10 Reality Checks for Overly Optimistic Clients

We’re all familiar with an endless summer. When things are going well, you wish the good times would last forever. It is also easy to believe it.

You may have heard that “Wall Street climbs a wall of worry.” There is enough to be concerned about in national and global news. With erratic weather, warfare in several parts of the globe, politics, inflation and interest rates, it’s easy to think that Wall Street has a high enough wall of worry to climb, so everything should be fine. It rarely works out that way.

What happens when clients think the good times will never end? They take on more debt, assuming that their bonuses at work will continue growing. They assume that their good health is a given. They take on more risk in their portfolio, tied to the investing expression, “Everyone is a genius in a bull market.”

There is another saying about the role of the Federal Reserve: “Take the punch bowl away just when the party is getting good.” When times are good and everything seems to be going your way, people do not want to hear about things that might disrupt the status quo.

Even if you feel like one of the prophets of old delivering news that people don’t want to hear, it is good to discuss these points. If things keep getting better and better, your clients might think you were protective and prudent. If things go south, you were sounding a cautionary note.

Either way, they will see that you were proactive and looking after their best interests.

See the accompanying slideshow for 10 questions that clients might want to avoid but should at least be asked and put on the table.

Bryce Sanders is president of Perceptive Business Solutions Inc. He provides high-net-worth client acquisition training for the financial services industry. His book, “Captivating the Wealthy Investor,” is available on Amazon.

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