September 6, 2018 | Newsletter

You can’t time markets or predict the future, but we do know for certain that markets will always correct. An all-too-common client-relationship mistake many financial advisors make is not proactively communicating during market corrections. Regardless of your fee structure, advisory platform, or diversification efforts, down markets typically cause clients to worry about a lack of control over their investments.

Because you will most likely need to maintain your busy schedule during a market correction, you may have limited time to communicate with clients. Our experience has shown that at the very least, you should arm yourself with a letter, an email communication, and a phone script with talking points. Your message should:

  • Respect client emotions and/or concerns
  • Answer any questions clients may have
  • Reinforce the investment decisions you’ve made together or propose a solution, if appropriate
  • Help clients understand that irrational actions are unwise during market downturn (e.g. switching advisors)
  • Confirm in their minds that you’re the right person to work with during these times

In addition, a down market not only presents the chance to strengthen and maintain client relationships, but it also offers an opportunity to gain new clients from advisors who may not be communicating with clients during these time periods. A lack of communication can erode the confidence an investor has in their current advisor.

Now is the time to ask yourself, “Am I ready to help all of my clients confidently weather the next down market cycle?” It’s never too soon to be prepared.

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