Lifting Your Clients above the Fray
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Most years are full of surprises and 2016 did not disappoint. Markets pulled back sharply to start the year, stirring 2008 redux fears. Then came unexpected political outcomes – like the Brexit referendum and the U.S. presidential election – frightening investors again. The votes caught most media outlets and television “experts” off guard, adding to a sense of chaos. In a topsy-turvy world, Main Street investors were tempted to abandon carefully constructed financial plans for the perceived safety of cash.
Periods of fear and confusion are when your clients need you the most. On that note, here are several areas advisors should focus on to better serve their clients in times of need.
Whether they’re still working or enjoying retirement, many clients don’t want to spend their free time researching stocks, economies and markets. They have already spent a career (or a large part of one) gaining expertise in a specific industry, so whether it’s a lack of desire, time or expertise, many don’t aim to build that same muscle in finance. Instead, they seek out expert financial advisors for this responsibility.
However, to truly add value, advisors must know how to distill complex topics into clear, easy-to-understand language. The media makes this task more difficult by compressing news into hyperbolic headlines and fear-inducing sound bites. Loud opinions on cable television networks, slanted front-page coverage, advertorials and the proliferation of “fake news” stories often drown out thoughtful, level-headed analysis. To combat this, advisors should take every opportunity to provide necessary context – and education – on current events.
Use this as an opportunity to educate your clients. Besides regular contact from advisors, who are typically available to answer any and all questions, host client-education events on a regular basis and in a variety of formats. From large group presentations to more intimate Q&A dinners – and even online presentations – you can provide a rational perspective to your clients on the current state of markets. Most importantly, provide clients with a forum to directly ask questions about the issues concerning them. And, if you offer a wide array of events and communication methods, clients can pick and choose the one that works best for them. While not all advisors can do all these things, emphasizing client education is important however you choose to execute it.