I was thinking of starting this column on how to deal with uncertainty with a line like “We live in uncertain times,” but it occurred to me that we’ve always lived in uncertain times. So did our parents and grandparents. In fact, the times have been uncertain for most of human existence. Yet we’re always seeking certainty–good, bad, or indifferent.
Recent research, as reported November 22 by Roni Caryn Rabin in The New York Times, indicates that for mildly neurotic people (and who doesn’t fall into that category?), even bad news is less stressful than uncertainty. As a high-anxiety type, I definitely subscribe to the corollary that the devil you know is better than the one you don’t.
With all the economic, financial, and global turmoil right now, uncertainty is sure to be rife among your clients. If you’re laboring to cope with this stress in them, and in yourself and your co-workers, read on for some possible answers.
Q: A young planner I hired a couple of years ago was fine at delivering our firm’s “stay the course” message as the economy began to turn sour. But now, the collapse of the financial markets, investment banks, etc. have severely rattled him. He tells me he can’t in good conscience tell clients that everything will be okay in the long run. I’m a little calmer because I’ve been through more, but I don’t know how to counsel him. Should I relegate him to the back office for the time being, or is there some way to help him regain his confidence with clients?
A: Dick Vodra, the noted planner and first vice president of Spire Investment Partners in McLean, Virginia (and a close friend), has been telling his worried clients, “There are two possibilities. Either it’s the end of the world, in which case nothing will help; or it isn’t.” He operates on the probability that it isn’t, and that’s a situation he can do something about.
The future of our economy is definitely uncertain, and no one knows whether your planner’s gloomy picture or your own will be closer to the eventual reality. So although your experience will be of some help in dealing with this, remember that all of us are trying to navigate a new landscape filled with many question marks.
Before you decide whether or not to quarantine this shook-up employee, I’d take him aside (probably more than once) and explore his fears and doubts with him. After listening carefully and compassionately, share your own emotional and intellectual journey with him. Try to help rekindle his enthusiasm for aspects of his job that still give him satisfaction and meaning. Remind him that advisors have always had to deal with uncertainty, and that your (and his) job is still to help clients prepare for the worst while hoping for the best.
If you find that he is still panicky and pessimistic after this conversation, then (and only then) you might consider giving him some behind-the-scenes work to keep his mood from discouraging your clients. But ideally, these discussions will lead to a sorting out of what the two of you do and don’t know, and to your planner’s recommitment to the work he used to enjoy. You and he can then work out how to proceed amid market factors that no one can predict or control.
Q: Everything I used to believe about portfolio construction, risk assessment, and financial safety has proved untrue. I feel like I’m stranded in the wilderness without a compass. Is there anything I can do to regain my bearings? If not, how can I learn to live with this uncertainty?
A: Your angst is very understandable, and I feel tremendous empathy for you. Many other advisors are in the same boat. In fact, my first suggestion is to reach out to colleagues (especially those who are not in the throes of panic and despair) and brainstorm with them about what to do in the current climate.
When it comes to your clients, I think it’s important not to demand fortune-telling abilities of yourself. Instead, partner with each client to determine the best course of action. Beginning with a review of their goals and their dreams and see what changes you can recommend in good conscience. Unless you have an elderly heart patient on your roster who is sleepless with anguish over his shrinking portfolio, most of your clients probably need reassurance to stay the course. (In the case of the very real gentleman with the weak heart, the advisor did sanction moving the money into cash so his client could sleep at night. Good health is more important than hanging on for a market turnaround.)
Finally, I would recommend examining your own past record of getting through doubtful or challenging situations. What signs of stress appeared when you felt overtaxed? How did you cope? What strategies enabled you to move from a primitive survival mode to a rational, adult thriving mode? What brought you hope and healing: a loving family, music, nature, hobbies? Can you apply them now?
Ask yourself, too, if there are any aspects of today’s uncertain situation that you can be sure of. Once you feel more confident of your footing, I wager you’ll be able to move forward without feeling you absolutely must know the future right now.
Q: I recently had to let go almost a quarter of the advisors and even more of the support staff at my firm. This layoff has left the “survivors” feeling shell-shocked and depressed. At a time when clients really need us to be upbeat, what can I do to boost my staff’s morale?