Paul Lofties, CEG Worldwide
Co-host, The Preeminent Financial Advisor podcast

Cathy McBreen, CEG Insights
Co-host, The Preeminent Financial Advisor podcast

Key Takeaways:
• Inflation, politics and market volatility have many investors on edge these days.
• Educate your clients about the issues that worry them—and help them see how they may not be as problematic as they assume.
• Even your wealthiest clients need guidance and leadership when it comes to their concerns about how events might impact their future.

Advisors who help their clients navigate through today’s financial stormy weather will be well positioned for tremendous success. The reason: Your clients—even the extremely affluent ones—are concerned about a number of issues going on in the world today and how those issues might negatively impact their sense of financial security.

That means you’ve got to make sure you’re clear on what your clients are worried about—and then take steps to discuss and address those fears so that your clients feel that they’re supported and in the hands of a real leader.

Here’s how to make that happen.

Face The Facts
CEG Insights recently asked advisors’ clients with at least $1 million in investable assets what they were worried about in today’s environment.

• The #1 response, by far, was inflation—cited as a top concern by 64.2% of affluent clients.

• More than one-third of clients called the current political environment a major concern.

• Approximately 21% added stock market performance and tax concerns to their list of worries.

When asked what actions they’ve taken as a result of high inflation recently, here’s what they said:

• 41% are spending more time looking for bargains and discounts.

• 33.8% are buying less, or buying cheaper brands, than in the past.

• 29.1% are delaying the purchase of high-cost items.

Finally, these clients weighed in on their biggest financial-specific concerns these days:

•  Market volatility is a major concern for three-quarters of clients (74.7%).

•  A significant majority—63.1% worry about growing their wealth and getting solid investment returns.

•  More than half—53.5%—fear that a market downturn could prevent them from reaching their goals.

Ask yourself: Do I really know whether my clients share these concerns, or if they’ve taken some of these same steps in their own lives? It’s time to get clear on just how up-to-speed you are about the issues that may be causing your clients to worry about their financial picture.

Insights Into Action
Clearly, there’s a very strong probability that your clients have these and similar issues on their minds. By addressing them with clients and helping them gain much-needed clarity, you will position yourself as a trusted advisor looking out for their best interests. In return, they’ll be more likely to reward you with loyalty, additional assets and introductions to new prospects.

Some smart action steps to take right now include:

1. Educate clients on unfamiliar topics that worry them. Many clients—especially millennials and even Gen-Xers—have either never experienced a period of prolonged high inflation, or it’s been a very long time. People fear what they don’t understand, so be a leader and help them get a handle on how inflation tends to ebb and flow over time. Same goes for market volatility. You’re uniquely qualified to help separate the facts from the noise for your clients.

2. Discuss concerns in relation to clients’ situations and goals. The inflation we’ve experienced recently can seem scary, and cause clients to wonder if the current environment poses a risk to their financial well-being. Here again, you are perfectly positioned to not only explain concepts like inflation, volatility and market risk but also to contextualize those concepts so clients understand what they mean—and, importantly, don’t mean—when it comes to their wealth and their progress toward key goals.

3. Don’t assume your wealthiest clients are feeling fine. The research above includes clients with upwards of $25 million in investable assets. While it may be easy to assume that people with that amount of wealth aren’t bothered by high inflation or volatile returns, it’s a mistake to do so. Many extremely affluent individuals and families got that way because they’re careful and cautious with money. High inflation and political uncertainty can, and does, affect these clients’ sense of security—and their behaviors. So reach out to them about these topics and see how they’re feeling so you can provide leadership to them, too.

Ultimately, it’s best to assume that your clients share many of the concerns noted above—even if they don’t seem worried, and even if they have more money than they can possibly spend. Get out in front of these fears by addressing them with clients—directly and with your expert insights into how to navigate them calmly and intelligently.

Listen to the full episode here.

Catherine McBreen and Paul Lofties are leading innovators in wealth management research.