Picture this: a long-time client storms into your office or sends a frantic email. “Get me out of the market. I can’t take this volatility anymore. Move everything to cash.”
It’s a scenario every advisor dreads. The client is scared, emotional, and potentially about to do real harm to their long-term financial plan. The instinct might be to jump in with data, reassurance, and reasons why staying invested is wise.
But if you’ve read The Psychology of Advice, you know better. Section 4 (the Application section) equips you with a consultative playbook designed for exactly this kind of moment. Instead of arguing or persuading, you help the client talk themselves out of the bad idea.
Here’s how it looks in action.
1. Understand the Context
Before giving advice, you have to understand what’s really driving the request.
Use open-ended questions like:
-
“What else is going on in your life right now?”
-
“What’s got you feeling this way right now?”
-
“What do you think triggered this for you?”
You’re not just looking for data here, you’re listening for fear, uncertainty, and psychological needs. Maybe the client just read a dire headline. Maybe they lost sleep worrying about tariffs going forward. Maybe they’re reliving 2008.
This is your cue to tune into Maslow’s Hierarchy of Needs. Clients stuck in safety mode can’t hear growth-based advice. If they feel threatened, they need security first. Don’t skip this step. Ground yourself in their emotional reality before doing anything else.
2. Break Down the Problem
Once you’ve established emotional footing, break the problem into pieces.
Ask:
-
“What does ‘get me out’ look like to you?”
-
“What exactly are you hoping to avoid or achieve?”
Maybe they’re not really looking to exit entirely. Maybe they want a buffer. Or just to feel in control.
This is where you separate their perceived problem (“the market is crashing!”) from the real problem (they don’t feel safe, or they’re overwhelmed by uncertainty). You’re not minimizing their fear, you’re clarifying it.
3. Consider the Impact
Now help them play out the consequences of their impulse.
-
“What happens if we do pull out now?”
-
“What’s the upside…and what’s the downside?”
-
“How will you feel if the market bounces back next month?”
You’re guiding them through a rational impact analysis, but it’s their own words and logic doing the heavy lifting. This taps into cognitive biases like loss aversion (they’ll feel the pain of missing a rebound) and status quo bias (staying put often feels safer once they’ve thought it through).
Let them see the fuller picture - one they may have been too panicked to consider. This is also where visual tools like upside/downside and the trusty T-chart help clients really see how things could play out.
(You might also want to show the data on portfolio impact of missing the market’s best days.)
4. Identify the Real Need
Now ask: “What do you really need right now? Reassurance? A plan? Liquidity?”
Often, clients confuse action with agency. Selling out feels like doing something. But what they actually need might be clarity, confidence, or a minor adjustment. After consideration, they may not feel the need for a total portfolio overhaul.
Use binary and open questions to explore:
-
“Do you need the money right now?”
-
“Is this about short-term fear or a long-term shift?”
-
“What’s changed for you in your life?”
If the facts don’t support the need to sell, and the desire stems from emotion, you’ve now clarified that the move may be unnecessary or premature.
5. Create and Refine Options
At this point, avoid going straight to the answer. Instead, present options.
-
“We could move everything to cash. We could also shift a portion to more conservative investments. Or we could stay the course and review again next month.”
This satisfies their need for control,while anchoring their thinking in a menu of reasonable actions.
Use framing techniques to set expectations, and visual listening tools (like drawing a T-chart of options) to make the situation more concrete.
Let them see what they’re choosing.
6. Share Advice at the Right Time
Only after you’ve done all of the above should you offer direct advice.
Even then, do it consultatively:
-
“If your goal is to protect principal without missing out on long-term growth, here’s what I’d suggest…”
-
“You said you’re most concerned about losing more. In that case, I’d recommend…”
This ties your advice directly to their stated needs - anchoring it in their values, not your judgment.
Remember: Helping sells; selling doesn’t help.
7. Get a Real Reaction
Before you assume they’re on board, check in.
-
“How does that feel to you?”
-
“What concerns do you still have?”
-
“What’s holding you back?”
This lets them voice lingering doubts and gives you a chance to address hesitation before it festers.
Encourage candor. You’re not trying to win; you’re trying to help them think clearly.
8. Generate a Durable Commitment
Finally, move from agreement to action.
-
“So what do you want to do next?”
-
“When do you want to revisit this conversation?”
-
“What should we watch for between now and then?”
Capture it visually on paper, on screen, and in your CRM. This creates accountability and a sense of partnership, which further reduces fear.
Final Thoughts: Help Them Be the Hero
You didn’t “convince” the client not to sell. You helped them convince themselves.
By following the consultative sequence in Section 4 of The Psychology of Advice, you helped the client move from panic to perspective - without pushing, lecturing, or rushing.
You used behavioral psychology as a map, helping them navigate their fear, examine their options, and arrive at a decision that aligns with their long-term goals.
That’s the heart of consultative advising.
And that’s how you help someone talk themselves out of a bad decision, while building trust that will last through the next crisis.