Show Up When Investor Confidence Falters – Episode 48
A recent CEG Insights Wealth Confidence Report showed that investors with a net worth of $1 million or more are down in the dumps. But even worse, the Report also shows that far too many advisors aren’t bothering to reach out to their clients at a time when those clients need your perspective, insights and reassurance.
Failing to support clients in today’s environment—or in any environment in which investor confidence falters—puts those relationships, and your success, at risk.
The upshot: Make sure you’re “showing up” for your clients when uncertainty is high. Here’s how to do it.
Trying times
According to the latest Wealth Confidence Report, confidence among investors with $1 million to $5 million was—on a scale of 0 to 30—at a level 3. They’re reduced their equity exposure and gone into protection mode, with an average cash position of 35% (versus a more typical level of around 15%).
Clearly, there are plenty of reasons for advisors to reach out to clients today. And yet, the Report also found that around 20% of advisors simply haven’t done so within the last 30 days.
The fact is, you need to show up in your clients’ lives right now—and, indeed, any time that there is uncertainty and turmoil in the markets and the economy. Consider that approximately 40% of investors say that hearing from their financial advisor during volatile markets makes them more loyal to that advisor.
How to show up
Cathy McBreen, managing principal of wealth management research at CEG Insights, recommends that client outreach in today’s environment focus on three areas:
- Shift the lens. Right now, clients are confronting short-term volatility and uncertainty. You can’t change that. But you can reorient them back toward their long-term goals and the plan you’ve put together to help them achieve those goals. This type of perspective might very well reveal that the recent ups and downs haven’t impacted their long-term situation at all.
- Give clients permission to feel uncertain. Let each client know you’re checking in with them because you realize that investors can feel uneasy in times like these and you want to know how they’re doing. Sending the message to clients that other people just like them may also be nervous makes them feel better about their own concerns and uncertainty.
- Offer a clear action step. Even in uncertain times, there are smart actions to take. Maybe it’s locking in a gain or booking some taxable losses. Perhaps it’s updating an estate plan. If you can propose one action step that is in the client’s interest, they’ll feel like they’re more in control of their financial lives and that they’re still moving forward toward their goals—even if the markets are backsliding.
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