There was no shortage of news stories in 2015 that had the potential to induce a certain amount of fear and anxiety in investors. How many times have we discussed rising interest rates? Stock market volatility is an ever-present topic of conversation in the financial world, and global events, such as the attack on Paris not long ago, are unpredictable and impactful.
These kinds of happenings can be stressful and scary, and they can certainly affect our financial health. What exacerbates the situation is the 24-hour news cycle and the readiness of the media to report on the crisis du jour. Positive economic trends are often overlooked by the media, and in fact only eighteen percent of economic news is viewed as ‘good news’ by the public. Financial advisors may be finding themselves in the position to provide their clients with advisor therapy, acting as a sounding board for their financial fears and finding ways to alleviate their anxieties and prevent them from making irrational, impulsive financial decisions.
To better reach and get through to your clients who are expressing such fears, I tell advisors to remember the three Cs: caring, coping and in command. Show your clients that you are in the trenches with them, ready to be proactive and walk them through the ups and downs. Work with them, not just for them. Be sympathetic, listen to them and be prepared to respond to their fears in a positive way. Here’s how:
1. Engage them in conversation. Talk to your clients about other, more positive current events. Ask them about their family and friends, or get them to tell you about their hobbies and interests. The idea is to remind your clients that there is still cause for optimism, and that there are many bright spots in their lives on which to focus. A good way in which to do this is to use what we call the rule of –ates, which means getting your clients talking about where they were educated, where they recreate, where they congregate and where they donate both their money and their time.
2. Focus on the future. There may be a lot of negative news stories, but the problem is that those stories overshadow all of the other, positive news that still exists. There is so much going on that points to remarkable future themes. Think about 3D printing, for example, and the possibility that we could soon see bones and organs being reproduced with this technology. Technology is always finding new ways to bring together families that live far apart, and inspiring medical advancements continue to be made. Do a little research on those kinds of stories, and bring them to the attention of your anxious clients.
3. Become an engaging educator. Rather than letting your clients ruminate on the bad news, turn it into a learning opportunity. Provide them with resources that will help them understand market corrections and how various current events can impact them. Don’t let them worry about the what-ifs. Instead, teach them through why you are or are not making certain changes to their portfolio. Let them in and give them the information, so that they can be better informed and understand your reactions—or lack thereof—better.
4. Facilitate action. At the end of the day, your clients want to feel assured that you are on their side, acting in their best interest, and doing something to help them. They are looking to you to lead them through the tough times. Listen to them, find out what their biggest fears are, and be proactive when the need arises. Reach out to them regularly, especially when a new story comes out that you know might make them nervous. Show them through regular touch points—via phone call, email, text or otherwise—that you heard them and are on top of things for them.
We all worry—it is human nature. We may not be able to stop clients from worrying about current events and their financial outlook, but we can take steps to address and alleviate those concerns. In doing so, we can better serve our clients and can establish a strong, long-lasting relationship with them as well.