One of the most frustrating parts of providing financial planning advice is that not all clients follow through on the advice that is clearly ‘good’ for them. Of course, the reality is that as human beings, we often don’t take the advice proffered by others. But when a prospective client comes to the financial planner for advice, there is a reasonable expectation that they’re ready to act on the advice they receive! Except, as it turns out, research suggests that often the fact that we reach out to an advice-provider is not necessarily a reflection of our readiness to take the advice; instead, it is just one of many steps in a client’s progress through the stages of change from inaction and complacency to actually taking action to change their situation for the better! And by understanding the various stages of change, we can better understand the reasons why clients get stuck in the first place and engage the client in specific processes that help them move forward and make progress in implementing their financial plans.
Interestingly, of the six stages of change identified by psychologist James Proschaka and his team of researchers, only half of the stages actually involve any action steps towards implementing the change. The first three stages of change, where many clients tend to get stuck in following through on their financial plan, don’t involve any action at all. Instead, these ‘non-action’ stages involve self-reflection and emotional preparation to proceed with the change being considered, from Pre-Contemplation (where clients don’t even realize there’s a problem to contemplate fixing) to Contemplation (when they understand that a change is indeed necessary, and acknowledge that there is something they can do about it… but aren’t ready to do anything about it yet), to the third and last non-action stage, Preparation (where we begin to think about what needs to happen and will make plans to actually implement a change). Only at that point can the individual move on to the ‘action’ stages, which include taking action and maintaining the new behavior required to sustain the change.
Advisors can ask clients who seem to be having trouble taking action on their plans a set of four specific questions to understand where in the process they may be stuck: 1) whether the client can identify what they want to change; 2) if they know what they need to do to change; 3) if they believe they have the capacity to make the change, and; 4) if they are committed to begin taking action. Alternatively, advisors can use ‘scaling’ questions to determine the degree of commitment and/or interest to the change being considered and use their clients' responses as a way to adjust courses of action accordingly.
Furthermore, the Transtheoretical Model (TTM) of Change is a framework that identifies ten processes that can be used as tools to help clients move through the various stages of change. These processes are either experiential (dealing with experiences through thought and emotion and more often associated with addressing non-action stages) and include steps that help clients through the Pre-Contemplation stage (Consciousness-Raising, Environmental Reevaluation, and Dramatic Relief) or a mix of other stages (Self-Reevaluation, Social Liberation), or behavioral (involving the client actively taking steps to set the change in motion) and include Self-Liberation, Helping Relationships, Reinforcement Management, Counter Conditioning, and Stimulus Control.
One of the most important considerations when helping clients implement change is the concept of self-efficacy, which is an individual’s sense of their ability to take action in response to a situation. Ideally, advisors will use TTM tools to help clients increase their self-efficacy, whether it be through providing the client with ample opportunity to reflect on the meaning of the change that needs to be made, or simply supporting their efforts (and not necessarily pushing them to action, which can be counterproductive with a client not yet ready to take action).
Ultimately, the key point is that there are processes that advisors can use to help their clients move through the various stages of change, which can make it easier for them to work with those clients who may be stuck or resistant to take action. It is also important to understand that change involves behavioral ‘non-action’ stages and that clients may still be making significant progress even though nothing seems to be happening. By recognizing where clients are in the change process, advisors can decide how to provide the right kind of support to their clients to help them tackle their specific blocking points, and move along in getting on track with their financial plans!
When Clients Meet With Their Advisor But Aren’t Ready To Take Action On Their Financial Plan… Yet
When a new client seeks out a financial advisor, we might be inclined to assume that they are ready to make some changes and implement the advice recommendations they receive. Yet, research on change itself is quick to point out that there are actually six stages to making change… and only three of them involve actually taking action.
James Prochaska’s Six-Stage Process Of Change Offers Financial Advisors A Framework To Understand Why Clients Fail To Take Action
The “Process of Change” is a six-stage process that was developed by psychology researchers James Prochaska, John Norcross, and Carlo DiClemente, and well documented in their 1994 book, Changing For Good (which is an excellent read and worth picking up!).
The first three stages of the six-stage Process of Change, and where this article will focus, do not involve any change or action at all. They consist of three stages, as follows:
- Pre-Contemplation Stage: sometimes deemed the ‘denial’ stage; clients are unaware that a problem even exists and have no intention to change.
- Contemplation Stage: clients are aware that they have an issue and know that their behaviors (or lack thereof) have consequences affecting the issue; they typically have developed an intention to make a change.
- Preparation Stage: clients have clearly identified the issue and have placed making change as a high priority. They have started thinking about what it will take to make the change happen.
According to research carried out by Prochaska et al. that examined clients seeking services from mental health professionals, these three stages are where some 80% of clients tend to sit.
The next three stages of the six-stage process are the ‘action’ stages and consist of the following stages:
- Action Stage: clients take the plan that they were putting together in the preparation stage and actually set it in motion.
- Maintenance Stage: the change that was set in motion is now being kept in motion. Clients are working on turning new, changed behaviors into default behaviors.
