Sponsored Content–For Advisors Today, Volatility = Opportunity

Paul Lofties, CEG Worldwide

Co-host, The Preeminent Financial Advisor Podcast

Cathy McBreen, CEG Insights

Co-host, The Preeminent Financial Advisor Podcast

Key Takeaways:

• Too many advisors aren’t reaching out to clients about the confusion and volatility in today’s market.

• Offer reassurance and leadership to clients now, and they’ll reward you with loyalty and assets.

• Attract new prospects by showing you’re one of the advisors who proactively helps clients navigate the uncertainty.

The levels of confusion and volatility that advisors’ clients are experiencing today are off the charts. High inflation that hasn’t been seen in decades, rapidly rising interest rates, concerns about the health of the entire banking sector, the ongoing war in Ukraine—the list goes on and on. Many investors—particularly younger ones—have never had to deal with so much uncertainty and how it could impact their financial lives.

For advisors, this confusing environment spells opportunity—the opportunity to deepen relationships with existing clients as well as attract new clients in need of advice and leadership.

Face The Facts

Unfortunately, CEG Insights research reveals that far too many clients of financial advisors say they aren’t getting the guidance and help they desperately want from those advisors. For example:

• Fewer than half of advisors—45%—have recently reached out to clients to get them more involved in the investment process, even though around 65% of investors say they want to be involved on a regular basis.

• Just 59% of advisors have reached out to clients to discuss market volatility. (In today’s environment, that should be close to 100% instead.)

Given this level of outreach, is it any wonder why 28% of investors with $1 million to $5 million in investable assets currently rate their advisors as neutral, fair or poor?

The good news: CEG Insights research shows that advisors who do take these steps can see powerful results.

• 8% of clients whose advisors got them more involved in the investment process gave the advisors additional assets—while 10% said it deepened their relationship with the advisors.

• 7% of clients whose advisors discussed market volatility with them gave the advisors additional assets—and 12% said it deepened their relationship with the advisors.

Insights Into Action

Clearly, it’s a great time—a crucial time—to reach out to clients about today’s uncertainty and engage with them. Here’s how to do it:

1. Give clients the opportunity to be heard. Check in with clients specifically about the recent volatility and uncertainty. When you do, give them permission to express how they feel about it and listen to them. During rough patches, clients might be nervous to share their true underlying feelings. So, it’s important to give clients some framing when you check in during periods of volatility. Say something like, “Hey, I’m calling because markets have been extremely volatile lately, and inflation is really causing some issues, and that’s causing a lot of clients to feel uncertain and anxious. So, I wanted to check in and see how you are doing. Do you have any questions?” That helps facilitate an honest conversation and demonstrates that you care about your clients’ best interests.

2. Offer reassurance and leadership. In periods of uncertainty, clients want to know how the volatility affects them, how they should behave and the right actions for them to take. They want to know that you’ve seen this before and you know what to do—and not do. Be clear that volatile or down markets always pass. And, importantly, bring the conversation back to each client’s personal situation—their specific plan and goals, and what the current environment means for their lives.

3. Go on offense. The CEG Insights findings above highlight that many investors today aren’t getting the guidance they need from their advisors. Ask your top clients, centers of influence and others who are important to your success if they know of anyone who might benefit from meeting with a proactive advisor like yourself who can give them much needed clarity they may be lacking. Asking for introductions or offering a second-opinion service can be especially effectively in today’s cloudy environment.

Ultimately, high-net-worth clients will gravitate to those advisors who really know how to show leadership and provide the communication that the research says that the affluent want. Take steps today to ensure that you’re one of those select advisors. Listen to the full episode here.

Catherine McBreen and Paul Lofties are leading innovators in wealth management research.

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