[Starting from 1998,] if you look at the returns that the market would have to generate in the next five to ten years in order to get us back to that 10% rate of return, we'd have to crank out 20% a year."
This isn't great news for a client. But at the same time, many of them are more ready than ever to listen. Kresh says those who have come to him from other advisors aren't coming from other fee planners but from wirehouses and transaction-oriented brokers. And they're saying the same things:
"It's difficult to reach my broker. And I can't get advice. Or the stuff that he sold me recently isn't working and he has no ability to communicate to me why I should own it. It's a very similar pattern. Whoever is on the other side of the table isn't hand-holding anymore. And that leads people to be frustrated along with being scared."
Exhaustion
In this kind of market, you're a therapist as much as an advisor, and sometimes the stress can be traumatic, especially if you're fielding calls from clients morning, noon and night and on the weekends-people who would insinuate themselves into your evening dinner and kids' soccer games to talk about why their investments have gone to hell.
"It's been overwhelming and exhausting in the sense that you spend a lot more time reassuring people," says Rita Cheng, CFP, an advisor with Ameriprise Financial in Bethesda, Md. "But that's your job. You feel like you may not be as efficient as you have wanted to be, so you give yourself a to-do list and you try to hold yourself accountable and do everything on that list. You can't beat yourself up. ... If you're talking to clients, that's a good thing."
If Cheng sounds like a mom, she is one. She tells everybody to remember to get rest and eat and preserve energy (even journalists) and you get the sense she's talking to herself as much as anybody else.
Another stress point for advisors is the peculiar and discontinuous-not to say schizophrenic-nature of the current market. "It's sucked a lot of time away from what we consider our normal activities-the extent to which policymakers have hijacked the investment process," says Barnes. "Basically, the market is functioning off what policymakers are doing. They've made it hard to make strategic decisions in regard to portfolios. So I've spent an inordinate amount of time trying to figure out what I should do differently."
"When the market does recover, it tends to recover in bursts, and people who wait for the recovery before they get back in consistently miss the market entirely," said Kresh on October 24, when the market suffered another of its many freefalls this year. "When this morning came around, even I challenged my own recommendations because the market looked like it could have had a 10% or more correction. And it's hard to justify to somebody holding [their investments when] the bottom is still as shaky as it is. I personally drew comfort from the fact that the market, although down 300 points today, continually keeps bouncing against Dow 8,200 and we might have established the floor."