- Termination Stage: more related to a mental health therapy setting for patients who seek help with a specific problem, this is the stage when patients feel they are ready to leave therapy and no longer need guidance from their therapist to make the change they initially sought to make, because the change is fully integrated into their lives (hopefully clients won’t leave the financial planning engagement after implementing a change, as financial plans ideally serve as lifelong road maps that require periodic adjustments along the way).
Prochaska’s research found that, at any given time around any given issue, only 20% of therapy clients are in one of these action stages. And this can apply to new financial planning clients, too, meaning that approximately 80% of new clients seeking out a financial advisor are typically not entirely ready to actually begin making changes, even though they may be the ones to seek out the meeting themselves! And, as frustrating as this may be for an advisor expecting their recommendations to be implemented, it is also totally normal.
Clients Who Seek Out Advice Aren’t Always Ready To Change – And How Financial Advisors Can Recognize When Their Clients Are Struggling With A Non-Action Stage Of Change
Since clients who have moved into the ‘action’ stages of change are probably not all that difficult to work with (as they are more likely to be in the process of completing tasks, learning, and implementing new skills), this article will focus on those clients who are in the first three stages of non-action.
Clients who have met with an advisor (maybe even on multiple occasions) but who are not implementing the changes proposed by the advisor may need encouragement and support to help them through their particular stage of change so that they can continue moving forward. And in order for advisors to offer effective encouragement and support, it can be very helpful for them to recognize which stage of change their client may be struggling with.
So what are clients doing if they are not taking steps to implement the financial plan developed for them and that they’ve agreed to follow? It ranges. Some clients may think the proposed changes are not a high priority and thus feel that immediate action is not necessary. Others may want to take action but don’t know how (or don’t feel ready) despite brainstorming for ideas on how to proceed.
What is important to understand is that the client who is stuck in one of the non-action stages (together with the advisor!) can easily spend as long as a year (if not longer!) without making any new progress.
For instance, if an advisor can recognize that the client is in the Pre-Contemplation stage, they will understand that the client does not yet have any intention of taking action toward a goal and that it may take as long as 6 months (or more?) before the client is willing to consider making a change.
Example 1: Darren, a brand-new client, has agreed to work with you, but only at the persistent request of his wife, Emily.
In fact, Darren is personally convinced he does not need a financial planner at all. He’s only here talking to a new advisor because of Emily and, in many ways, is in denial about the possibility that anything good will come out of the meeting.
Darren is in the Pre-Contemplation stage. He adamantly denies that he or Emily needs support. He has no plans to make any changes to his financial situation. He’s not even yet ready to contemplate actually making a change (thus, the “Pre-Contemplation” stage!).
Clients who have moved from the Pre-Contemplation stage to the Contemplation stage now recognize the change that needs to be made and understand that they need to take some level of responsibility to see that change happen. However, they still might not make any change for another six months (or more).
Example 2: Lena knows that she will not be able to meet her retirement goals if she continues to support her adult children. However, she is not yet ready to cut them off.
Lena wants to take time to think and discuss the issues. She recognizes what she needs to do and that it might be as simple as stopping easily identifiable behaviors, but she still needs time and support to build up to these ideas and take action on them because the decision to cut off her adult children weighs heavily on her as well.
This is a sign that Lena is in the Contemplation stage; she knows what she could do and believes it is important, but still is not ready to actually take action.
Individuals in the Preparation stage won’t actually do anything to implement the change yet, but they will make plans (i.e., they are Preparing!) to change. Clients generally stay in this stage for about a month.
Example 3: Tommy has had questions and ideas about saving since the dawn of his relationship with his advisor, which began over a year ago.
At first, while he was in the Pre-Contemplation stage, Tommy was not fully convinced he truly needed to save more. After all, he just got access to a 401(k) plan through his first job that he started a year ago, and only decided to meet with an advisor at the persistence of his mother.
Working together with you for a year, though, Tommy moved into the Contemplation stage and began to see the value in starting to save sooner, becoming very motivated to begin making contributions.
Tommy has struggled to make the lifestyle changes required to save at the level which his advisor has discussed with him, but recently indicated that he is expecting his next raise in just 30 days! As such, he is ready to move into the Preparation phase of making a change to consciously start saving for his future.
He and his advisor have agreed on a plan to save his extra money, and Tommy understands that, by setting up a monthly auto-deposit transaction to his 401(k), he will be saving money versus being tempted to spend it.
Moreover, the Preparation stage has given Tommy time to mentally process what it will actually mean to start saving money and to accept the plan he now has in place. Until that plan is actually implemented (in 30 days when he gets his raise), he technically will stay in the Preparation stage before moving on to the next action stage when he begins making savings contributions.
It’s likely that each of these scenarios sounds familiar to most advisors. As such, wouldn’t it be nice to know how to determine which stage of the change process the client is in, so you know what to expect (and how best to support them), versus guessing why nothing is happening and randomly learning why the client hasn’t done anything since the last meeting?
Finding out where clients are, whether they’re in one of the non-action or action stages, is pretty easy and can help advisors understand why their clients may be taking so long (or not) to follow the steps of their financial plan that were agreed upon so many months ago!
