After market volatility strikes, some advisors will be sitting on a stack of referrals. Business is up.
Others will be crawling out from under their desk and catching their breath.
Where do you fall along the spectrum?
And how do you tilt the scales toward growth during a downturn or, if you’re already operating out of a strong position, solidify your footing?
Let’s dig in and look at a recent example.
The economic fallout linked to Russia’s unprovoked invasion of Ukraine, COVID-19’s ongoing impact, historically high inflation and a contentious upcoming midterm election left a mark – 2022’s stock returns are among the worst starts to any year.
Through the end of May 2022, the S&P 500 moved more than 1% in either direction 52 times, which is well above average. Then the index entered bear market territory at market close on June 13, 2022.
It’s easy to satisfy clients when the markets are up. That kind of volatility is another story.
In this blog, we’ll outline how successful advisors differentiate themselves from advisors who falter during market dips – and can see significant growth in the process.
Successful Financial Advisors Prime Clients for a Downturn
During times of prosperity, investors are generally happy with their advisors. They’re riding the wave, not paying much attention.
But waves crash. Markets dip. And when they do, people’s ears perk up.
Successful advisors’ clients have been listening all along – because successful advisors educate their clients. They understand their clients’ risk tolerance and goals, and they explain how the balance of their clients’ portfolios are in alignment over the long term. They communicate what the market is doing now and why, what it might do next and why – and how that could impact performance in the near term.
That means when “next” or the “near term” is a market downturn, clients are not surprised. They don’t panic.
When they don’t panic, they see the value in your counsel.
And when they see the value in your counsel, they often refer their friends and family who are panicking.
That’s powerful organic growth.
Successful Financial Advisors Segment Clients
Successful advisors have identified their A+ clients, as well as clients who would be most susceptible to volatility concerns. That helps those advisors prioritize their personal communication efforts and work more efficiently when volatility strikes.
Proactively reaching out to those who you know would most benefit from a phone call or email keeps your value front and center. It reminds clients of their long-term goals and the holistic plan you designed together, and prevents any emotional reactions from bubbling up and gaining a foothold.
Successful Financial Advisors Ask for Referrals
Every conversation with your clients is an opportunity.
When you reach out – whether it’s via individual phone calls to A+ clients or in your weekly all-client newsletter – don’t skip that important last step.
Successful advisors close these conversations with a simple but effective message: “If there’s anyone in your circle who you think could use some trustworthy advice right now, please pass along my information . I’d love to help.”
When you’ve built solid relationships, a gentle reminder like this can bring in new business – and often does.
Successful Advisors Don’t Lead with Performance
Planning is king. You can’t beat the market. So advisors who rely only on portfolio performance will naturally struggle under the weight of unmet expectations during market dips. This is not a sustainable strategy.
But maybe you’re a particularly tactical planner. You can tell an “and” story.
In that case, you would still tell the planning story first. Then add your “and.”
For example: “And our investment process also navigated us away from some of this downturn – we’re down X points, compared to the overall market, which is down Y points.”
Successful Financial Advisors Send Clients Proactive Messaging
While not every client needs a one-on-one, your clients deserve some form of communication.
You’re their coach. The momentum of the game has shifted. Your players will expect to hear from you – and if they don’t, they might switch teams.
Successful advisors recognize the moment and have planned for it. They send out proactive messaging about what clients are seeing. That could look like:
- An email recapping the market conditions, explaining why long-term planning insulates them from short-term market events, and offering a way to reach you with specific questions.
- A newsletter that offers an expanded view of the email outlined above.
- A blog breaking down more granular details of the economic conditions at play and what you expect to see in the months ahead. (At Carson, we call it the Weekly Market Commentary.)
- A webinar invite, so they can see and hear you, in real time, discuss the news of the day from the convenience of their computer. (Here’s an example of a webinar we hosted for our partners and their clients during May 2022’s market volatility.)
Successful Financial Advisors Identify Planning Opportunities for Clients
Volatile markets offer planning opportunities. Successful advisors are thinking about rebalancing, leveraging tax-loss harvesting, considering Roth conversions, exploring gifting and more.
Based on your clients’ individual needs, one or several of these strategies might make sense.
When you can make savvy recommendations in moments like these, it inspires confidence and showcases your value. To say they’ll appreciate your diligence and recognize what you bring to the table is an understatement. Not only can these planning opportunities help further cement your relationships, it can – and likely will – lead to referrals. (Don’t forget to ask!)
Successful Advisors Don’t Rely Only on Themselves
Successful advisors educate their team, too. The people you work with should know what you have planned and a list of talking points so they’re ready to field calls and interact with clients.
Successful advisors also have a process in place for their teams so when those referrals roll in, they’re ready to connect and convert.
How Successful Advisors Execute
The secrets that separate the successful advisor from the floundering one aren’t really secrets at all.
It’s good practice management that differentiates good advisors from the rest, especially in challenging times.
The steps we outlined in this blog can make a significant and immediate impact on your business. The real trick is executing. And we get it – just because you know what to do doesn’t mean you have the capacity to pull it off.
We do.
Many advisors would rather spend time interacting with clients than churning away in a back office to prepare and execute this type of proven plan. If that sounds like you, download our partnership guide. In it, we pull back the curtain so you can see exactly what we do for our partners and how it frees up their time to run, grow and love their business.
