Volatility on Display: Another Micro-Moment

Feb 15, 2018


Just a few weeks ago, I wrote about my experiences living in a financial bubble. In the post I wanted to share some best practices around how advisors communicated, educated and more importantly prepared for a market downturn. The goal was also to show that both clients and advisors can suffer from the “it’s different this time” syndrome, which can be overcome by being organized and ready.

I usually write my posts about a week in advance (for editing and compliance purposes) so of course, the market started its volatility and gyrations a few days before the post went live. Now that it is too late for the life boat drill, my question is: What are you doing about it and how is it affecting your business?

Personal, not promotional

I am on many mailing lists.  Over the last two weeks I have received a number of “client” mailings from advisors. So much of the information is stock/boilerplate and was obviously obtained from a third party. They were so impersonal and generic that I wonder if the mail did more harm than good.  To me, sending out low quality information is almost worse than sending nothing at all. It makes me wonder what the advisor was thinking. What is the point?

The best communications to clients are personal, or at least targeted. Think about your mailing list and content:

  • Have you segmented clients by type, such as retiree or accumulator? Do you have a list of “nervous” vs steady clients? Or maybe other segmentations that matter, such as similar employer or industry?
  • Are you condensing generic market-type information and discussing how the market affects your planning processes and their goals? Do you give examples and remind them of lifeboat drills?
  • Are you following up with the clients you know will be concerned? You should be the reassuring voice, reminding them you’ve discussed/planned for this market.
  • Most importantly, did the communication sound authentic? Is it your voice they “hear” in the communication?

As we have discussed before in this space, this is a great example of a micro-moment – an opportunity to continue the planning and relationship management of the client journey.

Volatility on display: Another micro-moment Click To Tweet

Advisor moment, too

This moment isn’t just about educating and strengthening the relationship with your clients, it can also force us to look at our own operations too. Michael Kitces wrote an interesting piece about the impact of this volatility on client relationship management. In “What This Week’s Market Volatility Teaches About Making Customized Portfolios For Every Client,” Michael notes that many advisors are currently “trying to figure out how to assess the damage of this week’s market volatility because all of your clients have customized portfolios.”  

For me, this is the whole problem with the rep-as-portfolio-manager, or pick-your-strategist platforms. Clients are looking for advice, not product. They want it personal, timely and customized. Sending a boilerplate article as the shortcut so you can get back to looking at customized accounts is the opposite of what you should be doing. This job is face to face, not face to computer.

By now, the market may be on its way back up after a short correction (or not).  The big question is: what are you doing about the conversations and your models?

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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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