Advisors stepped up their communication with clients during the pandemic and that playbook continues to serve them well in today’s uncertain economic condition, advisors say.
“The key to remember is we were not just managing money or their financial picture, we were managing their families and their whole world around them,” said Missie Beach, senior financial advisor, Wiser Wealth Management in Marietta, Ga.
In 2020, Beach said Wiser Wealth started a weekly podcast so that they could connect with clients. Also on a weekly basis, they did a blog and educational videos. And as an outreach to its many widowed clients, the firm began sending them flowers on Valentines Day. Many of these clients became widows during the pandemic, Beach noted.
“We got the most heartfelt responses,” Beach said, noting that the aim was to provide a mix of financial and personal care.
Beach spoke Tuesday on a panel titled, "Above and Beyond: Volatile Times Bring Out Best Practices In Client Relationships," at the Invest In Women conference in Atlanta, sponsored by Financial Advisor.
The staff at BFS Advisory Group also used various communication methods including blogs to reach clients. Every Sunday, Debra Brennan Tagg, president, said she would write and send out “long emails” to the clients “just to try to get ahead of some of the questions that could be coming up and things that we were hearing through our client service teams."
Brennan Tagg said the emails were to check in with clients and update them on their portfolio. “Part of it was what we were doing as a team and how we were servicing them … and then what we felt the markets were doing and how we were reacting to the market and what they could expect in their portfolios,” she said.
For Catherine Avery, founder of CAIM LLC, an investment management firm in Canaan, Conn., just being able to reach out to people on Zoom was appreciated, she said. Avery said because her firm focuses on high quality dividend paying stocks, they were doing much more trading during the peak volatility period during the pandemic.
“We would just get on the phone and say, ‘hey, we know you see a lot of activity going on. This is what we are doing, and this is why we are doing it, and this is how we are going to enhance the portfolio for you,” she said. “That really allayed a lot of fears and they felt that somebody was there watching over their portfolios.”
The advisors said with today’s economic uncertainties—high interest rates, inflation and bank failures and potential job losses—clients’ fears have crept back to the forefront. But the learned lessons from the pandemic are still fresh.
“So, really trying to get to the heart of what’s scaring clients before they can even really talk about it themselves," Bragg said, noting that her firm revisits clients’ financial plans and figures out what their fears are. She tells them, “Let’s look at exactly what’s happening, let’s look at what happened last year and how the market is recovering, even in the wake of things that are pretty scary looking." She added that the key is putting a lot of data to the client’ concerns and helping them understand what to expect.
Beach said her firm also depends heavily on data. “Use your financial software,” she said. She noted that she had one client who was adamant about going all cash and staying that way. She suggested mocking up a scenario with all cash. “And of course, that model tanked,” she said. “I said, ‘see, this isn’t feasible, and we don’t know when is the right point to jump in, I can’t tell you that. I don’t have a crystal ball,” she said.
But like Bragg, Beach said relying on data is all that they can do. “And that’s the great point about coaching our younger advisors to take the emotions out of it. When we boil it down to just the numbers, that’s what we rely on and that’s what we present to a client to wipe out all the emotional and political stuff and just show them that is what’s going to happen,” she said.
Avery said it helps that some of her clients have been with her for close to three decades and have been through all sorts of cycles. “So, being able to show this is where we were so many years ago and look where we are today,” she said. “Having that consistency in the portfolio and being able to show people a projected stream income … being that sense of calm for them in a crazy, crazy environment is very comforting for them,” she said, adding that she as the advisor must keep her calm as well.
The advisors noted that tax loss harvesting is another key tool they employ to allay clients’ fears. “When clients are beating you up … and then you point out, ‘hey look, we’ve taken $75,000 worth of losses that you could use against next year when you’re selling your beach house and not paying any capital gains or $3,000 against ordinary income,'” that makes them refocus, noted Beach.
“That’s the value you add as an advisor,” she said, noting that clients will see that you are working for them in a down market. “It’ not like we are just sitting there watching it go down with you. We’re being active behind the scenes.