Trending
As you very well remember, we had a quick and severe market downturn in March and April, followed by the greatest stock market rally in the history of the stock markets. Naturally, clients are panicked because of the market uncertainty. Regardless of where the DJIA closes today, we know for a fact that there will be another bear market – we just don’t know when.
To help you prepare yourself and your clients for what inevitably lies ahead, we bring you the top 10 most-read posts on the topic of market volatility, falling markets and growing your business in a post-pandemic world.
If you need help expertly guiding prospective and current clients through bear or volatile markets, get our Bear Market Tool Kit.
#1. Four things clients need to know about volatility
When markets are volatile investors can get spooked and start to question their investment strategies. Especially if they’re new to the process of investing. This could prompt them to withdraw from the market and wait on the sidelines until things get better.
As their financial advisor you’re there to help them see things in perspective. By helping them understand the nature of volatility they will find it easier to stick to their plan.
Here are four things about volatility you need to explain to them right away.
(Hint: Warn clients that market volatility seems more extreme than it is, and explain to them that it’s always built into the plan.)
#2. Four misconceptions about market volatility your clients need to be aware of
As a financial advisor it’s your responsibility to get your clients to stick to their financial plan for the long term. This means you’ll need to change any pre-conceived notions they may have about market volatility. In particular, you need to get across that volatility does not equate to risk or loss.
(Hint: Clients often mistakenly believe that the media accurately represents market volatility, and that when shares fall in price, they lose value.)
#3. How to prepare yourself for market corrections
Stocks will edge higher, sometimes for prolonged periods of time, but this should never give rise to complacency. Because there’s always a ‘bear market’ waiting just around the corner.
Don’t get caught off guard when the markets start to fall. Prepare yourself in advance, both for your own peace of mind – and so you’re ready to reassure clients that there’s no reason to panic.
Here are some things you can do to make sure you’re in command when market corrections take place.
(Hint: Preparing your bear market presentation before the market takes a downturn is key.)
#4. How to prepare your clients for the next market correction
The Natixis Investment Managers 2018 Global Financial Professionals Survey revealed that 57% of advisors believe investors are unprepared for a downturn. This illustrates how difficult it is to convey the nature of turbulence to clients – and that volatility is an unavoidable part of the investment process.
Take the lead – prepare and educate your clients on the nature of market volatility. Then it will be far easier to counter their anxiety when the next market correction comes.
Here are 5 things you can do right away.
(Hint: Learn the ‘Litany of Disaster’ story and share with clients why Warren Buffet’s favorite holding period is ‘forever’.)
The ‘Litany of Disaster’ PowerPoint presentation is available in our store.
#5. Bear market: what you do will make or break your financial advisor career
Every advisor gets just a few great career-building opportunities: Times when they can really establish themselves as experts, build long-term credibility, and differentiate themselves from the competition – most of whom are hiding from their clients because they don’t know how to guide them through the bear market.
What do the real pros do when things are scariest and when your clients are calling you scared witless, and they want to go to cash?
Well, they communicate, they reassure, and they give their clients a sense of market history, and direct their attention to the big picture.
They show clients how to think strategically and not just tactically.
And so should you!
Here’s how to make sure you and your clients make the most of the next bear market.
(Hint: We’ve been here before, many times.)
#6. Four reasons why you should prepare your bear market presentation when the market is high
When the market declines your clients will no doubt be aware of the simultaneous fall in the value of their portfolios. And they will be concerned. Human nature dictates this. That’s why when the time comes, it’s crucial that you are prepared to counter their insecurity with reassurance. You must be ready to instill them with confidence that their investments are secure.
If you run and hide when the markets tumble (like a surprising number of advisors do), your clients’ fears will multiply. As a consequence, they could end up making a bad decision about their investments – or about working with you.
So, make sure you’re ready to step into the breach by having your presentation ready. Here are four reasons why you should prepare that presentation right away.
(Hint: You’ll be doing what most Advisors don’t do.)
#7. Financial advisors and social distancing – how to keep prospecting and servicing clients
Traditionally, being a financial advisor has been a face-to-face business. We are creatures of the working lunch, the handshake, the coffee meeting. Appointments are the lifeblood of our business, because we’re in the business of personal relationships. That’s our real advantage over the low-cost robo-advisors, and a big part of how we justify our fees.
But social distancing is changing all that in a flash. I’m optimistic about the economy and the stock market long-term. But this bug isn’t going away anytime soon. We are undergoing a rapid cultural shift where social distance may very well become the norm for a good, long while.
So all of us in the wealth management business are going to have to adjust. Here’s what I suggest you do to keep growing your business even with social distancing.
(Hint: It’s almost all about finding ways to do what you do but virtually.)
#8. Communication in a post-pandemic world: How to connect with prospective and current clients
All of us are affected by the coronavirus and the shutdowns. The virus is slowly running its course but social distancing will be with us for a very long time to come.
That means most of us are going to have to change the way we market and sell our services. “Meet and greet” networking events will be out of the picture for a while. When they do come back, they’ll be different. They may look more like ‘show and tells’ with slide shows than mingling sessions.
Even walking into businesses and asking for the owner is going to be different. The small ‘handshake’ ritual that has been with us since antiquity will be changed as we figure out our new forms of etiquette and social conventions.
So, what’s the best path forward?
(Hint: It’s not only about doing the same things digitally, but finding new ways to reach and connect with your audiences.)
#9. How to fill your pipeline despite the coronavirus pandemic
Back in 1998, physician and author Spencer Johnson wrote a best-selling book called “Who Moved My Cheese?”
It’s the story of four mice who live in a maze and who have grown accustomed to cheese being deposited in the same spot every day… until one day it didn’t happen. The rest of the book explores their strategies for coping with change – both successful and unsuccessful.
The moral of the story is this: “Change happens.” It’s inevitable. Not everyone can roll with the punches, but you’ve got to adapt, improvise and overcome. You’ve got to move with the cheese.
Well, friends, the cheese just got moved!
Now, don’t get me wrong: The cheese hasn’t gone away. It’s still out there! People still want and need help managing their money. In fact, they want and need it now more than they have in years. But the way to get to the cheese is now radically different.
Here are two things you can do today.
(Hint: It involves a phone but it’s not exactly the dreaded cold call.)
#10. The clock – a sales idea to overcome irrational pessimism
You may have heard me talk before about my good friend and successful Advisor, Mark Dick. He once said to me that ‘dividends are tangible evidence that good companies don’t use smoke and mirrors because dividend checks don’t bounce.’ That is a strong power phrase that gave me a great sales idea.
Related: Do These Five Things If You Want to Succeed as a Financial Advisor