Ok, let's not sugarcoat it — the economy stinks.
The stock market has been a runaway rollercoaster with more yips than hoorays. Employment is down. Consumer confidence is at historical lows. The mortgage business is in shambles. Businesses are failing and the Fed is attempting to inject cash into a crumbling financial system to stimulate a recovery.
As a result of all this, people are scared. They're fearful of losing their life savings. They're uncertain about the future, wondering how they can recover what's already been lost; they want to know if their initial retirement plan still works.
In short, they want answers.
According to industry experts, therein lies the opportunity. People have questions about their savings and financial security and advisors have the answers. In an online poll at www.SeniorMarketAdvisor.com, this publication asked a simple question to advisors: In light of the financial crisis, are you talking to your clients more, less or about the same? Nearly 60 percent of respondents said they are talking more to their clients. It is clear in speaking with industry professionals that now, more than ever, the line of communication between advisor and client is wide open. Successful advisors will play a key role in keeping clients' fears in check during these turbulent times as clients increasingly look to them to be that calm, confident voice amid the storm, guiding them to a safe financial landing.
Be Proactive
Julie Pick, owner of JP Financial in Sioux Falls, S.D., says that being proactive with clients is a key to alleviating their fears. Since the financial crisis began, Pick has sent out three letters to all her clients. "I sent out the letters letting them know I'm here for them."
The first letter was educational in nature. "It was a history of bear markets," she says.
The second letter took a more specific look at this particular economic downturn and how it came to pass, explaining, "Investing is a long-term process. Don't panic. Don't let your emotions take over."
In the third letter, Pick suggested to her clients that "maybe now is a good time to do a review of your plan."
That last letter alone elicited three calls from clients in the first week. "In all three cases we were able to change their policies from a variable universal to a guaranteed UL. I explained to all three clients that even though I sold them the variable policies in the first place, times have changed, and that this is the best option for now."
Pick says it's essential to tell clients the truth, even when it's something they don't want to hear. "I'll say: 'When you put that money in three, five or eight years ago, you didn't expect it to go up every year did you?' You have to throw it back on them and ask them, 'did you expect it to go up every year? Well, this is one of those years where it didn't.'"
