With stock markets looking like they could capitulate, how can you prepare your clients?
With the stock markets tumbling, financial advisors face a massive challenge – managing that volatility and reassuring their clients.
According to the new Advisor Top-of-Mind Index, released by Eaton Vance, a survey of 1,000 financial advisors found that 80 per cent “fear” the effects of market turbulence. It appears that clients have overriding concerns about the conditions as “managing market volatility” is now seen as the biggest challenge of 2016 for financial advisors.
Sean Harrell, partner and senior advisor at Howe Harrell & Associates, believes this can be a “worst nightmare” scenario for advisors.
“If you haven’t prepared your clients for the media they will be exposed to during a market downturn there is a good chance your clients are going to panic and become difficult to manage,” he said.
So what can advisors do to react to the situation? According to Harrell, preparation is the key.
“We strive to educate our clients about market volatility and show them how it creates opportunities for patient, well-disciplined investors,” he said.
“What we have done in this latest downturn is take profits from well performing areas of their portfolios and buy into opportunities that have presented themselves. Keep it simple; buy low, sell high, stay within your risk tolerances and you are going to come out of market corrections just fine.
“People have questions when markets aren’t performing well and when their current advisor doesn’t have the answers or hasn’t prepared them for the volatility, the client looks for another opinion and opens the door for well-prepared advisors to earn their business.”
According to John Moninger, the Eaton Vance manager who is responsible for overseeing the Advisor Top-of-Mind Index, client anxiety is creating a growing sense that this market turbulence “isn’t going away any time soon.” Indeed only half of the advisors questioned said they are making a point to tell clients to stick to their long-term objectives.
However, according to Sandra Cho, an independent advisor, it’s up to advisors to “step up and serve as a family’s financial rock”. She believes it’s vital to be consistent and put conviction behind every investment strategy.
What is your approach to the present market volatility? How are you dealing with client anxiety? Leave a comment below with your thoughts.
According to the new Advisor Top-of-Mind Index, released by Eaton Vance, a survey of 1,000 financial advisors found that 80 per cent “fear” the effects of market turbulence. It appears that clients have overriding concerns about the conditions as “managing market volatility” is now seen as the biggest challenge of 2016 for financial advisors.
Sean Harrell, partner and senior advisor at Howe Harrell & Associates, believes this can be a “worst nightmare” scenario for advisors.
“If you haven’t prepared your clients for the media they will be exposed to during a market downturn there is a good chance your clients are going to panic and become difficult to manage,” he said.
So what can advisors do to react to the situation? According to Harrell, preparation is the key.
“We strive to educate our clients about market volatility and show them how it creates opportunities for patient, well-disciplined investors,” he said.
“What we have done in this latest downturn is take profits from well performing areas of their portfolios and buy into opportunities that have presented themselves. Keep it simple; buy low, sell high, stay within your risk tolerances and you are going to come out of market corrections just fine.
“People have questions when markets aren’t performing well and when their current advisor doesn’t have the answers or hasn’t prepared them for the volatility, the client looks for another opinion and opens the door for well-prepared advisors to earn their business.”
According to John Moninger, the Eaton Vance manager who is responsible for overseeing the Advisor Top-of-Mind Index, client anxiety is creating a growing sense that this market turbulence “isn’t going away any time soon.” Indeed only half of the advisors questioned said they are making a point to tell clients to stick to their long-term objectives.
However, according to Sandra Cho, an independent advisor, it’s up to advisors to “step up and serve as a family’s financial rock”. She believes it’s vital to be consistent and put conviction behind every investment strategy.
What is your approach to the present market volatility? How are you dealing with client anxiety? Leave a comment below with your thoughts.
