Clients in a state of fear over a market crisis may seem unapproachable when it comes to working with their advisor.
These clients are gripped with anxiety which affects their ability to think clearly and hold a vision that goes beyond the immediate crisis. Many may forgo their advisor's input and decide instead to flee the situation by selling their investments and taking huge losses.
Advisors, however, can still get through to these clients by developing some simple skills that can help turn around a client's reluctance or inability to deal with the worst.
KNOW FEAR
First off, fearful clients have lost their vision. Take a friend of mine who I spoke with last week as the current crisis was unfolding.
This skittish market has me scared," he confessed. "I cant sleep at night. I dont know if my business will be here three months from now.
These clients see no light at the end of the tunnel. In less than an instant, their internal security system is activated, and they are in full-survival mode. Some may end up biting off the heads of advisors who look at them the wrong way. Many will take matters into their own hands, or freeze emotionally and doing nothing.
BREAKING THROUGH
Advisors can still reach these clients by putting the following principles into action:
Stay in contact: Call clients and listen closely to their concerns. Show interest. Acknowledge the challenge. A little hand-holding goes a long way.
Provide some context:Offer clients a look at the problem with a broader point of view. This isnt the first market correction and it wont be the last.
Take the next step: Develop a concrete plan that gives the client a sense of control and reassurance.
My own broker uses this approach. When he called about the current crisis, he asked how I was taking the news of the sharp drop and listened to my response.
He calmly suggested I sell some stocks, which was consistent with our original financial plan. He reassured me that this is a market correction, and we should be prepared to ride it out.
Eric Weiner is an author, speaker and consultant who works with both advisors and clients. For more information, visit his website:
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