When the market is volatile, clients can sometimes panic and make rash decisions. Many individuals will immediately make drastic adjustments to their portfolios or reach out to their advisers in an attempt to calm their nerves. Employee benefit advisers are confronted with the challenge of reaching the employees they work with efficiently, frequently and with the right information to increase their confidence and create informed decision-making. Adding a dose of client fear adds challenges to this relationship
Here are steps advisers can take to reduce their client’s concerns over market volatility.
Remember your adviser role during market volatility
The more volatile the market is, the more mistakes people make. Employees who adjust their portfolios in the middle of an economic crisis will suffer in the long run when the market readjusts. Advisers should encourage the employees they work with to remain calm while the market regains stability. Maintain relationships with the individual employees who utilize company-sponsored retirement plans to ensure they are comfortable with their contribution levels.
Frame responses to address client concerns
Advisers can take a proactive approach to quell concerns and provide guidance, and there are a variety of communication tools I use to help employees gain confidence and patience with the market. As a result of these efforts, none of the employees I work with brought up concerns during the most recent period of volatility.
Storytelling can be one of the most powerful communication tools for advisers. For instance, a story that resonates with individuals I work with is a comparison of the market to a train — if you jump off while the train is in motion, you’ll hurt yourself. This teaches patience and is a reminder that impulsive actions in finance can have negative consequences. This is just one of the ways I try to reinforce to my clients that financial decisions need to be logical, not emotional.
Open lines of communication to comfort worried employees
There are a variety of communication methods that can facilitate conversations with employees before, during and after market volatility. Employee benefit advisers should hold workshops or participate in teleconferences throughout the year to educate and answer any employee’s questions. My practice sends out weekly e-newsletters that include my perspective on current financial events as well as more long-form newsletters that ensure employees stay informed about their 401(k) programs and company-sponsored plans.
One of the most effective and unique methods I use is an informative voicemail message. Instead of using a canned message in which I promise to return calls, I use the maximum time allowed, typically 15 minutes, to provide advice and offer my perspective on any industry news. I encourage the employees I work with to listen to my thoughts, and if they have any additional questions, they can call me back to discuss or schedule an appointment. The majority of my callers don’t leave messages or schedule appointments. This efficient method allows clients to get advice and have their questions answered by a knowledgeable source at their convenience. They don’t need to alter their schedules to talk or meet and can make more informed decisions after 15 minutes.
Explore and implement additional solutions
When employees express confidence during periods of instability, it is crucial to implement new solutions to sustain these attitudes. It is vital for advisers to always learn new techniques to help their clients in creative and innovative ways. I enjoy attending Million Dollar Round Table meetings to gain insight into methods that other financial professionals have used for success. It is not enough to simply attend and take notes, make sure you go one step further and implement the solutions into your practice. Your clients may benefit with the more knowledge you gather and time you invest into improving your practices.
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