What do the flu and the stock market have in common? The uncanny ability to send people into a tailspin of panic in a matter of moments. Luckily, while both illness and the markets have a degree of uncertainty, they’re usually much less frightening than you’d imagine.
It’s true: market volatility has been weighing extra hard on the collective public mindset lately. But what if you could preempt your clients’ concerns? So much so that you barely had to reassure them during a market dip, or even a market crash?
There may never be a day when your clients remain completely stone-faced through a market drop. You’ll probably always have to do some touching base when the market goes sour. But you can prepare your clients for negative scenarios so that when they do occur they’re less shocking.
The trick? Show your clients the worst.
That may sound counterintuitive, but bear with us.
Model the worst-case scenario: a major market crash. If clients can see that their finances will thrive in a dire scenario, minor bumps in the market should be comparatively easy to breeze through. Use Voyant’s Market Crash Insight (found under Insights) to model a market crash at various points throughout your client’s life. If you see shortfall, you can adjust the plan accordingly to mitigate it.
How you mitigate potential shortfall for your client is in your hands. Maybe you suggest reducing spending over certain years, or liquidating a property. You’re the adviser. But once you do calculate a plan that shows your client’s plan surviving a crash, sit down and discuss it with them.
It’s a frightening time. An in-depth conversation goes a long way. And the time to have it is yesterday.
When the market recently took a dip, financial firms sent out plenty of reassuring emails. But trying to talk a client down when they’re already in a panic can be like stuffing toothpaste back in the tube. And general statements about market performance are fine, but they can come off as a platitude. Instead of talking about why a crash is nothing to fear, show your clients that they, personally, are good to go.
When you speak with your clients, keep the following tips in mind:
You can use our What-If feature to create as many plan iterations as you want. You can show how the Market Crash Insight would pan out differently on each respective insight. But remember: don’t overwhelm your clients with too many solutions. Give them just enough options to show them they’re safe under multiple circumstances.
The Market Crash Insight is an extreme scenario, but through the Investment Returns Insight you can also show your clients how their plans would stack up against different market yields both high and low. Swallow the medicine first and show your clients what would happen at the worst time, then sweeten the deal by showing less extreme scenarios. This way, you end the conversation on a positive note.
Invite your clients to participate by going to your client dashboard (Home), clicking the invitations tab, and then the plus button. The amount of access you give your clients is up to you. However, if you allow clients to participate in their plans prior to your conversations, they'll have questions ready and may even feel empowered.
Lastly, educate your clients about general market volatility. While many people might start with this as the first step, we actually believe it can be a nice way to cap things off and brings the conversation back down to a macro-level. Once your clients understand that their personal wealth is safe, they’ll likely be more amenable to learning about market trends. After all, you wouldn’t want to be lectured about how the flu isn’t a big deal while feeling gravely ill.