Four Questions To Ask Clients To Identify Where They May Be Stuck
One relatively easy way to figure out what stage a client may be running into resistance uses four specific open-ended questions suggested by Karen Miller-Kovach, the Chief Scientific Officer for Weight Watchers. Health goals are often excellent mirrors for how people think about and react to financial goals as there are salient parallels: “Sure I want to lose weight (save money), but right now I want to sip hot chocolate and eat churros (splurge on airline tickets to take a vacation), so I will start my diet (work on a budget) next month!”
The four questions that Miller-Kovach suggests using include the following:
- What would you like to have happen? Basically, this question identifies whether clients even realize that a change needs to take place. If the client responds negatively, that no change is needed – advisors can assume that the client is still in Pre-Contemplation; they do not yet recognize an issue exists and will not take action anytime in the near future. They may even never make progress without intervention (but don’t worry – we will get to intervention in the following sections). However, if they answer affirmatively that, yes, change is needed, then we know they are out of the Pre-Contemplation stage.
Example 4: During the plan presentation meeting with Darren from Example 1, the advisor recognized that Darren is still in the Pre-Contemplation stage and does not yet actually want help.
Darren did hand over financial statements and information which were needed to develop the plan, but he is not really interested in or ready to act on the results. For instance, while reviewing suggested changes to savings, Darren says he knows he doesn’t need to save more (although his bank accounts suggest otherwise) because he does not yet recognize that there is an issue with his budget.
Luckily, Darren’s advisor reads the Kitces blog and recognizes Darren’s resistance to change, knows that it is not his fault, and decides to stop the presentation to try a new approach.
He says, “Darren, thank you for your feedback. As you point out, there are many ways we can proceed from here, and with that being said, I am curious to know what you would like to have happen.”
Hopefully, Darren paints a picture of how he would be comfortable working together. Even if he doesn’t, though, his advisor will still come to realize early on in the process that this is going to be a tough relationship to get started (so keep reading to know what else can be done!).
- What needs to happen? With this question, advisors can potentially determine whether clients know what needs to happen and may even gauge their level of enthusiasm for seeing the issue through. If a client wants to change but has no idea how to make it happen (as they have not been planning to take action yet), this is likely a sign that they are in the Contemplation stage. They know taking action to make a change is important, but they either don’t know how to do it, or they don’t have enough interest to figure it out.
Example 5: During a meeting with Lena from Example 2, the advisor and Lena have been brainstorming ideas on how Lena might talk to her kids and start the cutting-off process. At each suggestion or idea from the advisor, Lena says, "I don’t know", "Maybe", or "Yeah, okay; I guess that could work".
Lena’s advisor senses that Lena has reservations. Yes, Lena is there brainstorming, but nothing seems to resonate with her just yet, and any signs of commitment to an idea are just not there.
Lena’s advisor decides to take a new approach and asks, “Lena, we have discussed a lot of ideas today. Tell me, what do you think needs to happen?”
Lena’s advisor is asking the ‘What needs to happen?’ question in a very open way. For instance, Lena could respond with her own plan signaling that she has a plan and is therefore in the Preparation stage. However, she could also answer with “I don’t know” or “I need more time”, in which case we know that Lena is still in the Contemplation stage.
- Can you? This question can help advisors assess how much planning the client has done, not just through behavioral steps taken, but also to the extent of emotional experiences and contemplation. When the advisor asks the client, “Can you?”, does the client answer by describing a plan of action? If so, this can confirm that the client is in the Contemplation and maybe even the Preparation stage. For instance, they may say yes they can, indicating that they are willing to brainstorm additional ideas and steps and have a desire to (eventually) take the first step which suggests that the client is in the Preparation stage. If they say ‘no’ or ‘I’m not sure yet’, the client is probably still in the Contemplation stage. The advisor may need to help the client determine if the issue is related to the plan itself or a personal issue that may be holding the client back. Like Lena from Example 2, who wants to save for her retirement but is not yet ready to stop supporting her adult children, some clients may have a plan but may not yet be emotionally ready to make a change.
Example 6: Continuing with Lena from Examples 2 and 5, after her advisor asks Lena the “What needs to happen?” question, Lena responds with a plan of her own.
Lena’s advisor responds, “Great; I think this is an excellent plan! As such, my question to you now is, ‘Can you?’” Lena’s advisor continues, “We have the plan, but now I want to ensure that you feel you have the tools to do it and are emotionally prepared to carry it out.”
Depending on how Lena answers here, the advisor can learn where Lena is in the change process and whether she is still in a non-action stage or if she is ready to move into an action stage.
If Lena says that she has the tools and is emotionally prepared, then great! She is ready to head into the Preparation or even the Action stage. If she says no, however, that is still okay, as the advisor would still learn what it is that Lena believes she needs to succeed in terms of tools and/or emotional support.
- Will you? This is a good question to determine if a client is ready to take action and move from the non-action stages into action stages in the near future. If they answer affirmatively, it is a good sign that they are in the Preparation stage – the final non-action stage. They know there is an issue, and they know what needs to happen. They are confident that they have the capacity to do what needs to be done and are emotionally prepared. The issue addresses when – not ‘if’ (as examined in the Pre-Contemplation stage) or ‘how’ (and examined in the Contemplation or Preparation stages) – they will take action.
