Another $1 billion advisor said that he went on an eight-week "planes, trains and automobiles tour" to sit down face-to-face with every one of his clients. He didn't prioritize them by the amount of money they had but by whether they were approaching retirement, already in retirement or possessed of a 529 plan.
One of the advisors referred to this proactive strategy as "communications triage." And an advisor had best bring a sense of urgency when he reaches out in this way. The study showed that the clients had a grace period available for the conversation, but the longer the advisor waited, the less likely the window of grace was left open.
The successful conversation with these clients often requires reflection. One advisor created an investment philosophy statement that he reviewed with each client, saying a planner could otherwise be in trouble if he could not bring his clients back to the basic tenets the relationship was founded on. It is critical for advisors to know their philosophy is sound and does not change because companies and individuals act imprudently.
Once you have covered the philosophical you must then uncover the personal. One simple question will suffice: "Is there anything going on in your financial situation that we need to talk about?" And be careful with the pronouns you choose. When you talk about how much was lost, say how much "we" lost, rather than telling them how much they lost.
The final piece of advice the clients in the survey offered was that their advisors should stay positive. They had no interest in seeing confusion and hand-wringing or hearing "brand-new" ideas from their advisors. Nor did they want their advisors to show false bravado and blind optimism without acknowledging the devastation. But the clients often mentioned that the best advice they had heard was to "stay the course"--which makes perfect sense if you have just finished reviewing your investment principles.
And when advisors do acknowledge the damage, they should stress that the situation is not unique. It is only different by virtue of magnitude and severity, but we have seen problems of this nature before. This isn't the first time people have overleveraged debt, overspent, failed to understand investments or chased "easy" money. These are age-old problems, and it's not our first, or last, experience with them. The notes may be a little different this time around, but we recognize the music. Or as Mark Twain put it, "History doesn't repeat itself, but it rhymes." There is hope in that thought.
West said, "I know it's cold right now and we're buried in snow. Just as we all know that there will be more job losses and discouraging economic stories to come, our clients want to know that spring is coming. They want to know that it's getting lighter later in the day and that buds will appear once again."
Clients said as much. They want to talk--now. They don't want to see a deer in the headlights but a light at the end of the tunnel. Now, more than ever, advisors must remain bullish on communication and positive on life.
The most positive thing you can do is get in front of your clients. Get to know their stories and leave them with a philosophy that is inspiring. You will leave them in a calmer state, with a lowered heart rate and with confidence that they have the right advisor.
And remember, by taking their pulse ... you will lower your own.