There are a lot of statistics thrown around about bear markets, typically focusing on historical average declines or the length of time the markets take to recover. Here are two very different statistics to consider:

? Statistic #1: 87% of clients who fire their financial advisor do so because of dissatisfaction over service. Only 13% cite performance.

? Statistic #2: Research by Prince & Associates found that 81% of investors with more than $1 million in investable assets are considering taking money away from their current advisor.

Taken together, these statistics not only offer the basis for practice management in a bear market, they remind us that bear markets combine significant challenges with enormous opportunity. Advisors who respond intelligently now will build a foundation for future growth and profitability. Here are the three essential bear market steps from a practice management perspective.

1. Manage your clients’ emotions

Now is the time to earn your fees. Your most critical job is helping clients manage their emotions and preventing them from making mistakes that can damage their long-term financial health.

How critical is it to manage their emotions? Consider the most recent Dalbar, Inc., study of investor behavior. From 1988 through 2007, the S&P 500 Index had an average annual return of 11.8%. The average equity mutual fund investor, however, earned only 4.5%.

That’s an enormous difference, with many contributing factors. Chief among them is the tendency of investors to react emotionally by abandoning the market after it declines and buying back in after it rises. They sell low, buy high, lock in losses and are late to join the recovery.

You must be proactive, frequent and consistent in your message. You need to provide clarity and leadership–and education. Speak to your clients about their emotions and underscore the danger of emotional responses. Talk to them about the historical patterns of bull and bear markets. And explain that in the long term they need to be invested in equities to achieve their financial goals.

If necessary, help them consider prudent, incremental changes appropriate to their goals and risk tolerance. Above all, reach out to them frequently. You simply cannot over-communicate in a bear market.

2. Revisit your client service plan

You cannot control the market. You cannot control performance. You can control your client relations.

Are you delivering the finest service experience possible? Clients may be more forgiving in a bull market, since they tend to have fewer questions when times are good. But a bear market increases stress levels-and stress-tests your service plan. Analyze how proactive your service plan is, how often you anticipate needs and questions, and how quickly you respond. Failure to promptly return phone calls is one of the most frequent complaints voiced by investors dissatisfied with their advisors.

If your client service plan meets the test during tough markets, you will certainly be well positioned for the better times ahead.

3. Focus on business development

The reality is that given the significance and severity of the current bear market, your assets under management (AUM) will decline due to market returns and clients abandoning their strategies. Declining assets means reduced revenue. Unless you reduce staff (which may damage your ability to deliver the best client service), reduced revenue translates to reduced income for you.

Where will you look to replace lost AUM? According to the 2008 Moss Adams LLP Financial Performance Study of Advisory Firms, assets from new clients were responsible for two-thirds of growth in 2007. You need to step up business development efforts by getting in front of prospects and delivering the same message of clarity and leadership that you bring to current clients.

Begin by asking your most highly satisfied clients for referrals; they almost certainly have friends who are ready to seek new advisors. This is also an ideal time to network with fellow professionals such as accountants and lawyers for referrals.

Despite the bear market, there is still an enormous opportunity–one that may have actually increased in recent months–to capture new clients. Baby boomers are still retiring and taking control of their 401(k)s. They still want and need advice, perhaps more than ever.

But the opportunity extends beyond demographics. The financial crisis and the contraction in the industry have tarnished the Wall Street brand. The above-mentioned Prince & Associates study found that 90% of investors at large brokerages and banks plan to move at least some of their investments from their advisors; and 70% plan to leave their advisors entirely.

Independent advisors who articulate a clear message and proactively seek new business are faced with something they have not seen before: a level playing field.

Brian O’Toole, is CEO of Genworth Financial Wealth Management, Pleasant Hill, Calif. You may reach him at gnwwmmarketing@genworth.com