We have experienced a fair amount of market volatility during the past several months. It puts a lot of pressure on advisors because everyone is asking: What does it mean? Will it continue? Are we in a bear market? Should I sell everything?
These are the typical questions that arise with declines in the stock market. Often, advisors’ initial move is to reach out to clients with their viewpoint on the current market environment to reassure them that they are in good hands. Your technology as an important part of your communication strategy.
Emailing a market update is definitely the most common communication strategy used by advisors during volatile markets. The basic structure of a market update (and I have seen a lot of these type of messages lately) is fairly simple. Generally speaking, they include four to five main points and might also have charts or graphs of supporting data.
Considering the emotional impact volatile markets have on clients, advisors should consider using more personal methods of communication that can still be used with broad distribution tools, for example, a brief PowerPoint narrated by you. Simply hearing your voice, your inflection, tone, etc., in addition to the content shared, can be more meaningful than a standard email.
When the Dow is down 500 points or more in one day, remind clients of their long-term investment goals. This can be a challenge, especially when you know they may be ready to sell everything. Your performance reporting system should help you demonstrate to clients that their long-term investment performance and current asset allocation models are on track. You should be able to easily access your clients’ specific performance returns and their true financial net worth. In fact, many advisors now give their clients direct access to this information. This helps them understand their true position instead of what they might believe it is by simply watching CNBC.