The stock market drop is moving beyond a dip and into the historic-grade, freak-out zone. Some of those running around with hair afire might be your clients.
Ah, there’s your phone ringing. What should you do?
- Take the call – Even if you can’t talk long, it’s important for clients to know they can reach you when they feel it’s urgent. It’s their money, so it’s all about them.
- Be calm – They are calling for information.You are sitting in front of your terminal with lots of blinking red numbers. They don’t want to hear anxiety in your voice. As their advisor, they need you to be a calming influence. They need your advice.
- Let Them Talk – They are anxious. They may need to sound off. Hold back and listen to them. Wait until they are done before responding.
- Why is the market going down? – You need an informed answer. You will get asked this question a lot during the day. Your firm may have analysts who have identified two or three major reasons, backed up with facts or article links. If you are a sole practitioner, the firms providing investment products likely have this information available. Legitimate mass market business news organizations should have this on their website. Have a short answer ready.
- How am I doing right now? – You likely have real time portfolio pricing available, so you can answer this question. Remember to compare apples to apples. The S & P 500 is a 100 percent stock index. Your client might be 50 percent stock, 40 percent bonds and 10 percent cash.
- What do you think I should do? You need to have an opinion. If they have been a client for some time, it’s likely you have both been through volatile markets before. Remind them of one of those times. Since the market was recently near 18,000 on the Dow Jones Industrial Average, they will probably conclude they held on and things worked out previously. Share your advice.
Yes, it’s tough on the advisor, but declining markets are a time where advisors show the value of personal, professional advice.
Bryce Sanders is a financial columnist for InsuranceNewsNet. He had more than 12 years’ experience as a financial advisor and is now president of Perceptive Business Solutions, providing high-net-worth client acquisition training for the financial services industry. His book “Captivating the Wealthy Investor” is available on Amazon. Bryce can be reached at firstname.lastname@example.org