Whether the U.S. is heading into the most forecasted recession ever or not, advisors have a stellar opportunity right now to connect with clients—even the ones who normally stay hidden in the background, according to two JPMorgan advisors.

With married or partnered clients, one of the two parties often is the advisor’s primary contact while the other is a pseudo-mystery. More often than not in that scenario, the mystery spouse is a woman, the advisors said yesterday at the American College Center for Financial Planning’s Women Working In Wealth conference in New York City.

The advisors—Carly Doshi, managing director of wealth planning and advice for J.P. Morgan Wealth Management, and Sitara Sundar, vice president and equity specialist in J.P. Morgan Private Bank's managed-equity group—tag-teamed in a session that coupled major headlines on the economy with talking points for clients for the rest of 2023, and even into 2024. The panel was moderated by Financial Advisor's Washington Editor Tracey Longo.

“We know that women will control more than half the world’s wealth in pretty short order. And so if you know that to be true, then it’s yours for the taking,” Doshi said. “The pipeline is real. And women advisors play a very special role in financial services and in advising families.”

The leading headline, Sundar said, is the looming possibility of a recession, as economists have been calling for a slowdown for the past year. To understand where the U.S. economy stands, it’s important to look at how recessions tend to play out in economic cycles, she said.

Economic strength leads to higher inflation, which leads the Fed to have to respond in some way to cool off the economy, she said.

“We saw that last year. We saw a pretty meaningful, sharp rise in interest rates given what were really elevated inflation levels,” she said. “These were the biggest interest rate moves in the last 10 to 15 years, and we likely will see interest rates continue to increase until we start to see real cracks in the economy.”

To force those cracks, the Fed will be putting less emphasis on the economic growth side of the equation and more emphasis on inflation and employment levels, Sundar said. What that means for clients is that there’s most likely still some pain to come.

“We’ve already felt so much pain in the asset class parts of the market. We’ve already felt a 18% decline last year within the S&P, and we saw a huge selloff in the bond market and the fixed-income market, which is not something people were expecting,” she said. “Even if the economic data starts to be more doom and gloom, a lot of pain is already in the price. We’ve all felt it.”

Even with some room to fall further, Sundar said she is seeing some indicators start to point toward contraction territory, “as they would if we’re heading into the later stages of an economic cycle.”

“When change is afoot with economic cycles and interest rates, your clients need you front and center,” Doshi said, adding that if advisors know that higher interest rates will be part of the investment landscape for a while, they can use that knowledge to their clients’ advantage.

In an environment of increasing interest rates, tax planning and tax-advantaged strategies are the silver lining, she said.

“You can really harness those increased interest rates to your advantage. Clients love to hear that,” she said. 

Doshi said she expects most advisors are already having client conversations about tax loss harvesting, Roth conversions and exercising stock options for clients who have them. But if they haven’t had those conversations, right now is the time to use the chaos around the future to help focus clients on what good they can get out of it.

“That’s the name of the game,” Doshi said. “As advisors, our job is to be in front of clients when there is uncertainty or where there are fears and unknowns. This is the time to come to them with ideas, whether you’re bringing new information coming from an investment perspective, or coming to them with planning ideas.”

For example, she said, for years philanthropic conversations were all about charitable lead trusts. Now the talking point is charitable remainder trusts, which many clients might not know anything about since they’ve never had to deal with them.

“The key is knowing your client and knowing what’s going to spark a conversation,” she said. “For women clients, that’s really table stakes. So my easiest advice is at your next portfolio review or check in, demand that both spouses attend that meeting, or have a one-on-one meeting with the spouse who usually isn’t involved in the primary financial conversations.”

It makes all the difference in the world, she said, especially if that person is a woman.

“We know that women tend to outlive their spouses on average by five years, that by the time they reach 75 many will be below the poverty line because they haven’t planned, that women save less because they take time off during their career and because of gender parity issues in the workplace,” she said. “All of those are real, and advisors can overcome those forces by giving them good advice.”