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Life Health > Annuities > Fixed Annuities

Financial Professionals’ Worst Habits During Volatility

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What You Need to Know

  • What many clients most want in a crisis is you.
  • In 2008, 68% of survey participants said accessibility was the most helpful advisor trait.
  • Today, 90% of consumers say they want to act to improve their finances in the next three months.

Just like any relationship, working with a financial professional is a true getting-to-know-you process: the introduction conversations, sharing risk tolerances and divulging investment and financial information. Partnering with a financial professional leans on building trust and can have huge positive impact to an investor’s financial future.

This is why a majority of investors work with a financial professional — and the number is growing. According to a recent survey, two-thirds of investors surveyed currently work with a financial professional; among those who are unadvised, a third are seeking the help of a financial professional.

Yet, as time often reveals, true partnerships are tested in times of trouble. When markets are down and investments seem belly up, the strength of a financial professionals has nothing to do with products; it has everything to do with the value of advice.

The best financial professionals will take action to stabilize instability for their clients — but the worst will not. Here are the top three things the worst financial professionals will do during volatility, and how they can flip the switch to provide clients with best-in-class service when the going gets tough.

1. They don’t proactively pick up the phone.

Clients are not just in need of financial advice in times of crisis; they’re looking for connection. The worst financial professionals will stay quiet during volatility, waiting for clients to reach out for help. Instead, it’s best to reach out to clients proactively, providing support and solutions and, most importantly, an empathetic listening ear.

For example, during the Financial Crisis of 2008, when asked which of their financial professional’s behaviors were most beneficial, 68% of respondents cited accessibility, underscoring the importance of keeping open lines of communication with clients and proactively contacting them during the most volatile times. Being proactive is the differentiator.

Empathetic communication and proactive outreach will help clients weather the current instability and strengthen the relationship well into the future.

2. They don’t share the data.

While trust between a client and financial professional is crucially important, financial advice is so much more than “take my word for it.” During volatility, financial professionals should lean on industry data and historical trends to educate their clients on “why” behind their approach and reassure based on the facts. Diverse resources exist to help financial professionals conduct data-based educational conversations with their clients, including those provided by the Alliance for Lifetime Income.

Through broader education, a financial professional can demonstrate their deep value as a trusted advisor and strategic counselor in financial wellness, as well as empower the client to engage in more robust financial conversations.

Armed with industry and historical data, financial professionals can help clients navigate through the present environment, while continuing to educate and focus on the future. Challenges are and always will be a natural part of the market, but the short-term intensity doesn’t have to define client outlook.

3. They don’t take action.

As the markets evolve, inflation rises and interest rates rebound, growth is down. The former “gold standard” approach for portfolio allocations are shifting — the time is now to act on behalf of clients.

Encourage clients to take action by rebalance their portfolios and reallocate their assets, now and quarterly going forward. These actions will continue to protect and grow their assets despite the instability.

In a survey from Lincoln Financial, 90% of the participants said they would like to take action to improve their finances in the next three months.

Solutions that can offer downside protection, like indexed annuities, can help clients feel reassured of their retirement income security and can be leveraged to appeal to different kinds of client perspectives. Through careful listening and questioning, financial professionals can help guide clients towards an approach that best suits their comfort level while also leaning into the potential opportunity of a down-market.

Market volatility, geo-political events, inflation — it can feel like each day brings a new crisis. Financial professionals are, believe it or not, humans just like the rest of us and can feel the stress of these circumstances alongside their clients. Yet, the best financial professionals know that economic factors provide the opportunity to share information, calm concerns, and build trust — and that brighter days and booming markets are often just a few quarters away.


Tim Seifert (Photo: Lincoln)Tim Seifert is senior vice president and head of Retirement Solutions Distribution for Lincoln Financial Distributors.

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