Navigating the current market in this time of record inflation and geopolitical tensions can be a daunting task, especially for emerging advisors working to build strong relationships rooted in trust with their clients. Amid this current environment, it’s critical for advisors to be nimble in responding to client worries about assets and markets — but also to anticipate them.
Good client care requires addressing all the emotional layers that come with financial planning. Here are three ways to ensure you’re providing clients with the best holistic service.
Address anxiety with new clients: Even the most experienced investors can get anxious about their portfolios when the market shifts, and new client relationships are particularly fragile during times of market volatility. Advisors should prioritize easing any possible client concerns early and often at the onset of the relationship.
Emerging advisors should also keep in mind the unique challenges that “emerging investors” may face. Members of Generation Z, and even most millennials, have never seen a bear market during their professional years. Even though the steep market drop in March 2020 was short-lived, it also represented a rude awakening for many investors. Educating clients on market risks and helping them plan for different scenarios will help them stay confident in their portfolios.
Answer — and encourage — questions: Clients may have urgent concerns amid the ongoing Russian invasion of Ukraine and need reassurance about their exposure to the related fallout. In such situations, advisors should reiterate the client’s long-term goals, emphasize the financial plan agreed on at the beginning of the relationship and remind them that market volatility is temporary.
It is important not to get defensive when the client is questioning you or the plan. Indeed, your clients' questions provide an opportunity for you to elevate and strengthen the relationship.
Create confidence: When facing volatile markets, establishing achievable goals during the financial planning process will allow you to help clients make better and more confident decisions. Remember that the emotions investors struggle with during stressful times are often rooted in things outside their control. A client who is nervous about continuing to hold assets during a bear market may need reassurance when making decisions that feel contrary to their instincts.
But these hard times also provide advisors with an opportunity to be vulnerable with clients and guide them to greater clarity and confidence. Given that many young professionals have never experienced a bear market in their adult lives, reassurance may need to be accompanied with education. Advisors ought to address clients’ risk tolerance and point to historical data that proves holding investments during times like these is the right strategy for portfolios of varying risk.
Above all, remember that client service is the most important aspect of your job, especially amid market volatility.
