Volatility in the stock market returned with a vengeance, catching most investors and many advisors off guard. Advisors, who have experienced at least a couple of market cycles, understand that volatility is normal and market pullbacks are temporary, which is why they advise their clients to exercise patience and discipline in staying the course with their long-term strategies. Yet, the record outflows from equity funds over the last year is a clear indication that scared investors may feel otherwise, with many abandoning their strategies and some even abandoning their advisors in search of a better option.
While it’s not uncommon for clients to run scared—after all, there is no greater fear than the fear of losing money—many do so even when they know that pulling their money from the market may be a big mistake. At least, that’s what their advisors have preached to them. Selling at the wrong time is often costlier than riding out a passing storm because most investors don’t know when it’s time to get back in. Some may never get back in, which could seal the fate of their financial future.
Advisors Not Following Their Own Advice
Interestingly, during tough times, many financial advisors don’t always follow their own advice—to exercise patience and discipline, to stay the course—until the storm passes. Instead of forging ahead with their growth strategies, many look to cost-cutting in anticipation of falling revenues. And, as is the case with other industries, one of the first expenses on the chopping block is marketing. While that may seem like a natural tendency, it is often a short-term path that leads to poor long-term results. A tough lesson learned by businesses in any industry is you can’t save your way to prosperity.
Drawn into their own world of restless clients and shaky revenues, some advisors may not realize that their competition is struggling with the same afflictions, which suggests that it is not a time to pull back. Rather, it is an opportunity to truly differentiate yourself, get your story heard and gain ground against other advisors. It’s an opportunity to lock down your existing clients and create opportunities to attract dissatisfied clients from other advisors.
Be Aggressive When Others Are Reeling
Warren Buffet suggests that investors should be “greedy when others are fearful.” In marketing parlance, advisors with a good story to tell should be aggressive when others are reeling. At times like these, there is a lot of money in motion that won’t find its way to you through inbound sales.
If you have been executing a marketing and communications plan, now is not the time to stop. If you have been putting off implementing a marketing strategy, now is the time to move forward. While cost-cutting may seem like the easier path to protecting profits in the short-term, the right marketing strategy can still generate the best ROI for sustainable profits in the long term. It’s time to refocus your resources on the marketing and communications efforts that produce the biggest bang for your buck.
Here are three areas of focus that can keep you in the game.
Fortify Your Communications Strategy