What to do during a bout of market volatility
“A very calm and professional message. Let’s hang in there despite our personal views on the shambles.”
That was the reply from one client following an email from his financial planner, reminding him of the fundamentals of investing this week.
With the Brexit negotiations stumbling along, and a renewed bout of market volatility rearing its head due to domestic politics and other global issues, it’s no surprise to hear that some investors are becoming nervous.
Of course volatility is a normal part of the investing journey. We know this. Clients should know this, but will need regular reminding, especially when it happens.
With that in mind, here are a few things you should do as a Financial Planner during a bout of market volatility.
1 – Remind your clients about the basics
Diversification, long-term outlook, inability to time markets. These are important messages that require regular reminders.
When things get wild in the investment markets, it’s a good time to add a new blog post to your website and send out an explanatory email to clients.
Here are a few blog posts you can purchase from FinCart which might help:
2 – Use calm language
There’s a balance to be found here, between ‘calm’ and ‘infuriatingly zen like’.
Investors are bound to have genuine concerns and fears when they see the value of their portfolio drop. That’s entirely human.
Don’t dismiss these worries. Do temper your language and avoid joining in with the type of sensationalism displayed by news media at such times.
3 – Be highly visible
If there’s one thing worse than an investment portfolio falling in value, it’s this happening and your financial adviser going AWOL.
Our Financial Planner clients tell us they were able to acquire many new clients during the aftermath of the global financial crisis because existing advisers were nowhere to be found.
Pick up the phone, answer emails and stick to scheduled review dates. Be proactive and offer your more nervous clients ad-hoc meetings or catch-up calls.
Don’t batten down the hatches and ignore clients; it’s easy to talk to clients when markets are rising, and it’s important to talk to clients when markets are falling.
4 – Take care with what you share
Your social media activity should be maintained or even increased during times of market volatility, but take care with the messages you share.
If you’re retweeting strong political views or news of ‘billions wiped off the value of the stock market’, then you’re likely to be heightening fears rather than reducing them.
Instead, look for social content to share that reminds investors about the fundamentals. Other good content to share when markets go wild are thought pieces – articles taking a deeper look at the why and how of market volatility.
If there was ever an opportunity to explain an inverted yield curve to your clients, this is it!
The main message to clients at times of heightened market volatility should be business as usual.
If they see their Financial Planner panicking, it’s only likely to increase their probability of making unwise investment decisions.
Do speak to us if you need any help with your marketing communications in the months ahead of Brexit.