If advisors need to know how nervous 2016’s market volatility is making their clients, there’s now an app for that.
Sacramento, Calif.-based Riskalyze has introduced ‘Check-Ins,’ an automated behavioral coaching tool, to its risk alignment and portfolio management platform.
“We thought we could help advisors dive a little deeper through Riskalyze,” says CEO Aaron Klein. “There are six months on average between advisor reviews, and during that time we’ve seen clients going into the ‘valley of doom.’ The markets take a turn, they’re watching cable TV news, and we thought we could do something helpful to support advisors' messages.”
Each month, Check-Ins sends an email questionnaire to an advisor’s clients, asking them how they feel about the markets and how they feel about their financial future. Clients respond to the questions through a simple, button-based interface.
The monthly check-ins will allow advisors to reinforce their messages about investing in between client reviews, and may provide an early warning signal for when client sentiment is deteriorating.
“We can help them put markets and risk into context and to understand that there’s rhyme and reason for their portfolio allocation,” Klein says. “An advisor can see when their client is struggling and respond, which allows the advisor to be the one who shines.”
Unlike many retail robo-advisors, which present investors with warnings and confirmation messages when they attempt to withdraw their assets, Riskalyze’s new tool proactively monitors investor confidence.
Like Riskalyze’s other client-facing features, the e-mail messages can be white-labeled with the advisor’s own brand. The responses to the Check-In questions allow the advisor to tailor messaging to a specific client
For example, when client responses indicate pessimism about markets but optimism about their own financial future, it shows that they likely have confidence in their financial plan and their advisor. However, if they are optimistic about markets but pessimistic about their own financial future, it shows that some direct intervention by the advisor might be necessary.
“Advisors must know if their clients think they are moving in the right direction,” Klein says. “Someone confident in the markets but pessimistic about their own future is someone that advisors may wake up tomorrow and find as a former client.”
Check-Ins automate something that advisors likely want to do anyway, especially during periods of volatility. It can also automatically respond to client surveys to support an advisor’s message and show the client analysis to help them understand how their portfolio is behaving.
The new feature will roll out in May and will be available to Riskalyze customers for no additional cost.
“There’s a lot we can do to allow for advisors to have richer conversations around risk alignment,” Klein says. “Fearless investors are more successful investors. As investors and advisors react to all of the feedback they’re going to get from these tools, that’s going to help us dive deeper into risk alignment to make it easier for advisors to work with their clients.”