Example 7: Tommy, from Example 3, is very excited to start saving. Thanks to the work with his advisor, Tommy believes saving is important, he has a plan to do it, and he has the confidence to make it happen. Everything is looking pretty good.
Before closing out the current meeting with Tommy, his advisor says, “Tommy, we have come a long way together, and you have made important strides; will you make the allocation changes as discussed?”
Tommy could respond in a few ways. He might simply say, “Of course – we have walked through what to do, I am good.” Or he could respond with, “I’ll try...”
The discussion is not to give the advisor an opportunity to judge Tommy; it is more about being able to gauge where he is in relation to making change (which is really, really hard to do).
Knowing where Tommy is, the advisor can choose to respond with, “Shoot me an email when you finish” (if it seems Tommy is on board to actually make the change). Or the advisor can say, “Call me if you get stuck” or “Call me, and we will do it together over video” (if it seems Tommy might not be fully committed and may need support in executing the action).
In other words, asking, “Will you?” is like closing a sales deal and asking, “Can I have your business?”. And closing out that commitment is key.
Asking these questions with clients can be done anytime behavior change is on the table. Thus, these questions can be appropriate in a meeting specifically about doing or changing something, or even in an initial meeting learning about the client’s current financial situation and goals.
Moreover, if clients answer these four questions affirmatively, it is a good indication that they are in the Preparation stage and ready to make “money moves”!
However, advisors should remember that even if they aren’t able to answer all four questions affirmatively, that is okay, too. As you will see, there are still steps that advisors can take to keep someone moving forward, even if they seem to be stuck in one of the first three non-action stages of the change process. These four questions can simply be used as a way to gauge a client’s readiness to move forward, so the advisors know whether it’s time for action or if more time is still needed to help the client get to the Preparation stage to be ready to actually take action!
How Scaling Questions Can Help Advisors Identify Clients’ Feelings About Change
If asking your clients the four questions provided by Miller-Kovach doesn’t sound like you, consider using scaling questions instead. Scaling questions are another tool that also helps advisors to uncover what clients are feeling in regard to change.
Example 8: Darren is meeting with his new financial advisor for the first time and has complained about how difficult it has been for him to develop a budget.
In an attempt to dig deeper into Darren’s resistance to take action, his advisor wants to identify where Darren is stuck. Their conversation goes as follows:
Advisor: Darren, since this is our first client-advisor meeting, I would like to ask you perhaps a bit of a different question than you might be expecting to help me get an understanding of where you are at in our work together.
Tell me, on a scale of 1 to 10, with 10 being ready to tackle new issues and work with our firm to potentially make changes to your financial habits, and 1 being there no need to make changes, where are you today?
Darren: I’m probably at about a 2. I’ve been thinking about how to start tracking my expenses because I think I might be spending too much. I just don’t want to spend a lot of time on it, and I don’t really know what I should do to get started.
From this answer, the advisor recognizes that Darren is not totally ready to make any sort of change and understands that coming in for this meeting was probably a big step for the client. While Darren’s response is low on the scale, the advisor knows that acknowledging the low value of his response won’t actually help bring about change and will instead probably just remind the client of all the reasons they’re struggling with changing.
Advisor: Thank you. So you feel you’re at a 2 right now? Please tell me why you feel you’re at a 2 – that suggests to me that you’re feeling something has changed or changing, is that right? For example, why didn’t you answer with a 1 or a 0?
Darren: Well, I am here, so that is a change, so I could not say 0…I am just not ready for more change right now. It is really hard for me to be here to talk about my finances.
From this conversation, the advisor recognizes that Darren will not be ready to commit to any significant changes related to financial planning and decides to focus the discussion on identifying why Darren has difficulty talking about his finances and areas of financial planning that Darren may be interested in understanding better, before suggesting that Darren make any dramatic changes to his financial situation.
As the example above illustrates, advisors can make appropriate adjustments to the planning process to fit the client’s needs depending on how the client answers these exploratory questions. Moreover, even if they don’t make progress for another 6 months, you can still see your own actions (actually identifying and addressing the stages that clients are in as they move through them) as the advisor, as progress nonetheless.
How Financial Advisors Can Use The Transtheoretical Model (TTM) Of Change To Help Clients Stuck In Non-Action Stages
The Process of Change is part of a larger theoretical framework called the Transtheoretical Model (TTM) of Change, which identifies how therapists can support change by outlining steps they can use at each stage when their patients are stuck. And fortunately, advisors can apply this same information to their clients, too!
For instance, the figure below shows how TTM organizes the first five stages of the change process (the sixth stage, Termination, is omitted; see the Nerd Note below) with the different steps that someone can use to assist someone in each stage.
The last stage, Termination (sometimes called Relapse, which involves reverting back to one’s old ways), is totally normal. Many charts and examples omit this step, perhaps because it simply isn’t fun to think that important change will be forgotten. However, it is really important to recognize that, although we don’t want to terminate the financial planning relationship, nor do we want to watch clients relapse (go back to their old ways), doing so is just as common as all of the other stages. In other words, it takes a lot of time and energy to implement a new habit that overrides a potentially easier but less helpful habit. If clients successfully make a positive change only to stop doing it, or if they don’t immediately recognize that more change is needed in perhaps another area of their plan, don’t be discouraged – it’s normal.
