Keeping momentum during a crisis

By Wouter Fourie (CFP®)
CEO of Ascor® Independent Wealth Managers

It has certainly been a tough couple of months for both financial advisers and their clients.

The time locked in at home drove many customers to the Internet and social media for guidance on what the future will hold. There they were met with a barrage of bad economic news, public panic, armchair commentators on social media, and the inevitable stream of contradicting advice – which they were left to stew over in the confines of their homes.

In my conversations with colleagues, this toxic mix of time, turbulence and terrible information led to panic among many clients and it forced financial advisers to double down on the reasons for their chosen investment strategy for the person on the other side of the phone.

In our practice, we have monthly digital check-ins with every client, so the frequency of panicked calls is very low. There are, however, a couple of actions you can take if you have been overwhelmed by panicked clients.

Show understanding

It is important to understand what is at the heart of any panicked client call. People are uncertain and this leads to panic about their future. It remains the financial adviser’s primary job to calm their fears by addressing their uncertainty.

By empathising with panicked clients, before you give advice and hopefully tell them to stay the course, you create rapport and prevent them from feeling that you are talking down to them or that you do not understand their situation. This will, in turn, increase the chances that they will listen to your advice.

Communicate, communicate, communicate

You may feel, like I often do, that every market panic or political scandal is the same story, dished up at a different time. But to your clients, who are engrossed in their own minutiae and life dramas, this is very serious.

We try to remind clients at the first sign of panic why and how we chose their personal investment strategy. We also share examples of past crises and how people who pulled out of the market lost out on most of the subsequent growth, thereby compounding their losses by moving when their investment was worth less and trying to buy back into the market at a higher rate.

We will return to this point at the end of the article.

Pre-empt the panicked call

In step with the previous point – a short BCCéd mail to all your clients that shows them you are on top of things or a quick call to that needy client that you know is always worried about his/her retirement may save you many hours in later consultations or many thousands in locked-in losses for those panicked clients.

You may also want to check in with those same clients, or send a note, after the panic has subsided. It should never have the tone of an “I told you so” reprimand, but rather serve to inoculate your clients against similar panic when the next inevitable crisis happens.

As an aside, it is clear that the rate of market panic events is increasing as more people are plugged into global news sources and are therefore exposed to events across the world and the often ill-advised financial columns that predict doom at every turn.

Keep track of trends and calls

Let no good crisis go to waste. Use this time to track the concerns you received at the start of the panic and how the market has played out afterwards.

There is no better argument for staying the course than referencing the most recent past event and how it would have impacted on your client’s investment if he or she did the rash thing that is now being proposed in this crisis.

This is also an excellent way to justify your investment strategy in future and to emphasise to current and new clients how important independent financial advice is.

Market and cross-sell

It is true that selling additional products or pushing for greater representation of your client’s portfolio may be a bit tone-deaf during a crisis. Perhaps you do not do it during the first panicked call or even in your communication to your entire client base.

But when reviewing your time sheets and calls, it may become apparent that some clients are simply more easily spooked than others. Could you perhaps help these clients by offering them a product that would put their minds at ease, such as additional life insurance or an income protector?

At the same time, you could use this increased level of contact (remember the point about communication) to grow your pipeline of prospects and products to existing clients. Did the panicked client receive his or her advice from an equally panicked colleague or neighbour? Could you assist the latter with some advice?

We also make a point of marketing our industry affiliations during this time. We are proud members of the Financial Planning Institute (FPI) and use every opportunity to highlight the external validation and additional protection that our CERTIFIED FINANCIAL PLANNER and FPI Affiliation gives us as financial planners and our practice, Ascor® Independent Wealth Managers.

It may sound trite to paint every crisis as nothing to worry about and rather as an opportunity to cement client relationships and grow your book, but trust me, as a veteran financial adviser I still find it much more difficult to grow my business when all is going well, the economy is growing and no-one sees the immediate need for financial planning or for preparing for the unexpected.

In closing, we should acknowledge that we are not above all the current economic, social and political turbulence. A bit of self-care never hurt and you should do what is necessary to help you maintain your drive and energy and the level of optimism needed to keep your business going.

Having said that, use what is left of this current crisis to touch base with clients, set their minds at ease and perhaps even market additional services. You will find that this will help you to stay the course and keep momentum and your clients will thank you for it.

Read more about Ascor® Investment planning

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