Taking Stock: Things to Do When the Markets Misbehave

Those are investors who broke with their brokers and advisors who failed to properly structure their portfolios, leaving them unprepared for the inevitable market downturn we’re now experiencing. Here are some places to start:

Compensation: Are you a fee-only firm, or at least derive the majority of your client revenues from fees? Perhaps the primary differentiator between brokers and professional advisors is fee compensation paid directly by the client (or directly out of client accounts), and the number of potential clients who are becoming aware of the difference and what it really means to continue to grow. Of course, brokerage firms have come out with their “fee” programs, but they still don’t seem to have it quite right. When folks start looking for a “better way” to get advice, increasingly fees are what they are looking for.

Staffing: Do you currently have the people power to follow up on all the qualified referrals you get today? If yours is like many advisory firms, you and your partners (if you have any) have their hands full servicing your current clients. So you rarely take the time to follow up on all or even most of the opportunities you already have. The solution: You can decide to stay at your current size (a good decision for many advisors) or you can add some staff–first clerical, and then professional–to give yourself more time and energy to take better advantage of that opportunity while it’s still knocking.