“Communication and transparency in our industry go hand in hand with trust. During times when things are good, brokers don’t feel they have to communicate and when times are hard they’re hiding from their clients hoping it gets better,” said Brian Salcetti, Sandbox’s CEO and managing partner. “We have people coming in saying, ‘I haven’t heard from my broker since last year, but I’m seeing him on social media, vacationing in nice places.’ When we get in these extreme environments, 100% we want to touch more. So we’re pushing out more information and communication, more calls, more blogs, more social media, and definitely more education.”
For Richard Kahler, founder of Kahler Financial Group in Rapid City, S.D., the increased efforts his firm makes in communication pay off in an unexpected, but very helpful way.
“We know that clients who open our blog posts, who read our communications, they’re far less likely to call us. And when we call them, they’re fine,” he said. “So we do a great job of communicating. We’re touching our clients with weekly videos or columns.”
Always Promote Good Ideas
Sanders is a big advocate for advisors being the experts they purport to be.
“Clients know their advisor can’t predict the future, they but need to know the advisor is making the right decisions,” Sanders said. “Advisors need to be able to explain what’s in the portfolio and why.”
And there are plenty of opportunities in bear markets, experts said, just not the ones investors have been leaning on heavily in the last decade.
Mallouk rattled off his shortlist: Roth conversions, tax harvesting, diversifying a position in something that’s similar to something else, looking at estate planning strategies, using lifetime exemptions or annual exemptions when assets are discounted and getting appraisals of a business while it’s lower in value.
“There are so many opportunities that present themselves in a bear market, but you have a short window, usually a short window, to take advantage of them,” he said.
Even CDs can look attractive these days, Salcetti added, and at the very least an advisor who mentions them to a client is showing some initiative.
“There’s a lot of things you can do around the edges that will show you’re doing something for the client that is additive, you’re not just sitting on your hands and waiting,” he said. “There are too many brokers who aren’t managing the money, who will say ‘Stay the course, stay the course.’ But if you do that, how long does it take for you to recover and start to make money again?”