Shaming or Empathy – What’s The Right Approach For Financial Advice?

Advisor October 28, 2020

Who hasn’t made mistakes in life! Whether it’s to decide about complicated relationships or handling loans and finances, everyone has that occasional slip. And even though you might overcome relationship setbacks, financial blunders can often be very difficult to recover from.

But it’s not like we don’t try to get things right. We seek advice from experts. But do you know what the real problem is? It’s that sometimes, even financial experts get things wrong. They keep relying on traditional strategies when there are better approaches out there. And that can make all the difference in your personal financial management.

Unsplash | Financial advisors often make mistakes when suggesting money management methods to people

Today, let’s try to uncover some of the common judgment errors financial experts make and try to see if there are better solutions to typical problems.

Error – Shaming

Financial experts often dish out advice by making you feel bad about yourself. They shame you for not being able to manage your finances and criticize your choices of investments. But, is this approach correct?

In our opinion, no, it’s not! It seems the professionals overlook the shifting financial landscape before all the blame game. What about the rapid increase in home prices, child care costs, and medical bills? On top of it, the failing economy has created a situation of income inconsistency across the world, and the COVID-19 crisis is just the cherry on the top. Now, with all these issues, isn’t financial crunch a much-expected outcome?

It’s high time the gurus of finance realize that shaming people for their decisions isn’t going to work. It must be understood that people are looking for a solution. Things won’t get better until the right measures are taken. Shaming will reduce the willingness of taking actions and rather increase fear.

Unsplash | For years, personal finance management has relied on shaming, but the times have changed

Read – 10 Strategies That Will Help You Deal With Financial Crises

Solution – Empathy

Now the question is – if shaming doesn’t help, what does? The answer is ‘empathy.’ Empathy can make a person accept a crisis and help to act on it correctly. This realistic and adaptive approach can bring long-term behavioral changes. It can create a mindset where an individual is motivated to solve the problem once and for all.

No, we aren’t suggesting you abandon financial education or advising. Empathy is totally different from apathy. But this can be a new model which can help a majority of people to take control of the situation and not give up. It can revolve around making people understand their finances while considering their emotions and other circumstances.

This model works because judgment or assumption isn’t involved. It’s just about helping out people emotionally as well as logically.

Unsplash | People today need advisors with empathy, who can understand their problems and suggest solutions

Read – 6 Steps That Will Help You Choose Your Financial Expert

Wrapping it up

We understand it’s challenging to come out of a financial crunch that seems to be never-ending. But trust us; you can make it through with the right approach. Empathy over shaming can help in building a person’s confidence and trust. It can help them deal with situations better.