According to Tuchman, many clients nervously carry “broker baggage” as a result of buying a broker-recommended fund or stock that didn’t pan out. Rebalance IRA reminds clients that it uses index funds and doesn’t bet on specific sectors or stocks.
To ease clients’ fears of running out of money in retirement, Rebalance IRA does a lot of financial planning and modeling. It conducts yearly update calls with individual and often uses videoconferencing so clients can see their advisors.
“Drip” series videos, created by the firm’s investment committee, are sent weekly to clients, said Tuchman, and specific videos are recommended when clients have particular concerns. “When someone says they’re going to time the market, we send them a great video from [investment committee member, economist and professor] Burt Malkiel that says why you’d be an idiot to try to do that,” said Tuchman. “It says it very nicely, but he explains why that doesn’t work, why it’s never worked and why it’s so futile.”
Rebalance IRA reminds clients that if they exit the market, they’ll have to decide when to get back in and that they’ll have to pay taxes on taxable accounts.
Tuchman encourages clients to focus on what they can control, like asset allocations and fees, rather than the markets. Clients are able to relax more after consolidating multiple accounts across various firms, he said, because it’s easier for them to track their savings and to understand and evaluate their true asset allocation.
“We try to always, always, always address the fears in advance,” said Tuchman.
What are you doing to allay your clients’ anxiety?