Your clients need to hear from you.
I conducted a client advisory board earlier this week, after the market had only dropped 1900 points for the week. Coincidentally, the advisor’s communication program was on the agenda. We asked how frequently and through what media (email, physical newsletter, video blog) clients wanted to hear from the advisor. They had also received an out of cycle email commenting on the market downturn that day. Board members were clear that whatever he decided for regularly scheduled communications, those special emails following significant market events were among the most important messages he sends.
Most clients do not really understand how you manage their portfolios on a day-to-day basis. But they need to maintain the trust that you are on top of things. They need to know you are doing whatever voodoo you do on their behalf when they perceive their future is in danger.
“Stay the course” is not enough. That message is you are not doing anything and they should not do anything. Clients are dealing with fear. They need to know you are actively looking out for their interests. They need to know you are a manager and not a spectator. Maintaining a consistent strategy and allocation may be appropriate, of course. Your message may need to be that you are monitoring the right statistics. Reassurance is important. So is action, even if it does not result in trades.
In our advisory board work, clients tell us what kind of information they want about how you manage their portfolio. You can use these points even when the market is calm but it is critical when things are in turmoil. Here is what to communicate.
What are watching – Out of all the possible statistics that measure the market or the economy, which ones are you keeping your eye on? What are the indicators that would drive a decision to take action? One of the fears we hear from clients is that the advisor is simply not paying attention to their nest egg and that they will suffer damage before anyone notices. Knowing that you are tracking something specific is reassuring. It might be a market indicator. It could simply be portfolio allocations. Just let them know you are on duty.
What you will do – Communicate that you have a strategy. Paying attention is a first step but clients need to know you will do more than watch their balance decline. You may take protective action. You may rotate from some investments to others. Even communicating that you will buy stocks if they fall to a certain level communicates confidence in the markets.
What will trigger your action – Once you have reminded clients of your strategy, let them know when they can expect to see action. If the right thing to do is sit tight, knowing the threshold for making a change can make it more bearable.
Clients need you most when markets are in turmoil. Many of the most successful advisors get more referrals when the markets are down rather than up. One reason is that they communicate a reassuring message when fears are high. Competent management is not enough. They need to know you are actively taking care of them.