When an advisor has to deliver some bad news to a client

While a gym workout can be a lot of fun, the cliche “no pain, no gain” is also true. The same goes with finances. Savers and investors who want secure financial futures tomorrow often have to face painful financial facts today — and it can fall to financial advisors to point them out.

In fact, that’s their job. From cutting back expenses to cutting loose bad actors, financial health sometimes requires a little prudent pruning, with professional help.

We asked eight members of the CNBC Digital Financial Advisors Council, along with Helen Modly of Buckingham Strategic Wealth, what was the worst thing they ever had to tell a client.

Louis Barajas, founder and CEO of Wealth Management LAB, Tustin, California: “We do a thorough review of a new client’s financial statements. When we pulled a credit report from a client and found credit accounts opened at their bank that they were not aware of, we did an audit of their bank statements and saw a lot of unidentified transactions. We ended up catching a $416,000 embezzlement from two bankers. It made the news.”

Sophia Bera, founder of Gen Y Planning, Austin, Texas: “That the shady feeling the client had about their investment advisor was worth exploring because I couldn’t find anything indicating that person was an investment advisor, and I thought that they needed to move their money as quickly as possible.”

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Douglas Boneparth, founder and president, Bone Fide Wealth, New York: “During the recession, when I was working in another advisor’s practice, I had to tell some pre-retiree clients that they were not going to be able to retire in the timeframe they were planning on. No one had expected a drawdown quite like what had occurred, so it was heartbreaking to tell them that they were going to have to work longer — assuming they kept their job.”

Cathy Curtis, founder and CEO of Curtis Financial Planning, Oakland, California: “It’s always hard to tell a client that their savings won’t last through retirement if they keep on the course they are on. No one wants to hear this. I’ve had clients get angry, and others that have cried and others that don’t believe it. After the initial reaction, we go on to discuss how to make adjustments — either cut expenses and save more, or find ways to bring in more income.”

Rianka Dorsainvil, founder and president of Your Greatest Contribution: “One of the hardest conversations I had to have with a client was sharing with him that he was not financially able to retire. He had earned great money over his lifetime, but was not saving enough for retirement. Based on the cash flow he expected in retirement, his savings weren’t enough to retire when he wanted.”

Stacy Francis, president and CEO of Francis Financial, New York: “Annabelle – that she could no longer support her daughter. The reason this was so hard is that she and her only child were disinherited from her family. Annabelle never wanted her daughter to suffer financially from being shunned by her family – which was the most painful betrayal Annabelle experienced in her life. She has done everything she can to provide everything for her daughter. Annabelle’s daughter had to be cut off because she was a college graduate in her mid-20s who was living beyond her means. Her spending habits were jeopardizing Annabelle’s long-term financial stability.”

“Due to Annabelle’s failing health – she was forced to stop teaching and earning a hefty salary, and we had to tell Annabelle that she could no longer help her daughter financially. It was devastating for us and for the family. We paid for several sessions for Annabelle to meet with a financial therapist and we are happy to say that Annabelle has come to peace with her financial situation and her daughter is taking steps to support herself on her own. Their relationship is closer than ever and they are both heading into a secure financial future.”

Ivory Johnson, founder of Delancey Wealth Management, Washington, D.C.: “I had to advise a client to downsize his house because he and his wife couldn’t afford it. He got downsized from a lucrative job, couldn’t find a suitable position, decided to retire, began living off his savings much earlier than we had planned and was close to reaching the tipping point. The house had an emotional value; it was the last vestiges of his successful career and letting it go was painful. Eventually we discussed what was important to him, what gave him a sense of purpose and he’s in a good place after downsizing.”

Diahann Lassus, co-founder, president and CIO of Lassus Wherley, New Providence, New Jersey: “After many years of cautioning a client about spending more than they were earning, I had to tell them that in another year or so they would run out of money. We advised reducing expenses and worked with them to better manage their resources but they continued to deplete assets. This client started with very low assets and income and we worked with her to stretch the dollars. However, sometimes the reality is that you just can’t stretch them far enough and you have to look for other options.”

There are few alternatives that are available for individuals who have fixed expenses and not a lot of invested assets. When someone has reduced their spending as much as possible, the options become very limited. These options may include selling a home and renting or ultimately moving in with adult children or other family members. Those decisions are incredibly hard and don’t always have a happy ending.”

Helen Modly, wealth advisor at Buckingham Strategic Wealth, Middleburg, Virginia: “‘At the rate of your current spending, you will run out of money in 10 years or less. If you don’t reduce your withdrawals by at least a third immediately, you will reach a tipping point where you can’t reverse course.’ (The client, of course, left us and went to another advisor who ‘promised’ a higher return).”

“I suspected that would happen, but I never want to be the engineer in a train wreck. Some people have an unhealthy relationship with money or have developed an internal reward response associated with the act of purchasing. I have learned that this is a behavioral issue and cannot be cured with information. If information alone could change behavior, there would be no smokers.”