bossy client?

Ask an advisor: How do I set boundaries with my pushy client?

May 13, 2024 3:53 PM

Financial advisors sometimes struggle with clients who push them to go beyond the purview of their profession.

Welcome back to "Ask an Advisor," the advice column where real financial professionals answer questions from real people. The topic can be anything in the world of finance, from retirement to taxes to wealth management — or even advice on advising.

Where does financial advice end and life advice begin? Since finance affects just about everything in life, it's a difficult line to draw.

More than once, "Ask an Advisor" has fielded questions from wealth managers struggling to set such boundaries with their clients. One found himself uneasily slipping into the role of marriage counselor. Another kept being asked to reassure his young clients about America's future — questions better suited to a political pundit or even a therapist.

Today's question is about an even more basic boundary: the line between advising on a decision and actually deciding. A certified financial planner in Pennsylvania is doing his best to advise a married couple on an important aspect of their retirement planning, but counsel and context are not enough for them. They want — and demand — to be told what to do.

How can this beleaguered advisor set limits? Or is that not the right approach? Here's what he wrote:

Dear advisors,

What do you do when a client demands advice on more than just finance?

My client, who is often indecisive, wants to downsize, but he and his wife can't decide which of two states to move to. He is now starting to push me to make the decision for him. I've told him that, while we can discuss the pros and cons, only he and his wife can choose where they live. My client has pushed back by saying, "That's what we're paying you for," and has even claimed I seemed to prefer state A over state B. This is not true — I don't care either way. But my client seems bent on drawing an opinion out of me.

What should I do? How can I respectfully set boundaries around my purview as a financial advisor, and decline to make decisions only my client can make?

Sincerely,

Perplexed in Pennsylvania

And here's what financial advisors wrote back:

Keep the ball in their court

Matt Bacon, CFP at

Carmichael Hill

in Gaithersburg, Maryland

We've gone through something similar with our clients. We lay out the financial ramifications of the decision for the client to see and render an opinion solely on that. Stress that there are many qualitative and nonfinancial aspects to the decisions as well; the conclusions from our analysis should not be the deciding factor.

Kick it back to the client to carefully weigh all pros and cons, and communicate that you can't help them any further than what you've done in making a decision.

Contextualize, don't control

Sarah Avila, CFP at

VLP Financial Advisors

in Vienna, Virginia

I agree that setting boundaries is important for clients. Regarding this situation, I would be somewhat diplomatic and communicate that you would be happy to discuss the financial pros and cons of moving to each state with regard to state income tax, property taxes, sales tax and overall cost of living (or a list of whatever specific financial factors you want to help them consider). You can let them know, however, that money matters are only part of the decision. They will have to determine how much they may enjoy living in one location versus another, based on their needs and preferences. Good Luck!

The big picture

Noah Damsky, chartered financial analyst and founder of

Marina Wealth Advisors

in Los Angeles

It's important for us to have an opinion and communicate with proper context. While we can't decide for a client which state to move to, we can help them understand some of the relevant factors to consider. It sounds like they could be focusing too narrowly and not looking at the big picture. I might approach the conversation with something like this:

"There are obviously many factors to consider, such as lifestyle, weather and proximity to family. Clients usually balance these with financial considerations, such as cost of living and taxes, among other things. I can tell you, from a financial perspective only, I think X state is going to be more cost-effective for you because income taxes are lower. Although property taxes are higher, you're going to rent, so income taxes will be more of a factor in your equation. This is only one small piece of the puzzle when you consider all factors, so weigh the importance of saving a few dollars in taxes with the lifestyle considerations that come with living there."

Draw it out

Megan Kopka, CFP and CEO of

Kopka Financial

in Wilmington, North Carolina

Personally and professionally, I don't have anything that is off the table for discussion with clients or friends. But I wouldn't accept being berated. That doesn't sound healthy.

That said, I think we advisors are useful in our forward-thinking and planning abilities, and this advisor should step up — as it sounds like they want to! However, I wouldn't decide for anyone either.

Making a four-quadrant chart of pros and cons may be helpful. Draw four boxes and fill them out — even if you have to interview each spouse separately. Label the boxes "State A: Finance," "State A: Personal," "State B: Finance" and "State B: Personal." Then do your homework on the details — state taxes, affordability of long term care, etc.

Clear the fog

Andrew Herzog, CFP at

The Watchman Group

in Plano, Texas

Use firm, specific language and lay out the pros and cons with all the necessary assumptions therein. Reemphasize that you cannot make lifestyle decisions for anyone. If you did, you as the advisor risk a situation where the clients are furious with a permanent decision like this and then blame you. Tell them that. Tell them you are able to offer the options and provide guidance, not an answer.

As far as the pros and cons list, list them out for each state but absolutely include as many assumptions as possible. For instance, State A has great weather, but also has a higher cost of living; so assuming you want to be physically active outside, assuming this lifestyle is more important to you than staying close to family, assuming the state doesn't increase taxes on you in the short-term, assuming the nursing facility stays in business, etc. The goal is to put the onus on them to think through the assumptions, reminding them the decision is based mostly on lifestyle assumptions, not financial ones. Help remove the fog around the decision. Your job as an advisor is to advise, recommend, suggest, not dictate.