No one admits to needing their hand held.
We think of very young children being taught the rules about crossing the street or elderly relatives needing support when walking. Needing your hand held is seen as a weakness.
When the stock market moves down sharply, everyone needs their hand held, even if they will not admit it. As their advisor, you need to hold their hand without saying that is what you are doing.
We think of handholding as necessary when the stock market is falling during the trading day. During the evening, the TV news reminds everyone of the damage done. You can see how handholding is needed at that moment.
Handholding is necessary at other times. These times require forethought and advance planning. The day the April account statements arrive in the mail will be a day handholding is required, especially if the stock market has not rebounded. The pain might have been felt earlier in the month, but it will be “brought home” when clients see the impact on their portfolios.
As their advisor, you want to be proactive. Back in 2021, CNBC reported 49% of investors check their stock portfolio online at least once a day. This means many do not. That 49% might have an online trading account, but not be giving their 401(k) balance or larger portfolio the same attention. When the April monthly statement arrives, they will be paying attention.
Ideally, you need to be calling them again shortly before that day. You could talk them through accessing the account statement online, while you are on the phone with them. This way, you can look over the numbers together before the physical copy arrives. The nightmare scenario you want to avoid is their statement arriving on Friday, May 2 or Saturday, May 3 and the client worrying about it, talking with their friends and calling you on Monday, greatly upset.
When you reach out, it is possible the client is frustrated or scared. It is also possible they understand that they are in this for the long term and are OK. They might have questions. You need to learn where they are coming from.
What does this mean? You might think calling and taking charge of the conversation is the right way to go: “I know you are scared. I have the answers.” But it will be better to see where they are coming from first. Plan on listening.
It's time for a Crash of 1987 story. That night, the phone rang when I was at home. It was my best client. I immediately took charge of the conversation, saying “I realize you are concerned, this is what our analysts think…”
He stopped me and said: “When I invest in the stock market, I realize I am taking a risk. I accept that. I was calling to see how you are doing on this difficult day.” I should have followed my own (later) advice and listened.
At the time of the crash, I thought of my clients and asked myself, “What have I done to these people?” Afterward, I realized I bought quality, dividend-paying stocks in good companies with strong management and long track records.
When something bad happens, a lot of people look for someone to blame. If the stock market is going down, that might be you because you are their “stockbroker.” They might be upset and you are the logical target for them to vent their frustration. You need to let them get it out of their system.
It may not be as bad as they thought. You have numbers. They have a balanced portfolio. It is likely the decline in their portfolio is not as bad as the indexes have suffered. Those indexes are 100% equities. This might be a glimmer of good news.
They want advice. That is what advisors do. This is when you share, in simple language, what your strategists and analysts are saying. You should also have a call to action. It might be as simple as “sit tight,” but there should be more to it than that. Although they might not follow your recommendation, they will remember you had proactive suggestions.
You should plan on checking in with your clients soon. It might be when the statement arrives. It might be a couple of weeks later. They should not feel it was a duty call or a “one and done” approach and they were a name checked off a list. They will remember you treated them as a market of one. They will tell their friends.
Finally, you have delivered a valuable and needed service by handholding. You can never call it that because no one ever wants to admit they needed their hand held.
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