November 06, 2017
Advisors and clients may not be prepared for a market correction
If you were around in 2008-2010 as a financial advisor and a client, remember what the conversations were like and how long they took with people worried about their future. Because we have not seen a major correction since then, financial advisors forget how much time it took to have discussions, rebalance portfolios if necessary and manage future risks. Even worse, financial advisors are running past capacity now and are having trouble keeping up with their current clients, let alone discussion a market correction with clients and how to reposition their future. Imagine if the market correction happened tomorrow. How many of your clients would like to hear from you, good or bad? Is it 100-200 or more clients who may be expecting to hear from you?
What is your communication plan?
Do you have a letter, email or template that you can get through compliance to pass out quickly to your clients that are expecting communication? What do you want to communicate? Like most major corrections, it is not what you communicate,( although we can put a large debate in here) but how timely you communicate. This is where robo advisors are extremely efficient at timely communication to their clients. For example, when the US election occurred, most newsletters I received from advisors talked about the news of the day. If I want news, I will turn on the news. But some clever robo advisors figured out that if you focus on your goals and your plan, then at least you can make some adjustments that you are in control of.
Get a plan in place
The easiest thing to prepare for is a communication piece that you get pre-approved through your branch manager, marketing, and compliance department, on what you would like to say when a major event happens. Have a coordinated effort with your team, so that they know what communication goes out, how it goes out and who it will go to. Imagine if you are a prospect on a database from another financial advisor, and your personal financial advisor never communicates after a major event, at all, and you hear 1-3 times from another advisor. Is the trust going down with your current advisor because of lack of communication? Your thinking, geez, when am I going to hear from my advisor? Weeks go by, and nothing but a phone call from another advisor asking one simple question” Has your future plans and goals been affected by the recent market changes? Has the probability of reaching all of your goals changed recently, need to adjust your financial plan?
Use different types of communication
Review with your compliance department and branch manager on different types of communication. While social media is exploding, it also has to be approved by your firm. Does your firm allow video? Videos may be a great way to get your message out quickly to all of your clients. After all, video is exploding the way business is being marketed today. Have you considered webinars? A webinar may be a great way to have a guest expert on the air with you to answer questions and give a different point of view. Webinars also can allow you to reach a larger audience including your prospects and give people a chance to connect with you, the professional. This may be a good time to ask your compliance department how you can communicate better with your clients and prospects and ask for the tools they have to help you, such as videos, webinars, email campaigns and social media.
Do you have a list of top clients that you would like to call, text or send a personal note to? Your best client may or may not expect to hear from you, but will appreciate the fact that you are paying attention. Some people do not mind hearing the negative news from you and in fact, appreciate it more than the positive news. Make the list, have a script, approved email or discussion point. Test it out with clients, staff or other financial advisors. Then deliver it, with confidence and as my mentor, Bill Bachrach says “ listen with empathy” and understand their thinking. This will help you guide them and give the advice THEY are looking for by truly understanding them.
Bad news leads to opportunity
In a recent client feedback meeting I did with financial advisors and their clients, I asked an advisor's clients how often they want to hear from their advisor? The answers were consistent with top clients. When there is something I need to pay attention to that is important to me, I want to hear from my advisor, good or bad. They also wanted to see their advisor at least twice a year to go over the “no stone unturned” checklist of items to get their financial life in order. The advisor put together binders in the six areas of their financial life, tax, estate, risk, investments, insurance and debt and used my “no stone unturned” checklist of items to get their financial life organized better. Do you use an annual checklist ? In this advisors case, the client said they moved all of their assets to their advisor, after the advisor told them of the bad news around the market correction and discussed adjusting their plan. The client understood the bad news, but adjusting their plans and course was valuable to them, so they saw the value of the advisor more clearly in bad markets. It was the communication that the advisor planned out, that lead to the opportunity. Plan out your communication better, because your clients want it and deserve it.
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