5 Strategies that Can Help Calm Clients During a Crisis

Mar 23, 2020 / By Debra Taylor, CPA/PFS, JD, CDFA
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It is imperative that financial advisors take the time to calm concerned clients during this financial crisis. Although tackling this worry during a worldwide pandemic is difficult and unprecedented, these five strategies will help you bring your best to tough conversations.

Understandably, the coronavirus is making clients (and their advisors) incredibly nervous. This information is not surprising, especially given that the stock market has recently seen days with the biggest drops and surges in a decade. Many financial advisors are either calling out or receiving calls from their clients in such a turbulent time.

It is in times like these that you earn your keep as an advisor, so here are some thoughts to keep in mind during these all-important calls. Below are five strategies that we typically employ (and that have been recently discussed by Messrs. Carl Richards, Daniel Crosby and others at Merrill Lynch and the Wells Fargo Investment Institute) and will help calm clients throughout the coronavirus crisis.

1. Respond to each call in an individualized, authentic way

If your clients are calling, it means that they are likely fearful and afraid. Carl Richards, a certified financial planner and author of The Behavior Gap, reminds advisors that “This is our job, being the release valve for other people’s uncertainty and anxiety.” Richards encourages advisors to begin the call by first thanking clients for calling and expressing your empathy for their situation.

Richards also discourages advisors from listing facts and mentioning obscure charts throughout calls with clients. Instead, respond to each call in an individualized, authentic way. Advisors must listen actively to clients. To get to the “why” of the call, ask for more information and draw out their specific concerns. And remember that often the “why” behind the call is a concern about whether their lifestyle or goals will be seriously impacted.

If you have done financial plans for your clients (which you certainly should, precisely for times like this), then offer the reassurance that they are looking for, even if they don’t know how to ask for it. Remember, this may be your tenth, fifteenth, or fiftieth call with a client today, but you need to ensure that every client feels heard and understood. And if worse comes to worst, sometimes the best way to calm them down is to offer to prepare a plan, if they don’t have one already, which will help to demonstrate their path to success.

2. Reach out to anxiety-prone clients

Every advisor has certain clients that are more anxiety-prone than others. They are the clients that log in the most often to client portals and reach out the most often with portfolio concerns. If those clients have not reached out to you, then seriously consider reaching out to them first.

We have a segmented list of clients that we run through, reaching out to the most vulnerable and largest clients first. It is important to be proactive in this situation, as they are likely thinking of their portfolios and thinking of you and wondering why they haven’t heard from you. Remember the Golden Rule, and don’t get so caught up in the day-to-day that you forget to block out a few hours to call your most valued clients.

Moreover, you are unlikely to take any nervous clients by surprise with your call. From school closings to restaurant shut-downs to grocery stores emptied of hand sanitizer and toilet paper, things are not normal. You would be hard-pressed to find a client that has not been affected in some way by the coronavirus. It is safe to assume that all of your clients have read the news and feel uncertain about current events. To help assuage their fears, contact your clients first and tell them that you have been thinking about them and want to check in.

3. Put this bear market in perspective

In case you need them, have your facts ready (see the seven key points here). Make sure that you have your client’s returns in front of you, and not just the “what” but also the “why.” It may never come up in the call, but be ready when it does, as sometimes clients will want to dig deeper to understand and you want to be prepared.

Although things might look bleak right now, it is important to remember that things eventually will turn around. More specifically, history tells us that there is a light at the end of the tunnel regarding the rise and fall of bear markets. Daniel Crosby, chief bevarioral officer at Brinker Capital, notes that average annualized equity returned 9.6% before a 20% market drop. However, after the 20% market drop, there was a 12% annual return over the next five years.

Remind clients that if they experience the risk of a bear market, they should also stay and experience the reward. In addition, and further to this exact situation, markets experience an average 8.5% rebound within six months and a 17% rebound within 12 months of an epidemic. If clients do not stay the course, they run the risk of pulling their money out at the bottom of the market and locking in their losses.

4. Create calming content for clients

Experts suggest curtailing your weekly email report on the markets in lieu of a more personal approach to outreach with clients. While in-person meetings are not currently an advisable strategy for connecting with clients, there are many other ways to get face time with your clients. For example, we have scheduled a Friday “Coffee Chat” with clients where we will discuss our thoughts and provide an opportunity for Q and A. We have also been sending ad hoc announcements to clients updating them on our thoughts (and not so much about market data).

In addition, experts suggest that making and sending videos to clients can make a big impact because it lets clients see and hear you. Advisors can make videos to communicate in a calming way with clients en masse. Videos can easily be used to emphasize the relationships you have with your clients and remind clients why you are their advisor.

Also be prepared to share other helpful information with your clients, as no one else is. They are likely not hearing from their attorney, tax preparer or doctor in any meaningful way. Act as a resource in any way possible. Share with them information on CDC-approved cleaning agents, helpful charts so they can follow the epidemic, how to make sure their vital documents are in order, and whatever else can inform and calm them during this time.

5. Take a second for yourself

At the end of the day, you cannot calm clients if you are in an extremely panicked state of mind. Therefore, remember to value your own physical and mental well-being throughout this tumultuous time. Consider going for a walk or a run to lower stress, improve your mood, and increase cognitive function. Apps such as CalmKeeper and Calm can assist with quick, guided meditation and sleeping with the goal of relaxation. Regardless of how you choose to take care of yourself, it is important to prioritize your own health in these difficult times.

In conclusion, it is imperative that financial advisors take the time to calm concerned clients during this financial crisis. Although tackling this worry during a worldwide pandemic is difficult and unprecedented, following the five strategies above will enable you to best communicate with your clients. This situation has the potential to be a defining moment in the relationships that many financial advisors have with their clients. By working hard and smart for your clients in the upcoming months, you have the ability to further strengthen the bond between yourself and your clients for years to come.

Debra Taylor, CPA/PFS, JD, CDFA, is the principal and founder of Taylor Financial Group, LLC, a wealth management firm in Franklin Lakes, N.J. Debra has won many industry honors and is the author of My Journey to $1 Million: The Systems and Processes to Get You There, a book about industry best practices. She is also a co-creator of the Savvy Tax Planning program.

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