You could do no wrong. We were in the middle of the greatest bull run since 1955. Your picks, placements, allocations were consistently gaining. You were making clients money hand over fist and your clients were happy. Chances are you probably earned a few referrals from it.
How are you feeling and reacting to the environment we are in now? What are you telling your clients and prospects about the Covid-19? How are they handling it?
Depending on your clients political views, you can probably figure out which side of the fence they are on. Either way, the reaction to current conditions seems to be irrational and an overreaction. Longer bull runs generally constitute wild swings on negative news. Recall the North Korea fiasco not so long ago?
Bottom line, these market conditions hurt take home pay. If you are a fiduciary and charge a rate based on assets managed, you are most likely looking at a 10-20% pay cut (based on risk tolerance)
- This is the best time to build your pipeline
- People need peace of mind more than ever
- The media directly instills fear and panic disproportionately
- Longer bull runs have more severe crashes during periods of panic
There are advisors out there that are checking their clients portfolio and realizing they overshot their risk tolerance and time horizon. Now those clients that were close to or near retirement are in a horrible position (hopefully not for long). Think of all the tough conversations advisors are having with clients all over the country. More importantly, think about the advisors that are NOT having those conversations.
You never want your client to be calling you for updates or information. It simply means the client is not important to the advisor. You should make them feel as if you are the only one working for them. Most of these individuals are probably at home at this point, working remote which means they probably have some time to spare.
Is your pipeline current, full and are you providing a touch point on the daily?
These prospects and clients are not only concerned about the performance of their financial portfolios but the very existence of their job. While we have experienced a fortunate low rate of unemployment, there is no doubt there will be cuts as some companies have had to put off revenue such as the cruise lines, gaming or even travel stocks.
This is your time to plant your flag with new prospects. They may not want to make a change in advisor now but when the smoke clears, it will be you they still see standing with their best interests in mind.
- Maintain daily touch points, it will be highly received
- Provide firm research and your opinion (that is what people pay for) to establish peace of mind
- Provide, implement and discuss behavioral finance to help ease irrational behavior
- Highlight and discuss all the good in their lives, it will help take their minds off markets
Many of us can recall the horrors of 2008, which is arguably the worst set of market conditions and scenarios one could possibly experience. Major financial institutions buckling at the knees, layoffs and closings by the 10’s of thousands.
Families losing their homes, portfolios and everything in between. No 2 crashes are alike but do provide a thick coating of experience and understanding of peoples reactions to it.
There is nothing worse than losing money for a client. You treat it as your own money that is being lost. Some advisors can handle these times better than others. We have seen some have panic attacks, heart attacks, pack up and leave, bury it in a bottle or just hide in the office and do damage control.
The longer you wait to have a conversation with a client, the worse that negativity compounds. GET IN FRONT OF IT ASAP!
If you have accomplished everything, discussed your clients plans, time horizon, risk tolerance and comfort levels, then this should a fairly simple conversation to have. Maintaining a calm and cool composure will help your clients through these difficult times and will be able to breathe a bit easier until market conditions clear up.
Building a process is much easier when working backwards. We suggest you read this article we put together on helping break down a desired end result.
Everybody and everyone. Social media, home phones and e-mail. Avoid letters as they may just be tossed.
- Leverage the Odegee platform to discover deep connections and referral opportunities during these turbulent times
- Over-communicate to clients and prospects
- Market to them daily and when significant reports or news occur from your firm
- During these times, they will read everything you send. It is helpful to get it from one source, then conflicting or biased outlets
Stay in front of your clients, talk about what your analysts are saying and have an opinion of your own! Your prospects will be more willing to talk now then the last 11 years – that is a guarantee. A good majority of those are not getting the same attention as you are giving them. Chances are you will come out with a new client and sound relationship going forward.