The Transtheoretical Model (TTM) Of Change Proposes Ten Steps That Can Be Followed To Successfully Move Through The Six Stages of Change
According to the Transtheoretical Model (TTM), a person generally needs different types of support at different stages of change, identified by the ten different ways (steps), to successfully move through each of the six stages in the change process. Advisors may find it helpful to consider what each of these steps involves and how they can be used to understand why clients may be stuck in a particular stage in the change process.
It is important to note that each of the ten steps can be categorized as either ‘experiential’ or ‘behavioral’. While experiential steps are often associated with the non-action phases (and they are, as the name suggests, designed to help clients experience issues through thought and emotion, rather than through taking action), behavioral steps involve action or consider behaviors that implement change. To illustrate these ideas, let’s consider some examples.
- Consciousness-Raising: Clients in the Pre-Contemplation stage do not think there is an issue. As such, the goal here is to increase awareness about the issue. In this step, advisors may help clients to learn new facts and discuss new ideas. In financial planning, this could relate to discussing portfolio diversification and common heuristics and biases that hold us back from wanting to diversify.
- Dramatic Relief: Again, for clients who are in the Pre-Contemplation stage, if they are not thinking about it, they are also probably not experiencing it emotionally. And in order to implement change, we need some level of emotional commitment to that change. This step encourages clients to experience some of the negative emotions associated with not In financial planning, this could be a visualization discussion where the client faces the idea that, unless they implement some change, they won’t get their desired outcome and how they feel about that.
- Environmental Reevaluation: While we want Pre-Contemplation stage clients to think about themselves, we also want them to think about others (social reappraisal). Advisors in this step may help clients consider who else might be impacted by a decision. For instance, children learn money behavior from their parents; as such, how will children be impacted by their parents taking action (or not)?
- Self-Reevaluation: Moving out of the Pre-Contemplation stage to the Contemplation and Preparation stages is where the client will experience some self-reappraisal. Said another way, changing is part of a person’s identity, and when there is resistance to change, the client is encouraged to express that they may feel disappointed in themselves. In financial planning, this can be working with the advisor to realize that financial goals represent deeper, larger life goals or morals and, therefore, they are too important not to do; not doing them would feel awful for the client.
- Social Liberation: Clients in all stages can use this step. Social liberation is the recognition that there are parts of society that support the positive change the client is trying to implement. In financial planning, advisors can help their clients see that they are part of a larger network of clients, all committed to changing financial behaviors and becoming better with their finances. An advisor might frame this to the client by pointing out that there is a financial health movement, there are many things about the world we live in that support this movement, and that the client can join in! Which, advisors may want to acknowledge, was maybe not how the client felt before. For example, they may want to point out that while social media was once viewed as a source of temptation that made the client want to overspend, different channels in social media now serve as reminders for the client that make them proud that they are saving their money, instead. The point is that we see what we want to see, and seeing the things that support the change is key.
- Self-Liberation: This step is very useful in the Preparation and Action stages; it is all about making commitments. In financial planning, advisors can work with clients to set goals and reinforce and support their commitment to those goals.
- Counter Conditioning: Found predominately in the Action and Maintenance stages, this is the process by which the client actually substitutes healthy behaviors for negative behaviors. New habits take practice and effort, and Counter Conditioning, in many ways, is a reflection of how that effort happens in real time. In financial planning, this can be seen in clients who make behavioral changes, such as replacing going out to eat for lunch with brown-bagging the special made at home.
- Stimulus Control: Similar to Counter Conditioning, this process is often a mix of physical and emotional re-engineering. Stimulus Control involves removing reminders and cues related to unhealthy behavior and replacing them with reminders and cues for healthy behavior. In financial planning, this could be a simple brainstorming exercise, thinking of when it is tough to resist the old habit and then putting some healthy reminders around it. For example, the client can place a note at the computer, where one is often tempted to empty the Amazon cart after a long day, that says, “You have had a long day, have some ice cream and be proud of the fact you are saving for X”.
- Reinforcement Management: This process is huge for the Action and Maintenance stages. Basically, people need feedback when making changes. Advisors can do this in two ways. One, they can tell clients when they are doing well (e.g., congratulating them on a goal or sending an extra status report now and again when a new milestone has been reached); and two, they can tell clients that they know when they are not doing so well. Telling clients you know when they are not doing well, though, can be nuanced. This is not a lecture; instead, this is telling them that you know they are capable of more, that you see they have not yet met a goal that they established was important to them, and that you are here to help.
- Helping Relationships: This step is also important in the Action and Maintenance stages and is about seeing and using social support for healthy behavior change. A trick to this one, as far as financial planning goes, is that the financial planner is not (and likely should not be) the only help. For instance, enlist a spouse or a family member to commit to the same savings goals.
