Advisors: Don’t Waste This Chaos!

Aug 16, 2011

Back in 2008 when the market was at its peak of turmoil, I met with a very large firm in the Midwest and the CEO made a statement that stuck with me. It was true then, it is true now. DON’T WASTE THE CHAOS. Just like 2008, today the market is down 600 points, up 500 points, down 400 points then up again? Sometimes all in the same day! Who knows what’s going to happen next?

What I do know is that today we have a real opportunity to solidify our relationship with clients and secure new relationships that will last a lifetime. This is the time when good advisory practices grow! The market volatility is causing concern among clients and prospects alike. Our natural inclination in times like these is to “circle the wagons” and contact each of our clients to hold their hands. We “know” that none of our prospects is “buying” right now, but that is exactly why you need to contact them.

Confusion and upheaval are your best friends

Every day, consumers are being whipsawed between fear and relief when they see the news. My bet is the “rookie advisors” out there are not communicating with them, and if the consumer hears anything from his or her financial institution, it is filled with old clichés financial mumbo jumbo.

recent study of investors with a net worth between $100,000 and $1 million (not including primary residence) found similar criteria in choosing a new advisor. An overwhelmingly large group of people, 92 %, put the greatest stock in transparency and being kept in the loop.

This is great for advisors! Transparency is a way for advisors to step in and take charge. Here are a few ideas on how to boost transparency and keep existing clients confident:

  • Communicate the what and the why relating to investment performance
  • Have a transparent structure that explains how fees are charged
  • Return calls within the same business day
  • Share relevant product information and insights about the market

 For your prospects:

  • Step up your communication (to prospects and suspects). Show them the what and the why of their own portfolios’ investment performance
  • Offer a second opinion on the prospect’s portfolio focusing on risks they’re taking and fees that they are paying today
  • Offer to communicate with other members of the prospect’s family and friends
  • Hold a “town hall meeting” or have coffee with anyone who has questions

Being visible and transparent is key in this chaotic time. Not just keeping these ideas in mind but putting them to work can help advisors maintain healthy relationships with their clients and acquire new clients. This may be one of the best times you have ever had to grow your practice.

Are you wasting the chaos?

John Anderson

John Anderson

John Anderson is the creator and lead author of Practically Speaking blog and Managing Director of Practice Management Solutions for the SEI Advisor Network.

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