Monday, the market zigged, zagged, and collapsed, dropping over 1,000 points in the morning session to recover quickly to only 200 down, and then ultimately sink 647 points on the day, in addition to the pounding it took last week. The wild ride continued Tuesday morning as the Dow made big gains.
Based on global uncertainties in China, Greece, and a looming interest rate hike by the Fed, stocks’ day of reckoning has been a long time overdue, yet it still seemed to catch investors by surprise. In times like this of market volatility, advisors need to have a communication plan ready to deploy to calm clients not to take rash action and to stay committed to the long-term vision. Advisors need to earn their keep by helping their clients understand associate risks, and allaying their fears, hopefully, in the same way you prepared them for days like Monday.
As I travel the country and spend time with advisors I know that all of you place great importance on your abilities to do this. The question is what happens when you need to reach all of your clients at once and the old fashioned face-to-face or one-on-one just isn’t fast enough? It is incumbent to be prepared with the right technology to deploy communications very quickly.
I happened to see a great example of planning ahead and acting fast Monday from Greg Friedman, Founder and CEO of Private Ocean and Junxure, with whom I’ve worked closely. Friedman, was able to dash off a very compelling communication to his clients to help them understand what was happening and to stay the course. Friedman, a technology savvy advisor, was able to use his CRM to pull together the communication in short order and leverage the electronic communication platform to make this a simple process, because he planned ahead. Nice work Greg (and Private Ocean team) and I am sure there are many other examples out there.
So, the one thing we know to be true is that there will likely be more volatility ahead and likely even more questions from your clients. It reminds me that some of the best lessons advisors espouse for managing wealth can be said for managing communications with your clients as well – be prepared for the unexpected, know your move before you are in the storm, and stay calm.
As Senior Vice President and Managing Director of Advent’s Advisory Market Group, Dave is chartered with setting the strategy for serving the unique needs of high-net-worth advisors and wealth managers.