How Decisional Balance Impacts Change
Another important activity/tool that happens as part of the TTM framework is decisional balance. Decisional balance is the process of creating that pro/con list that nearly everyone puts together, whether they do it consciously or subconsciously (or both!) when trying to make a decision, especially when making a change is involved. You might be thinking, “Well, if everyone does it already, why do we need to bring it up? It happens naturally enough, right?” And while that is true to some degree – yes, people make pro/con lists all the time – lists can be (and often are) heavily skewed toward whatever side does not involve changing!
Basically, when one is confronted with change, there is very often a time when they will feel ambivalent about actually making the change (or do not even acknowledge that change is necessary). As such, decisional balance lists are often crucial in deciding whether to commit to a plan of action. Thus, when the advisor can be a part of the decisional balance process, they can help the client to avoid unfair biases and to see the issue more objectively, shifting the client toward changes that will be important in helping the client stick to a plan of action.
An easy way to actually address decisional balance is to ask something like, “Could you tell me more about what you get out of doing X that is so positive, and perhaps what some of the negative points about it are?” Answers to these open-ended questions provide the client, who may not have really actively thought about their decision, with a new perspective on their own thought process.
And, as will be illustrated in further examples given later, decisional balance gives useful information to the advisor. The advisor now knows more about some of the positive considerations a client has about their plan and may be able to more easily identify ways to enhance those positive aspects. At the same time, the advisor has also gleaned some of the less positive factors and can work with the client to find ways to avoid negative experiences in executing the plan.
Helping Clients Develop A Sense Of Self-Efficacy Can Be The Key In Getting Them On Track With Their Financial Plan
Last but not least, self-efficacy is another concept presented by TTM as a process for addressing ambivalence and resistance to change. It is yet another TTM tool that helps the advisor to work with clients once they have identified the stages of change their client may be in.
Self-efficacy is, in many ways, one of the most important considerations to effect change, relating back to that “Can you?” question. It is a concept that was developed by psychologist Albert Bandura that relates to an individual’s sense of how well they believe they can take action to deal with certain situations. In the TTM framework, self-efficacy plays an important role not just in the Self-Reevaluation step (when the client realizes that change is an important part of their identity) but also in the Self-Liberation step (when a client makes a firm commitment to the change).
Advisors and clients can develop great plans, but if the client doesn’t have sufficient self-efficacy (i.e., they don’t believe they actually have the ability to do the plan), the plan may never actually get done.
Example 9: Barb is a newer client; she is a recent divorcee with three kids. Barb has been working with her advisor to identify some retirement goals and to put a corresponding plan in action.
Barb has been great about providing paperwork to her advisor (handing over old tax returns, employment benefits paperwork, account statements) and even excitedly participates in the discussions about her new, re-envisioned future retirement. However, her advisor also notices that none of the actual action items, like updating beneficiary forms to remove her now-ex-husband, are getting done.
In the above example, Barb is stuck! She isn’t going to leave the Preparation stage and move to the Action stage until she believes she can. Perhaps emotionally, she cannot yet bring herself to truly separate from her ex-husband. Using the different processes in TTM, Barb may need to use a mix of steps, such as Self-Reevaluation (she is no longer married), Social Liberation (being single can be fun or exciting), Self-Liberation (she is confident as a single person able to be who she wants), and Helping Relationships, as just a few examples. Said another way, it is one thing for Barb’s advisor to know that she is stuck in the Preparation stage; it is another for the advisor to know what to do to help Barb increase her self-efficacy and recognize she is indeed capable of change.
The advisor may need to take on the role of teacher, supporter, and friend to help clients develop confidence and bolster feelings of self-efficacy – and to help clients believe they can actually carry out the plans that have been developed!
Financial Advisors Are Primed To Help Their Clients Achieve Social Liberation And To Move Through The Non-Action Stages Of Change
Now that we’ve discussed how TTM organizes the Stages of Change and the steps needed to move through each stage let’s take a deeper look at some examples showing how TTM can be used with clients who are stuck in the three non-action stages – Precontemplation, Contemplation, and Preparation – of the change process.
It can be really empowering for advisors and clients alike to know that, even though no behavioral changes have yet been made, there are many things the client is already experiencing that are necessary to drive the change, as change only happens when we are emotionally activated to make it.
So how do we implement TTM to help clients move through the stages of the change process? First, consider which stage they are in.
How Ample Reflection Helps Clients Employ Various Experiential Steps In The Pre-Contemplation Stage
Clients in the Pre-Contemplation stage will benefit from lots of reflection in a safe space so that they can do their own Consciousness Raising, Environmental Re-Evaluation, and Dramatic Relief, which are all experiential steps. In one way or another, each of these involves the realization that, without change, things won’t get better (and could very well get worse!).
It is important to note that this does not need to involve subjecting clients to ‘doom and gloom’ sessions – we are not suggesting that advisors use ‘fire and brimstone’ with clients, nor should they use fear tactics to scare or guilt them into change!
Instead, advisor-client collaborations should involve a lot of statements that accommodate reflection because when we reflect on what has just been said and trust that we are in a safe environment to share positive insights, consciousness-raising can support the idea that change can be both useful and healthy. Which is important to help the client move out of the Pre-Contemplation stage, as accepting the idea that change needs to happen can be scary and often emotional, even when we know the change is good.
