Deep in the heart of busy season, probably the last thing on your mind is feeling empathy for your clients when they’ve been procrastinating and are so disorganized. But in an increasingly competitive business climate, if you’re not able to make a true connection with your clients, they could easily move to a more empathetic firm, even one lacking your experience and technical acumen.

The word “empathy” gets thrown around a lot these days, but quite simply empathy is the ability to see the world through someone else’s eyes, to walk in their shoes and to understand their emotions and connect with them on a deeper level — without judgement. When you do that, clients will feel like they are the most important person in your life. Don’t underestimate the power of empathy.

Taking it a step further, “financial empathy” is about understanding and recognizing the emotional impact that money issues have on someone’s life. It’s about understanding the story beneath the numbers. It’s about acknowledging that money problems can be incredibly stressful and anxiety-provoking for clients, which affects their overall sense of wellbeing. 

While financial empathy isn’t covered in most accounting curricula or CPE courses, high-performing CPAs are increasingly incorporating into their practices. Dr. Michael Thomas, a former auditor with a degree in accounting, now an author, TEDx speaker, and financial planning educator at the University of Georgia, told me on my podcast thatFinancial empathy incorporates the three elements of empathy: 1. Cognitive empathy;2. Affective empathy (i.e., emotional empathy); and,

3. Compassionate empathy. The goal, he said, is to move through understanding and emotional connection to reach a compassionate response.

Real-world example

David, a newly divorced business owner, was filing taxes alone for the first time as a single. His ex-wife had always handled their finances, leaving him overwhelmed by investment losses, business deductions, and estimated tax payments.

David’s conversation with his CPA began with: “I messed up, I should have known.” Using cognitive empathy, his accountant reassured him that many business owners face similar challenges, and he explained David’s tax situation in simple terms. With affective empathy (i.e., feeling the same emotion that another person is feeling), his CPA created a safe space for questions, validating David’s concerns without judgment. Through compassionate empathy, the CPA helped David create a tax plan that he fully understood. It was the first step in a holistic financial plan, giving the client peace of mind and a path toward financial stability.

By replacing shame with understanding, the CPA empowered David to take control of both his personal and business finances.

Benefits of being an empathetic CPA

• It helps you move clients away from financial shame toward vulnerability and openness.
• It enables clients to share complete information needed for effective financial planning.
• It builds lasting trust and long-term relationships.
• It creates mutual growth for both advisor and client.
• It allows money to serve as a conduit to a client’s authentic goals and joy.

Implementing financial empathy in your practice

• Financial empathy involves active listening beyond just hearing words —- understanding the interaction of communication and emotion.
• Financial empathy requires advisors, including CPAs, to self-regulate their own emotional responses while engaging with clients.
• Financial empathy slows down the process so you can hear clients’ needs more effectively.

“As advisors, we get so excited when we use our technical skills to solve a client’s problem, but clients don’t always see it that way” if it’s just numbers, formulas and regulations, Dr. Thomas noted. “Financial empathy is going through the process of understanding the emotional experience, so the client feels seen and feels heard,” he added. 

Thomas said that’s when the NURSE algorithm can be very impactful for accountants and other financial advisors: Name the thing. Understand it. Respect the experience. Support the individual. Explore solutions collaboratively with your client.

Let’s look at how the NURSE framework can help a business owner like David whom we met above:

• Name the thing. Acknowledge his feelings of overwhelm, uncertainty and difficulties of divorce. “David, it sounds like you are feeling overwhelmed and uncertain about your finances.”
• Understand it. Take the time to listen to your client’s concerns, their fear of making mistakes, confusion over investment losses, and anxiety about taxes, before offering solutions: “David, many people in your position feel the same way. Walk us through the situation and let us know what’s on your mind.”
• Respect the experience. Rather than focusing solely on technical fixes, recognize the emotional weight David feels about managing finances post-divorce. Often this is where advisors go immediately into problem-solving mode. Instead, take time to acknowledge your client’s feelings, before getting into the facts. “You’ve had a lot on your plate, David. Handling this alone for the first time is a big adjustment.”
• Support the individual. Create a safe, judgment-free space where your client feels comfortable asking questions, ensuring they fully understand their new tax obligations and how those obligations fit into their business operations: “David, you don’t need to have it all figured out today. That’s what we’re here for. We can break it down one step at a time.”
• Explore solutions collaboratively. Instead of simply prescribing a planning strategy, work with your client to develop a tax plan collaboratively — a plan they understand and feel confident implementing: “David, we’ve made great progress today, and now you have clear next steps for both your business and personal finances. This should give you a path toward greater peace of mind and financial confidence.”

By integrating financial empathy with structured guidance, David’s CPA helped him replace stress with confidence, ensuring he felt both clarity and control over his personal and business finances.

Still not convinced? Well, according to Dr. Thomas, there are four main risks for accountants and financial advisors who don’t develop their empathy skills and overall soft skills:

1. “Pseudo-empathetic response.” This is when advisors default to technical expertise when emotionally challenged.
2. Reverting to sympathy (“feeling bad that you feel bad”) rather than true empathy.
3. Forgetting that while you may be comfortable with numbers, clients may have an aversion to numbers and advanced math.
4. Rushing to solutions without understanding emotional context. That’s the evil Advice Monster at work.

As Dr. Thomas explained, all humans understand basic emotions like fear, even if contexts differ. Clients won’t share vulnerability unless they feel seen and heard. The empathy process can change you as much as the client. Technical solutions should not be delivered with emotional awareness.

Financial empathy isn’t about being overly emotional or sacrificing technical expertise; it’s about creating a framework for more effective client relationships. That’s why I originated the Advis-ROR methodology (Return on Relationships).  After all, isn’t that why you are your clients’ most trusted advisor?