I have always been totally transparent about the fact that, unlike my partner Paulette, I don’t come from a financial background. Rather than seeing it as a hindrance, it has been a great asset in our business StrategyMarketing.ca because I can speak for women “on the other side of the table”— that is as a female investor – in short, I’ve been there and done that. And, from my own experience, I can tell you that I had an advisor who, when the markets tanked in 1998, simply disappeared. No one could reach him. It turned out that he just didn’t want to have to deal with unhappy clients.
It was very scary for me and, no doubt, for many of his other clients. To have no idea what was going on with my finances and to lose touch with the advisor who was managing my money was hugely unnerving.
So, what could my advisor have done to reassure me? And what advice would we offer to advisors now? Before we start – understand that you don’t have to have a crystal ball and be able to predict the markets to be of value to your clients.
You just have to be there.
First and foremost, reach out to each client. Given the current circumstances by phone or email is best – but normally we’d say a meeting is ideal. This initial contact is to gauge how they are reacting to the volatility – are they okay because you’ve already talked about it? Are they concerned about the value of their portfolio? Or are they somewhere in between?
Ask each client how they are doing as markets turn downwards? Their response will help you understand how you can be helpful in reassuring them at this time (assuming they are rattled).
Acknowledge that the market is volatile but that you would not recommend any changes to the portfolio at this time (assuming that’s true). In the meantime, offer to deal with any fears or concerns they might have about achieving their long-term goals.
Never try to dismiss their fears by saying things like, “this too will pass” or equally empty phrases. However you can try to reassure them by letting them know that past downturns have been followed by a market rebound and this one will likely do the same.
Above all — listen patiently to their concerns, jot them down and answer them honestly. Try to keep clients focused on their goals rather than on the market indicators.
Remember to speak the language of life – don’t quote rates of return, stats and actuarial predictions – rather talk about their lifestyle and life goals – “I’m confident that you will still be able to retire within the next 10 years. Remember we talked about market volatility in the plan we created last year. I understand your concerns – it affects everyone. But since you don’t need the money today, we have time to rebound.”
For many of us, putting our heads in the sand in times of trouble is reflexive but volatile markets also offer you the best opportunity to build and cement your relationship with clients. Be there for them and they will remember you.
Women are key to calming the concerns of clients – talk to them, engage them as champions within the family setting, use them to disseminate your message of calm amidst the frenzy.