The last few weeks have been plagued with unsettling news about the markets and the economy, ranging from debt ceiling concerns to 500-plus point drops in the market. This uncertainty and volatility presents a challenge to advisors on how and when they should communicate with clients about these events. Advisors must weigh what truly affects their clients versus what is just media hype. In my experience, I have encountered two perspectives from advisors about addressing breaking financial and economic news with clients:
Those who believe there is always a crisis-of-the-day (e.g., flash crash, Japanese earthquake, debt ceiling) and that addressing each of these events is not necessary. After all, this crisis will certainly pass and there will be a new crisis tomorrow. These advisors feel that their clients hire them to manage their money by making rational, long-term decisions and not reacting emotionally to the day’s events-so it should remain their burden and not their clients’.
Those who believe it is important to address newsworthy events so that clients remain calm. Clients are hearing varying opinions about the markets and the economy from the media and the people around them, so it is important that they hear the thoughts of the person managing their money.