Perspective :

Empathy is great, but compassion is even better.

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The other day I was reading this article about how empathy is super important for financial advisors to connect with their clients on an emotional level. And while I agree with the point, I feel our industry is overlooking a key component: compassion.

Empathy lets you understand and share clients’ emotions, but it falls short of providing actual help. Compassion, however, pushes you to ask yourself, “How can I help?” and take action to support your clients.

Understanding the distinction between empathy and compassion is essential for financial advisors looking to build strong relationships, provide exceptional service, and create a meaningful impact on clients’ lives.

Here’s how empathy and compassion can play out in real life situations:

  • Your client experiences a job loss.

Empathy: When you first hear about their situation, you might say, “I get it—this is a tough spot to be in, and it’s completely normal to feel anxious about your finances.”

Compassion:

    • Offer to review their budget with them and find ways to save or cut back on expenses
    • Talk about different ways they could manage their income, like unemployment benefits or emergency savings
    • Look at their long-term financial goals and adjust their plan if needed.
    • Share helpful resources for finding a new job or networking opportunities.
    • Provide emotional support and remind them that, with a solid plan, their finances can bounce back.
  • Your client is going through a divorce or separation.

Empathy: You listen attentively as your client shares their emotional turmoil and the complexities of their situation. You might express your empathy by saying, “I can understand how overwhelming this must be for you. It’s completely normal to feel uncertain about your financial future during this time.”

Compassion:

    • Offer to review and update their financial plan, factoring in changes from the divorce, like income, expenses, and assets.
    • Connect them with professionals, like divorce lawyers or mediators, to help them navigate the legal aspects.
    • Talk about financial strategies for managing alimony or child support payments and incorporate them into their overall plan
    • Give guidance on splitting assets, such as retirement accounts or real estate.
  • Your client has a serious health issue.

Empathy: You listen attentively as your client shares their fears and concerns about their health and the potential financial impact. You might say, “I’m so sorry to hear about your health issues. I can understand how worried you must be feeling right now.”

Compassion:

    • Review their health insurance coverage to ensure they understand their benefits and any out-of-pocket costs they might face.
    • Evaluate their disability insurance options and help them file a claim, if applicable.
    • Adjust their financial plan to account for changes in income or expenses resulting from their health issues.
    • Connect them with resources, such as support groups or financial assistance programs, to help alleviate some of their financial burdens.

Looking at these situations, you can see that while empathy is vital, compassion goes the extra mile.

Cultivating compassion as a financial advisor

Even though empathy might come more easily, compassion is something you can develop with practice. Here are some strategies to help you become a more compassionate advisor:

  • Reflect on past experiences: Analyze past client interactions where empathy was present but compassionate could have been stronger. Determine what actions you could have taken to be more compassionate.
  • Practice self-compassion: Genuine compassion starts with being compassionate towards yourself. Prioritize self-care, use positive self-talk, and focus on personal growth.
  • Check your intention: Put yourself in clients’ shoes before meetings and ask, “How can I best help this person?” to encourage a compassionate mindset.

Empathy alone won’t cut it.

Compassion drives you to provide tangible support for your clients’ need to overcome obstacles. By embracing compassion and taking deliberate action, you can make a meaningful difference in your clients’ lives and contribute to their long-term well-being. So, remember, empathy connects us, but compassion empowers us to create a lasting impact.

HERE ARE SOME PERSPECTIVES ON WHAT COMPASSION MEANS TO OUR ASSOCIATES:

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