How to Support Your Clients in Turbulent Financial Times
May 17, 2022
When it comes to financial planning, there are no guarantees. You know the disclaimer: “Past performance does not guarantee future results.” But turbulent times can put your clients on edge. When interest rates are rising and inflation is reaching record highs, your clients may be more nervous than ever about their investments and their financial future. Here’s how to guide them through financial planning during a crisis.
Take Some of the Burdens Off Your Clients’ Shoulders by Pro-Actively Communicating
Your clients want to know that they are going to be okay. Remind them of the value of a financial advisor. You can help your clients feel secure. You’re keeping an eye on their portfolio and their investments, and you’ll contact them if there’s anything they need to know. They don’t need to worry — you’ve got them covered.
Help Your Clients Focus on the Plan
If you’ve helped your clients develop solid financial plans, walk through those plans again. Remind them that you put together a strategy designed to weather ups and downs like these. It was a strategy created for their long-term goals. Unless those have changed, there isn’t a reason to veer off the path. And if they are worried about stock market performance, point out the value of dollar-cost averaging — they are buying more shares in a down market and reducing their overall risk.
Make Sure Your Clients Can Withstand Emergencies
A solid emergency savings account can give your clients the cushion to protect them if they lose their job or have unanticipated expenses they need to cover. If they don’t have adequate savings, help them find a way to put away some money. In addition, make sure your clients have adequate insurance coverage to protect their lives, homes, cars and health.
Reevaluate Your Clients’ Risk Tolerance
Your clients may have started investing seriously or seen their investments grow significantly during the 2009 to 2020 bull market. During good times they may have believed they had a high tolerance for risk. But now market swings make that risk feel very different, and your clients may be nervous. It’s your job to help them create a plan that works for them in the long term. If they can’t sleep at night, they may be less tolerant of risk than they thought. It may be time to help them find a mix that’s more comfortable.
Look At the Whole Picture with
As a financial advisor, you’re probably focused on long-term growth with your clients. But it can be helpful for both of you to talk about their short-term and month-to-month financial situation as well. Is their job secure? Do they anticipate any significant life changes in the next year or so? Could their healthcare or health insurance needs change? Do they foresee any caregiving responsibilities for aging parents? Knowing how their long-term plans dovetail with their current situation can help ensure you guide them in the best direction.
Help Your Clients See Long-Term Goals
Your clients may be younger, with years ahead of them before sending kids to college, retiring or needing long-term investments. And even clients who are close to retirement age need a financial plan that will see them through 25 years or more. Looking out at a financial plan’s anticipated performance over decades can help put today’s turbulent times in perspective.
Choose a Career Where You Can Help People in All Aspects of Their Lives
At Farm Bureau, we’re here to support our clients through good times and bad. Be part of the team and join Farm Bureau Wealth Management today.