Example 6: The advisor working with Darren in Examples 1, 4, and 5 recognizes that Darren, being in the Pre-Contemplation stage, is struggling to discuss his finances and is not ready to commit to change.
Further, Darren’s advisor knows that his client is feeling resistance against moving out of the Pre-Contemplation stage, so he decides to help Darren with consciousness-raising.
The advisor has the following conversation with Darren:
Advisor: I hear you saying that being here today and opening up about finances is a change for you. I appreciate that you made it to the office to meet with me.
Tell me, what are some of the positive benefits you hope to glean from being here and opening up? What are some potential negatives that you see?
Here, the advisor is acknowledging the steps that Darren has already made toward change, which will help lead Darren to his own consciousness-raising. Furthermore, by asking about positive benefits and potential negatives, the advisor is asking the client to engage in decisional balance.
Darren: Okay, I know that I need to save more. I do. I know I need to make a change.
Advisor: I am hearing you say that saving more is a behavior you want to work towards. Tell me more about why that is important to you.
Here, the advisor is working on more consciousness-raising, learning new facts that will help him understand how to support Darren make positive changes.
Darren: Yes, I want to save. I want to be able to retire and for my kids not having to worry about me.
Advisor: Thank you for sharing that with me, Darren. Just to paraphrase, saving for you is about taking care of yourself, but also the ability to unburden your children. Is that right?
By emphasizing how Darren considers the impact of his financial situation on his children, the advisor is encouraging him to engage in Environmental Reevaluation to help him understand the impact of his behavior and choices on his kids. The advisor is also leading Darren through the Dramatic Relief step by connecting the negative emotions he mentioned (the feelings associated with making his kids worry) with the struggle he has had to save.
Darren: Yes, I really, really worry about my parents, and I don’t want to give my kids the same stress my parents have given me. I know I need to change, but this is all just really hard.
Note that in the example above, Darren’s advisor isn’t trying to push him to take action; he is just asking him clarifying questions. As the advisor recognized in Example 1, Darren may not yet be ready to make a behavioral change, but coming to the office indicates that some sort of change is desired and that this first action could lead to more of those changes eventually being implemented.
By understanding where the client is in the change process and giving them a safe space to wade through the experiential steps, advisors can help their clients move through their own process more comfortably.
It is also worth noting that these examples illustrate conversations that take place during only one meeting with each client but are set up for illustrative purposes only; in reality, these conversations will more likely take place over several meetings, though the process remains the same.
Advisor’s Role In Supporting Self-Efficacy In The Contemplation Stage
Clients in the Contemplation stage are going to need to have developed a sense of self-efficacy to move into the Preparation stage, which they can achieve through the Self-Reevaluation step (where clients realize that making a change, whatever that change may be, is a part of who they are and that they are capable of following through).
Moreover, clients in the Contemplation stage are aware of the issue and are now giving serious thought to the potential challenges they may face making the change… which includes belief in their own ability.
The main role for advisors whose clients are in the Contemplation stage is to support their clients in believing in themselves, though not necessarily to jump to requiring actions or pushing behavior (although it will be tempting!).
It’s important to recognize that the Contemplation stage is still just a thinking stage; it’s a non-action stage that doesn’t involve change… yet. The key is getting the client to the point that they are ready to take action… because they believe that they’ll succeed if they do (as they certainly won’t feel motivated to take action if they don’t think the outcome will be favorable anyway!).
Example 7: Lena, from Example 2, is in the Contemplation stage and has been thinking about her retirement goals. She knows that change is on the table if she ever wants to realize those goals.
She recognizes that the biggest change she needs to make is to cut off her two adult children. She knows that she has been enabling her kids and that her behavior benefits neither herself nor her children.
In a recent meeting with her advisor, Lena had the following conversation, which left her feeling more confident about herself and able to see the change she wants to make as a positive part of her identity.
Lena: I know I need to change and that current circumstances are bad for both my kids and me, but I also really, really worry about the fallout this could cause! I have myself half-convinced to go forward, and half-convinced it is just not worth the fight.
Advisor: Lena, thank you for sharing how you are feeling. It is normal to feel ambivalence when considering a big change – this is hard, and you have changed so much already. I really congratulate you on how much time you have spent contemplating this work, your finances, and your relationships. It is not easy to face this, but you are doing it.
Here, the advisor is complementing Lena and helping her to see that she has the power to change already within her.
Advisor: In fact, I want to ask you something because I know this isn’t the first time you have made difficult changes. What did you do in the past to make it through those changes?
Lena: Hmmm… a few years ago, I quit smoking. That was horrible! Ha! I think in some ways, it was almost as hard on my kids, too, as I was a real monster there for a while. But now I am better for it. I’m healthier, and so are the kids. I really didn’t want to quit. I liked smoking, but I did it anyway because I knew quitting was better for me.
Advisor: That’s a great example. Tell me more about how you handled the days that were really hard for you – when you became a monster, as you put it?
Lena: Well, I remember that I started each day during that time with a mantra. I told myself, “You can make it for an hour”. And each hour, I would say it again and again.
Advisor: If I were to paraphrase, what you are saying is that when things were hard and you felt like you wanted to quit, you set smaller goals that were more manageable.
