The last quarter of 2018 has been rife with market volatility following months of consistent gains. As a financial professional, this change in the climate may have you wondering how best to approach your clients.
The truth is volatility is a natural part of the market cycle, even though your clients may not want it to be. It’s essential that every client you have is aware of this so they can be prepared for when volatility inevitably comes knocking. However, if your clients become anxious, the following strategies may help you to manage their fears.
Be Accessible
Firstly, it’s important that you make yourself accessible to your clients. Identify which of your clients are more at risk or are more unnerved by the volatility and let them know you’re available. When they reach out, you should drop the jargon and practice your bed-side manner. A straightforward, educational approach your clients can understand will go a long way in tempering the high emotions associated with market volatility.
Stress the Long-Term
The long-term perspective is important to stress in times of volatility when clients are becoming restless and considering selling. Sitting your clients down and reminding them of their goals will usually help them to see that staying the course is generally the best option for them.
A part of this is informing them of the danger of trying to time the market and that their diversified portfolio was designed to weather volatility.
Revisit Their Risk Tolerance
Times of volatility are usually a good time to discuss your clients’ risk tolerance since the results of risk are more evident. Depending on how their portfolio is positioned and where they are in relation to their goals, you may want to discuss reducing their risk. However, you need to make sure any decision you make is consistent with their long-term financial plan.
Stay in Touch
Perhaps the simplest way to make sure your clients are confident about their investments is to stay in regular contact with them through email. By sending them updates about the market and their specific portfolios, you can instill confidence that you’re paying attention to their needs and everything is on track.
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https://www.investopedia.com/financial-advisor/how-talk-clients-about-market-volatility/
https://www.americanfunds.com/advisor/tools/client-conversations/volatility.html
