Distraction-Proof® Advisor Ideas

If there was ever a time to clarify the value you bring as a financial advisor to your clients, it’s right now.

Happy New Year!

Wow, we’ve seen incredible volatility in the markets over the last couple of weeks, which creates amazing opportunities for some great conversations. This is where no robo can do exactly what you’re about to be able to do, which is provide value and clarity for your clients and also prospects.

You want to have go-to verbiage and analogies set and be comfortable with explaining what’s going on either to clients or especially to prospects.

I love the analogy of flying and relative to encountering turbulence. Airline pilots come on the PA system pretty early on in the flight and let people know, “Hey, there’s a possibility we’re going to encounter this.”

You should have done that also when you’re bringing on new prospects on board to be clients by letting them know, “Sometimes while we all want markets to just continue going up smoothly, often times that’s just not the case. So when you hear pilots mention that we’re experiencing some turbulence; it’s not enjoyable, necessarily, ladies and gentlemen, but we’ll have you at your destination as soon as we can, it presents the long-term objectives, it keeps them up front, and it helps up all just relax a little bit knowing that somebody is noticing with what’s happening, they’re empathizing with us, and we’re still heading toward where we want to get to eventually.”

Again, you should have set these expectations when you were bringing this client on board, letting them know this is a reality when you’re investing in equities. Make a point of educating them. Right now we have the situation with Brexit that is providing a little bit of uncertainty. We have a trade issue going on with China. We have the Fed changing some of their policies and tightening things up a little bit. So there are a number of issues that are feeding into this turbulence that we’re experiencing. Clarify that to your clients.

Make sure your staff, your team, are all messaging the same. You want everybody on the same page with how they’re communicating to your clients so that they’re understanding that you all get it and you’re all knowing what’s going on.

When you hear somebody liken investing in the markets to gambling, push back on this. This is a wonderful opportunity to clarify investing in the equities market and gambling are two different things. Casinos don’t lose money. Casinos, as we know, as it’s said, “The house always wins over the long haul.” That’s exactly what casinos do – they’re set up to take people’s money. That is not the case with the equities market.

Dalbar just published their 2017 study and researched facts about investor behavior. As they pointed out, over the last thirty years, the equities market has gone up over ten percent year over year, or averaged a ten percent growth rate year over year. That’s over thirty years! That’s nothing like a casino. If you participated in that market over that period of time, you’ve seen those respective growths.

Interestingly, Dalbar also points out the average investor only experiences less than four percent of that growth. Why? Because they let emotions get in the way. You, as the advisor, have to help keep them on track.

So, again:

1. Make sure you are messaging to people accurately and coherently what is happening with the markets.
2. Make sure your team is on the same page: everybody is messaging the same.
3. Let clients know, “You’re in the right place. We’re watching what’s happening. We’re under control. We’ll communicate as need be. Let’s stay focused on the long-haul and just keep going. It might not be pleasant every day, but we’re looking for the long-term objectives down the road, and we’ll get there following this track.”

I look forward to bringing you another Distraction-Proof Advisor Idea next week.