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July 08, 2021 at 02:47 PM
You know how this goes.
Markets decline, account values drop, clients get nervous, call you for advice, and now it is up to you to provide comfort and reassurance. What do you say?
You probably have some well-rehearsed words of wisdom, but here is my question. Are those soothing, comforting words even true? And do you have any idea what a savvy client might be thinking when you say these things out loud?
Here are some common comforting phrases that we all have probably used in some form or another in our careers (and hopefully never will again).
1. What We Say
“It’s just a paper loss.”
What Our Client Thinks
“Well, I think ‘paper loss’ means I just lost a lot of money. By the way, you never told me not to get excited when my accounts went up because it was just a ‘paper gain.’”
2. What We Say
“Stocks will outperform in the long run.”
What Our Client Thinks
“Outperform what? CDs? Bonds? Real estate? Commodities? Everything? How long is the long run? Will I be able to enjoy that performance? I would like to know because the truth is, in the long run, I’ll be dead.”
3. What We Say
“Now is a good time to buy.”
What Our Client Thinks
“Really? It does not seem like you recognized a good time to sell. How can I be sure you recognize a good time to buy? Has there ever been a single day in your entire career that you did not accept money from a client because you thought it was a bad time to buy?”
4. What We Say
“You cannot time the market.”
