Financial markets will experience downturns. It’s inevitable. And whether there’s a one-day selloff or multi-quarter recession, market declines become a huge headache for advisors as they’re besieged by calls from concerned clients. You’ve probably been there as an advisor, trying to explain to a worried or frustrated client why they don’t need to panic. You’ll remind them of the long-term strategy that you put in place, but they still urge you to sell. It can be a never-ending battle.
Last December, as the S&P 500 dropped nearly 300 points during the week and a half leading up to Christmas and wiped out gains for the year, I was struck by the contrast between utilizing a turnkey asset management platform (TAMP) to its full potential versus only partly leveraging the technology, or not using one at all. At the time, I was in the car with an advisor who avidly used a TAMP and we were on the way to see one of his clients.
As we listened to news about the market’s steep decline, I asked if he needed to get back to the office or call other clients. He said, “Not at all, we’ve planned for this and spent a lot of time laying the groundwork with our clients. We use the TAMP-provided marketing materials to educate them, so they know to expect market volatility and maintain a long-term perspective. I’ll certainly take the call if someone wants to reach me, but there’s no reason for them to be concerned.”
Building a Foundation
As confident and secure as that advisor felt, I also fielded a couple of calls during that drive from other advisors who were worried and asking what they should do. This dichotomy illustrated an important point. While outsourcing to a TAMP enables you to be more responsive during turbulent time periods, if needed, it’s still important to leverage the platform’s full scope of resources, as well as the multitude of dedicated professionals behind that technology.
TAMPs are more than just a dashboard of client portfolio breakdowns. You can help clients build a solid financial education by utilizing the extensive collateral and talking points that a TAMP provides to advisors, as well as the portal that it offers for third-party strategists to provide marketing information and fund fact sheets. So if you currently use several different money managers, as many advisors do, a TAMP could become your single repository of information with abundant useful and educational content that clients can turn to.