Derek Hagen, CFA, CFP®, FBS®, CFT™
“You don’t have to have cancer to be an oncologist.”
-Seth Godin
When we talk about the emotional side of money and communication skills, it’s common to assume that empathy and sympathy are the same thing. Many people believe that empathizing with a client means feeling sorry for them or wishing they didn’t have to experience their struggles. But empathy isn’t the same as sympathy. Empathy is about understanding how someone arrived at their particular worldview. It’s about seeing the world through their eyes.
With that in mind, another common misconception is that we can only empathize with someone if we’ve had the same experience. A younger advisor might wonder if they can truly understand a retiree’s perspective when they’re decades away from retirement. Or a new advisor managing student loan debt might feel disconnected from a client with an eight-figure net worth.
But empathy doesn’t require us to have lived the same experience as our clients.
Shared Experience and Empathy
To truly understand empathy, we need to understand why people do what they do. Every action has an underlying motivation. Motivation is the why behind behavior. Nobody is ever truly unmotivated—if it seems like they are, it simply means they are more strongly motivated by something else. And what motivates people is shaped by their experiences.
Financial psychology pioneers Ted Klontz and Rick Kahler often say that every behavior—no matter how irrational it seems—makes perfect sense when you understand the underlying reason for it.
This is why it can be easier to empathize with someone when we’ve had a similar experience. We’ve “walked in their shoes,” so we intuitively understand their emotions and decision-making process.
But there are two key pitfalls to avoid:
- Assuming we know what someone is going through just because we’ve had a similar experience. Even if we’ve been through something comparable, their interpretation of the event may be different from ours.
- Believing we can’t empathize at all if we haven’t experienced the same situation. This is what leads advisors to think that they can’t understand the struggles of high-net-worth individuals or retirees if they haven’t been in those positions themselves.
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Empathy Through Understanding
The truth is, we don’t need to share the same experience to understand someone’s perspective. A doctor doesn’t have to have had cancer to be an oncologist. A grief counselor doesn’t need to have personally suffered the same loss as their client to be effective. As Seth Godin says, “You don’t have to have cancer to be an oncologist.”
Empathy isn’t about experiencing the same struggles as our clients—it’s about understanding their frame of reference. It’s about recognizing that if we had lived their experiences, we might see the world the way they do.
As advisors, we don’t need to agree with our clients, and we’re not there to sympathize. Our role is to understand their perspective so they feel truly heard. When clients feel understood, they’re more likely to trust us, engage in deeper conversations, and take meaningful action.
Empathy isn’t about knowing exactly what it’s like to be in their shoes—it’s about listening, understanding, and guiding them forward.
Want to Learn More?
Money Quotient trains financial professionals in the True Wealth process and helps them implement the concepts into their practices. The first step is to learn about the Fundamentals of True Wealth Planning.
References and Influences
Gillihan, Seth: Mindful Cognitive Behavioral Therapy
Hefferon, Kate & Ilona Boniwell: Positive Psychology
Klontz, Brad, Rick Kahler & Ted Klontz: Facilitating Financial Health
Miller, William: Listening Well
Miller, William & Stephen Rollnick: Motivational Interviewing
Newcomb, Sarah: Loaded
Rosenberg, Marshall: Nonviolent Communication
Wallace, David Foster: This is Water