Listen. People want to be heard. Whether they are angry, frustrated or scared or feeling a combination of all these emotions, it's critical that you listen to them actively. Clients may say some nasty, hurtful things. Do not interrupt them. Resist responding angrily or emotionally. When a client finishes telling you how he feels, pause and let there be silence while you think about what he said. Given silence for two or three seconds, people often will continue with elaborating an idea. A good listener also asks leading questions that allow the speaker to continue developing a thought. So when a client shares a concern about how he is worried about paying for a child's college education, help the client fully explain his concerns by asking simple leading questions, such as, "Is there anything more you can tell me about that?" or "What else?" By encouraging your clients to fully explain their fears, frustrations and problems, you help them find solutions.
Actions Speak Loud. When it is your time to speak, be prepared to let your client know what you're doing for him. Tell the client about specific actions you are taking on his behalf, such as reviewing his investment policy statement (IPS), rebalancing his account, updating his retirement plan, speaking with researchers at fund companies, interviewing managers with specific expertise and holding daily conference calls or Webinars. It's reassuring when you tell him about a few substantive steps you're taking.
You're Not To Blame. Reasonable people know you are not a seer. They do not expect that you could have foreseen what has happened. Don't blame yourself. Do not act like you have done anything wrong. Just as a patient cannot expect a doctor to always cure him, clients cannot expect you to protect them from all investment risks. Most clients know that the advice you have given them is based on prudent principles. If you have practiced professionally and have investment policy statements that your clients signed off on, then you truly did get them to communicate their needs to you, and you have been helping your clients achieve their goals in a way that is aligned with their wishes and best practices for financial professionals.
Now, It's Personal. Let people know if you are also personally affected by the financial crisis. Show that you understand their fears and pain. Explain briefly how it has impacted you and your family. Don't dwell on your personal situation, but mention it. By making it clear that we are all at risk, risk is more acceptable because a client understands he is not being unfairly targeted.
Institutional Support. Voice respect for our institutions, such as the Federal Reserve. I recently encountered an advisor who railed against the Fed. "They're trying to collapse the world economies on purpose!" he wrote to me. "They're not here to help. They are world bankers with their own agenda." Such talk does little to inspire confidence.
Make A Statistical Case. Explain the length of time and amount of losses in other bear markets. Explain that the biggest gains from market bottoms historically are won in the first 40 days after hitting a low. But don't rely on statistics. Your behavior and the commitment you show to helping the client is more important.
Don't Dwell On The Negative. Don't overuse words like "crisis" and "extremely." Temper your language to keep people from becoming overly emotional. Maintain a calm, gracious and helpful presence and avoid appearing flustered or overwhelmed-even if you are indeed flustered and overwhelmed.
Review Marketing Vehicles. Reread your brochure, Web site and other marketing vehicles. Are they up-to-date? This is something you should do once a year anyway, but most advisors don't. And yet they have the marketing opportunity of a lifetime coming their way. You need to prepare for it. Make sure your marketing vehicles address the changing times.
Differentiate. Just as politicians want to be sure you know they are not part of the Washington establishment, you want to be able to explain why you're different from brokers who work at Wall Street brokerages. Investors used to take comfort in knowing that their financial advisor worked for a giant firm. That myth has exploded in the faces of millions of high-net-worth individuals. It's a great differentiator for you and your business that you deliberately chose not to work for a large brokerage because you did not want to be told what to sell and did not want your fortunes and your clients' to be tied to that of a giant financial corporation with its own agenda. Custodians and independent B/Ds are generally not involved in any product manufacturing, or if they are, it is only a tiny bit. They did not get caught up in the credit swaps and mortgage market the way the large investment banks with major trading operations did. Take a look at the performance of Charles Schwab's stock versus Merrill Lynch's or any of the other big brokerages' equity for a vivid illustration of how different the independent advisor business is from the Wall Street firms. Be sure your marketing materials explain the benefits of being an independent advisor.
Blog. Clients need you now more than ever. So make yourself more available by using the Internet. Write a blog daily. Even if it's just a paragraph or two, it shows clients that you are concerned and on top of things. Not being in touch daily during this crisis invites problems. A client is far less likely to fire you if you have been proactively in touch.