Lena: Yeah. I guess. Each hour.
Advisor: Well…if I may, we can do the same when it comes to the children. We can set smaller goals if that feels more comfortable for you and slowly stop the financial support over time.
Lena: Yes. Actually, I think that would help a lot. I have been thinking just one day I would start saying no, but you are right. Maybe just small adjustments can get me to the same place without feeling so abrupt and unmanageable for the kids and me.
In Example 7 above, Lena was in the Contemplation stage and still needed a plan which her advisor determined would need to be broken down into small goals involving manageable action items for Lena. However, Lena still is not quite ready to move into the Preparation stage.
By contrast, Tommy, from Example 3, is fully in the Preparation stage as he does have a plan. In the next example, we can see where and why self-efficacy is key.
Example 8: Tommy knows that his next paycheck will include the raise he has been waiting for, and he is excited, but he is also a bit nervous. What if, as he is making the changes, he comes across a question or an issue?
In anticipation of the change, Tommy calls his advisor to ask if they can actually walk through it all together via a Zoom meeting next week. Their conversation goes like this:
Tommy: I know we have discussed what I am doing, but I am still a bit nervous. I realize I haven’t spent a lot of time actually looking at my benefits. I am not even sure how my current portfolio is invested, and if the allocation I have is right for me. Would it be possible for us to go through the sign-up process together?
Advisor: Tommy, no problem. In fact, I am really glad you called and requested we go through it together. I know you feel nervous, but, to me, the fact that you want to engage and learn about how your portfolio is invested is very different from our initial meetings together. You have not only made a commitment to change behavior; you have become interested and engaged in your financial life. This is awesome, and I am happy to be a part of it.
Tommy’s advisor is reinforcing and reflecting back on all of the positive work and how hard that was to give Tommy greater support for what he intends to do next. Tommy’s advisor is reminding Tommy that ‘changing’ and ‘doing’ are already things Tommy has shown he can do, and by reminding Tommy of this, he is enhancing Tommy’s self-efficacy. The advisor is not reminding Tommy of what they, the advisor, did but of how Tommy has manifested and climbed to this moment.
Tommy: Thanks, I hadn’t thought about it like that, but you are right. I think through this process, I have gained confidence and see myself as having the ability to make informed financial decisions. It feels good.
Because Tommy has moved into the Preparation stage, he is mentally ready to take action but still feeling uncertain about what the forthcoming changes will actually mean. By giving Tommy a little encouragement and support, the advisor has helped Tommy develop a sense of self-efficacy and boosted his confidence, making it easier to move into the next stage of change.
Tommy now realizes that being actively involved in financial decisions and understanding financial information is now a part of who he is, which will likely make any future changes much easier for him to make.
How Advisors Can Use The Power Of Social Liberation To Support Clients In Making Healthy Changes
The final experiential step advisors can use to help their clients effect positive change involves the power of Social Liberation. This is a cool step that can work really well with activities the advisor can incorporate into their practice.
Basically, humans are social creatures, and joining the bandwagon is what we are naturally primed to do. Accordingly, advisors can plan “financial change” events that can be set up as recurring functions that are exciting and fun to celebrate change and recognize how important it is to work toward financial goals and have financial freedom. By supporting events and activities that normalize healthy financial behaviors, advisors can help clients to accept the change process as a positive part of their identities and to implement the actions outlined by their plans.
Programs such as those created by Dave Ramsey use this step effectively, too. As just one example, Dave Ramsey offers courses that implement a group savings goal. Each person contributes to the group goal and not just to their own individual goals. With this approach, people are motivated to participate and contribute savings because they don’t just care about their own goal but, because they want to create a positive social support system, they are also very willing to contribute for the benefit of their group members, too!
Money is often a very private affair and considered by many as something not to boast about. Thus, it is no surprise that clients struggle to talk about it, let alone talk about it enough to set goals, make a change, and set new goals.
Further, in some ways, just being comfortable talking about money and realizing that change needs to happen… is change, in and of itself! It can be hard to be patient or understand why someone would come to your office and then not want to do the work, but this is actually very normal.
Moreover, helping clients to learn to talk about money and to set goals is a big deal. Once they set those goals, have a plan, and implement the necessary changes, let your clients know that you, their advisor, see it and admire it! An important aspect of being a coach for your clients is to give them sincere compliments, letting them know that you recognize how they have changed, that you are proud of them, and that they should also take pride in what they’ve built and the healthy financial decisions that they’ve made.
And by acknowledging their progress, advisors can help clients to develop a sense of financial self-efficacy that will be important for keeping good changes going and maybe even tackling new and bigger projects in the future!
Laura Scharr says
Good article. My coaching training through Co-Active institute has a similar but even simpler exercise for helping clients when they are stuck based on neuroscience. It can take even one session. The key is to get the client to think outside of their regular pattern of thinking by exploring (in a very creative way) different perspectives around a topic and then to choose the most resonant one. This helps the client to rewire the brain and then we have them pick a few To Be’s and To do’s around that new perspective to set the new pattern in motion. Super powerful and very effective. Financial coaching can be a great way to get clients unstuck. The psychological barriers are where clients most often have the most issues.