Don’t Worry?

Have you ever been told not to worry when you weren’t worried to begin with? It can be an unnerving experience as you start to wonder what the other person thought you might be worried about. And then you might begin to actually worry.

As a financial advisor, you may be pondering this very topic as you consider reaching out to clients as the stock market has continued to decline in value.

Will your communication make things better or worse? If you’re not worried, should you share your reasons why? Or is it better to keep to your regular schedule of client progress reviews?

Here are some questions to consider:

  • What have your clients come to expect from you? If you regularly send updates on the market, then continue your regular pattern. If not, do you view the current downturn as sufficiently unusual to justify a message. Keep in mind that bear markets come along every 3.6 years on average.
  • How much attention do your clients give to financial news? On any given day, what percentage of your clients would know if the Dow closed up or down? The more plugged in they are, the more important it is to communicate with them.
  • How long have you worked with your clients? If you have a well-established client base, your clients have probably experienced one or more bear markets with you. If so, they likely know what to expect.

If you do decide to reach out, here are some suggestions on what to say:

  • Do acknowledge what they might be feeling (they might be somewhat worried, very worried, or not worried at all).
  • Remind them of their purpose for investing and their time horizon. Additionally remind them that you have expected and planned for volatility.
  • Carefully provide historical perspective such as, “Stocks lose 36% on average in a bear market. By contrast, stocks gain 114% on average during a bull market” (Source). Things always seem different at the time but we have had similar activity in the past.
  • Review their options and your recommendations. People prefer to do something over nothing so find a small action that may alleviate some stress.

When in doubt, it’s always better to reach out, listen, and talk than to remain silent and let everyone wonder what to think.

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