When markets are volatile, clients are anxious — financial uncertainty is difficult for some to endure. Often, these periods of uncertainty try everyone’s patience. However, employing strong relationship management skills and effective communication can keep clients in steady-mode, and keep business retained. Your tone and approach during these more difficult times can make a big difference to your clients, and ultimately to your business.
Financial Uncertainty from Your Clients’ Perspective
Clients can react to volatile markets with sharp emotion. Research has shown that the feeling of pain from losing an amount of money is twice as strong as the pleasure of gaining the same amount. This phenomenon is called Loss Aversion. It also suggests that people are more likely to take risks to avoid loss, than they are to make gains. Currently, with social media and the 24/7 news cycle, alarming headlines make this distortion in behavior more pronounced.
Understand that it’s not just numbers your clients are worried about. They are attaching the security of their families in the future to those numbers. So, keeping clients informed during downturns shows care and support for their families. Education, empathy and frequent communication all contribute to building strong relationships with clients that will weather any storm in the market.
Get Ahead of the Information
If financial uncertainty is the topic, it is critical to proactively reach out to clients and offer guidance and reassurance before clients start to worry about their portfolios. This kind of worry can lead to panicked decision-making that does not ultimately benefit them.
Communication is key during financial uncertainty, and there are proven tactics you can use to reassure your clients, build empathy and get them through a difficult period with less stress.
- Segment your list into client groups with like-stress levels. This way you can tailor your messages to the very, very anxious differently.
- Once you’ve done this, send timely market updates that plainly explain what the current volatility does or doesn’t mean and how that applies to them.
- Add personal calls or personal emails as a simple check-in to your most important clients using a calm, reassuring tone.
- If you’re not already using social media in your marketing mix, consider adding blog posts, LinkedIn posts or even webinars to offer positive voice-of-authority in these matters.
Understanding Financial Uncertainty Helps Clients Move Forward
Market volatility is part of the cycle. The more you can help your clients understand the big picture, the better they will feel. Helping clients know about the how and why of what’s happening can be your mission. And this knowing will help them understand their concerns, ask better questions and understand your intentional strategy for their success.
Explain the parts of financial planning that are within their control. These things can include cash flow management, rebalancing strategies, retirement contribution changes and the like. Remind them that volatility is normal, and markets have recovered from downturns in the past. Taking a look at history and seeing the big picture helps reinforce the value of investing long-term. Your reassurance and their understanding will go a long way to both validate their concern and build their resilience.