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Technology > Investment Platforms > Robo-Advisors

Should You Call Clients When the Market Tanks? Of Course!

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Recently, I read an article addressing points of view concerning advisors calling clients when the stock market suffers a sharp decline. Here’s my opinion. Of course you call the client. You call every client.

You prepare for the call beforehand. You anticipate their concerns. You have facts and firm research at hand. Let’s assume you know how to do all that.

Here’s why you call:

    1. I’m on the case. The call you make, even if you left a message conveys: “I know what’s happening. I know you are concerned. You are an important client to me.”
    2. Robo-advisors don’t call. People have argued robo-advisors are the low-cost alternative to human advisors. “They do what you do at a fraction of the cost.” But they don’t hold hands.
    3. Competitors. Your clients know other advisors socially. They want your client’s account. Your client explained they work with you. A popular approach has been: “When was the last time you heard from your advisor?” This is followed by “In times of market volatility, we try to contact every client…”
    4. Am I that unimportant? Clients assume you are meeting, Skyping calling or otherwise communicating with your best clients in real time. Not getting a call or personal contact gets them feeling taken for granted, that you feel they don’t need any attention.
    5. Losing hurts. Psychologically, clients seem to measure losses from the “high-water mark.” Losing money has more of a negative emotional impact than making the same amount.
    6. They want answers. They don’t know why a world crisis should suddenly financially impact the strongest and largest economy in the world, the one many investors around the world consider a safe haven. They need an explanation.
    7. Cable TV news tells them to be very afraid. They want you coming back and watching longer. They find people with incredibly grim “What if” scenarios. They put them on-air.
    8. Pressure builds. It’s a Friday. They see their friends. They hear doom and gloom talk. There’s always someone in their crowd who is perennially pessimistic claiming “I predicted this would happen.” (FYI: A broken clock is still right twice a day.) They bottle up the pressure until 9:01 a.m. on Monday when they call you.
    9. They want proactive advice. Hopefully everything eventually gets back to normal. As a “Monday morning quarterback,” they see this in retrospect as a missed opportunity. “You should have called and told me to do something!”
    10. Who controls the narrative? It might be one of their friends. They make the decline sound obvious. “Your guy should have done something.” They report the news as they see it, which might not be entirely correct. Their friend is explaining what happened and why you were at fault. You are cast as the villain in the story.

No personal or advisor stories this time, just the message: “If ever people really want to hear from you, it’s when they need you.”

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