A guide to virtual handholding.

Living with technological change is old hat now. Everyone knows computers and related equipment get faster and more innovative every year while falling in price as if there were no bottom. There's almost nothing that can't be done to increase office efficiency if we're just willing to make time for technological experimentation.

Probably the most elemental building block of this entire phenomenon is e-mail. And there's virtually no professional who doesn't use it frequently enough to take it for granted as a primary form of communication. But do clients feel the same way? Unless your client works at a desk and uses e-mail frequently in his own work domain, he or she may refer to it only occasionally-and may not regard it as a serious communication tool.

Which is probably OK when times are smooth, when the economy's rolling along, when clients see their personal finances in an optimistic light. But how about when the markets are falling just like technology prices-with no bottom in sight? Can one effectively hold his client's hand by e-mail, or do times like these require face-to-face (or telephone) contact?

This isn't an issue on which we're going to find unanimity, but in the differences of opinion we can examine our own beliefs and decide if they need adjustment. Joel Ticknor of Ticknor Financial Inc. in Reston, Va., represents one extreme when he says, "Clients want human contact, and this has never changed. I have never regarded e-mail as a substitute for face-to-face contact. Clients hire us as counselors, trusted advisers, 'friends.' When they are worried and concerned, they want reassurance that someone is listening and cares. I don't believe an e-mail will ever take the place of eye contact and a calming voice."

Joseph Janiczek of Janiczek & Co. Ltd. in Greenwood Village, Colo., expresses a similar sentiment: "E-mail, or for that matter, a mailed letter, is only a tool to augment a client relationship, not replace it. My belief is that you use them sparingly for the client's convenience, not the advisor's. Clients, like most of us, are overwhelmed by the amount of e-mails and printed documents [they get] to read. As an advisor, I'd rather be a solution to this problem than a contributor to it."

Ticknor's viewpoint sounds indisputable on the surface, but perhaps it only applies to certain clients. And Janiczek assumes e-mails are an inconvenience to clients, but that, too, may be a perception that is not universally applicable. Lissa Farkas, a portfolio manager at Spero-Smith Investment Advisers Inc. in Cleveland, is perhaps a bit more discerning in her decisions to use e-mail or the telephone. "The three-year market decline has caused our firm to be more diligent about communicating frequently with clients. It really hasn't resulted in more face-to-face meetings in particular, but has resulted in a more focused client communication effort via all avenues ... e-mail, regular mail, phone calls and meetings," she says.

Is this the key? That is, using e-mail as a "preventative" rather than a response mechanism? Maybe frequent e-mails to clients to communicate the state of the market and the fact that you're on top of things is what's necessary to limit the amount of time-consuming, face-to-face (or phone-to-phone) contact we assume clients want?

Roger Southward at Southward Financial Services LLC in Pickerington, Ohio, thinks so. His firm provides a quarterly newsletter and monthly market update to all clients, and even sends out daily updates if the markets dictate. "Since the start, we have communicated regularly with clients via e-mail, and we have encouraged our clients to respond to us using e-mail as well. The recent difficulties in the market don't seem to be causing a reversal in this trend for us ... for several reasons. First, our regular communications often answer questions before a client may think to ask them. The regularity of the e-mails is also a reassurance that we are continuing to watch out for their interests. Our encouragement to respond back is also helpful in demonstrating our willingness to talk. We also, as part of our letters and e-mails, offer the opportunity for phone or personal conversation. However, we just don't seem to have a change in [the number of] individuals taking us up on that offer," says Southward.

Spero-Smith does something similar, but Farkas says she typically picks up the phone when clients continue to express fears in spite of the assurances: "I believe a phone call versus an e-mail conveys more urgency, and gives the client the message that you heard their concerns and feel it is important to address them more personally."

Barbara L. Steinmetz of EA Steinmetz Financial Planning in Burlingame, Calif., admits to picking up the phone now and then if she believes a particular client requires a live, interactive response, and she's aware that not all clients are proficient in the use of e-mail. In general, though, she says, "There's been no increase [during the period of market decline] in the need or desire for face-to-face contact. I believe that you can effectively hand-hold or respond in either fashion as long as it is timely and complete."

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