Market Volatility - An Opportunity, Not a Threat!
As the coronavirus pandemic continues to stir up markets, your clients may be growing nervous, if not outright fearful. While some see this as a threat, top advisors view these moments as a tremendous opportunity to reinforce their value, engage with clients and grow their businesses. They understand that the best defense is often a great offense. We want to help ensure you’re equipped to help your clients focus on the financial finish line instead of the ups and downs of the markets.
So, pick up the phone or fire up Zoom and talk to your clients! And when you do, keep a few of these advisor-proven tips in mind:
- Focus on the plan: For advisors offering a client-centric, goals-based planning approach, turn your client’s attention to their plan. Help them refocus on their goals, not the distraction of the news. Remind them that shock, awe, and fear drive ad revenue and are highly uncorrelated to their ability to reach their goals. Show them their progress and remind them of the assumptions that were made when the plan was created. Reinforce that we have been on an incredible run the past few years and show them how a downturn might impact their progress. With a well-diversified portfolio and reasonable planning assumptions, they should hopefully still be on track to reach their long-term aspirations.
Being proactive and focusing on their goals will do a couple of important things. It should help settle their fears, reinforce the value you deliver and demonstrate you care about them, their goals and the work you are doing on their behalf. Without a call from you, their minds will wander to all sorts of unwanted places.
- Prove your worth: As an advisor, one of the most important things you can do is be transparent with clients and promote open dialogue, particularly during rocky markets.
When communicating with clients, it’s critical to be proactive. Don’t wait for them to come to you with questions. Rather, reach out as soon as possible to ensure they are getting the right information straight from the source as opposed to interpreting conflicting messages from the media.
- Educate: When the markets are taking a turn for the worst, it’s not uncommon for clients to want to exit their positions immediately. This, however, is where advisors come in. In times of volatility, it is important to educate your clients on market behavior and not let their emotions get the best of them.
The market produced attractive returns in recent years, but clients need to understand that it is in constant motion. Additionally, moving to cash can be quite risky especially when there is not a disciplined process or methodology for re-entrance.
Regardless of the volatility along the way, clients must realize that over the long-term, putting money to work in strong, sound investments should get them to their end financial goal.