Coaching Clients Through Market Volatility and Uncertainty

Markets these days aren’t for the faint of heart. The highs shoot up like a rocket, the lows seem deeper than the bottom of the ocean. Movement between the two extremes is so sharp it almost gives you whiplash. No wonder so many of us are keeping a big supply of Tum’s handy!

Like it or not, volatility is part of investing. We knew that when we entered the wealth management profession and such instability is still nerve-wracking for us. So imagine the anxiety among the people whose wealth we manage. A good many of them are tossing and turning at night. And economic forecasts strongly suggest more turbulence to come.

As financial advisors, we must master many skills. We have to stay on top of developments both in the news and in the markets. We must continually monitor technology trends for new software that can give us an extra advantage. And, perhaps most importantly,  we must learn the art of soothing jittery clients.

Your instructors may not have covered this in college, but helping your clients navigate their emotions—especially during times of wildly unpredictable market volatility—is one of your prime responsibilities.  

Uncertainty produces volatility, and volatility breeds fear and anxiety. Which explains why there’s a lot of nail-biting going on right now. In times like these, clients rely on both our financial knowledge and our ability to soothe their nerves.

In my experience,  simplifying the complex goes a long way toward easing a client’s mind. Strip away the financial mumbo jumbo and explain the situation in everyday English. Or, as someone once called it, “Putting the hay on the ground where the goats can eat it.”

Your clients are bright people. They grasp conditions once they are laid out in plain language. That alone helps demystify an intimidating situation and bring it down to size. Fear magnifies perceived threats and makes problems appear bigger than they are. Factual information shrinks them back to their proper perspective.

As leadership expert Dave Coffaro puts it, “It feels really uncomfortable to pick up the phone and say, ‘Hey, how are you doing? Let’s talk about where you’re at, let’s talk about your portfolio,’ and things like that. That’s where we have to think about what it’s going to take from the client’s view to feel relevance and be meaningful to them.” 

And while some younger clients look to computer analysis to help them decipher what’s going on, Wealth Enhancement Group’s ’ Patrick Bobbins says analytic software won’t be replacing you anytime soon. “I think there’s going to be more and more demand for our services. You’ve got aging Baby Boomers, but you’ve also had this move to robo (advisors) for some of the Millennials. So, if we’re at peak earning or peak market and you enter into a correction, those people who sell out at the wrong time probably realize they damaged themselves and they’re going to seek a human for advice.”

Because you play an important ongoing role in the client’s affairs, you are uniquely positioned to support them emotionally when the markets go off-kilter. You can provide them with the information they need to confront their fears head-on. You can help them understand that staying on the path they created before the dark clouds rolled in will still help them eventually arrive at their goal.                

You and I know the markets will eventually stabilize, and things will get better. We don’t know when that might happen, but we do know the result will most likely be a return to some degree of prosperity. That is the cyclical nature of our economy.

Holding your client’s hand and guiding them through the tough times isn’t fun. But remember, this time isn’t fun for them, either. You are uniquely positioned to help them weather the storm and reach better days ahead.