Troubled Economy – Don’t Ignore Problems

Some of us remember quite clearly the economic collapse of the 1980s. We all need to recognize that we are facing a similar time. Some of our clients, friends and maybe we personally could face some huge financial issues. What knowledge might be timely?

One of the most helpful concepts that I learned from previous bad times was the “Four Stages of Grieving.” Most people who experience severe financial stress go through the grieving process. These are emotions that experts tell us typically occur with a death, divorce, severe illness or huge family problem.

These financial “Four Stages of Grieving” include the following:

  1.  To Ignore: Go to work every day and fail to deal with your growing problems. It isn’t happening to me!…or…it will get better with time!
  2.  Become bitter and belligerent: This is when people tend to blame others. They strike out at brokers, bankers, partners, sometimes even family, friends and their God.
  3. Depression: Many fall into despair and it is very difficult for them to do anything. Sometimes in this stage one can take advantage of the person. Poor decisions are made because they are hoping for miracles. In the worst cases, it could take a doctor’s medication to get someone through this stage successfully.
  4. Acceptance: This is required before sensible decision making occurs. People have to move forward. They have to accept the consequences and circumstances of the market alternatives that have been given to them.

If you have a client with major trouble, your counseling skills will be fully tested. If you don’t counsel correctly, you probably won’t accomplish anything. Your client will be very frustrated and you could waste valuable time because you didn’t understand the scope of the situation. If you are successful you will gain great satisfaction for helping someone who truly needed your service.

Tips for the Broker:

  • You must get your client to open up about his entire financial situation. He may come to you trying to sell a specific stressed property but the solution may be within other assets or talents. You need to know everything!
  • If you find out the client is deeply in financial stress then tell them not to feel alone. If you study any economic crisis early on, there seem to always be some high-profile suicides. Sometimes people go directly to Stage 3 and can’t handle it. It usually helps when they find out others are in the same boat and you are an understanding associate that listens.
  • If their comments are…”I feel so bad”…”No one understands how hard I have tried”…”the market will come back soon”…”That banker is an SOB!” or…? These are hints to which stage your client is in. I have found it helpful to explain the Four Stages of Grief. Let them know that the grief they are experiencing is natural. This sometimes helps. 
  • Realize that you have a difficult client and will probably never consummate a transaction unless you are willing to counsel them through their situation. Understand that a stressed client vacillates between stages. Be extremely understanding and listen intently.
  • It may be necessary to involve family members or others they trust. Present possible solutions in a clear and concise manner. Always compare your proposed solution to the alternative, which is inaction. Make them see any adverse consequences from inaction.
  • Look out for your own compensation. When it comes to saving assets for the client, the broker will not be the first in line if there is less to go around than expected. Sometimes lenders and creditors are very willing to make sure the broker gets paid in full to resolve a bad situation. Be creative!

In summary, we are in some very difficult times. No one seems to know what will happen next. Economic disruption of this magnitude will give us the opportunity to serve. Are we willing to learn the skills to be successful?

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