While financial advisors can’t be expected to explain public health issues like virus contagion and replicating time, they should be able to simply explain the history of the market in recessions and specific down turns, like the Black Tuesday of the 1980s.
Advisors may be hearing a lot from their clients right now. They may be hearing anything from panic to frustration to rage to dejection. By March 18, 2020, the market had lost all the gains it had made since 2016. And it might not be just about the stock market. MSNBC reported that 1 in 5 Americans by mid-March of 2020 has experienced a job loss or a significant reduction in hours. So, with all that worry, what to clients most want their advisors to tell them? We did a round up of folks we know and trust and found the following themes.
The market will come back. Clients want to understand how the market will recover and when. They most want to understand how long things will take to get back to a more stable environment. When asked about financial hardships over the COVID-19 shuttering of businesses like restaurants and gyms, Governor Cuomo recalled the Italian adage of a rich man being blessed by health. That is, time will heal this market because it has in the past. While financial advisors can’t be expected to explain public health issues like virus contagion and replicating time, they should be able to simply explain the history of the market in recessions and specific down turns, like the Black Tuesday of the 1980s.
Many clients may have questions about how much the current administration can improve the stock market. Explaining the proposed policies and how long they may take to implement can help answer these questions. They may also want to hear about how businesses respond or reject to administrations that are unpredictable or chaotic.
Don’t Look. Just as it’s nearly impossible to follow the public health advice to not touch your face, it may be nearly impossible to not check your portfolio. While it’s impossible not to do, clients may need the reminder to reduce the amount of times they look at their portfolios. Clients may need to look, and those who’ve lost their jobs or may be facing a long furlough may need to rebalance their accounts. But the reward of checking a portfolio multiple times a day is probably low.
Don’t Dump the Stocks. Clients with anxiety over the market may feel like taking some action, any action, right now will “fix it.” However, fixing it may be flubbing it. Clients may need to be reminded of why they have a specific mix of stocks and bonds. That reminder might need to happen every week or even multiple times in one call.
Breathe. Many clients may associate money with other things, like safety and responsibility. As we wrote last month, money brings up issues of vulnerability. And the less clients understand about an element of investing, the more they may feel vulnerable about it. Money also brings up feelings of safety, and for many, this fear may be well founded. These clients may not be able to work through changed budgets as they may be too scared.
Time is on Your Side. Many clients may feel that they are losing time. Some may even feel that because they took money out of a 401(k) in their 30s to assist in a housing crunch, that they’ll never be able to retire. These clients may benefit from a refresher on catch up plans, HSAs, and IRAs. But more than anything they may need to hear that they have time to catch back up on any losses in the market.
Before leaping into the unknown, we recommend a thorough examination of your plan. Because we are experts in the field, we know the marketplace and know what your existing vendor is capable of offering. Through this examination, we can help you optimize the service you receive.get xpress proposal