Advising client through a volatile market

Build Trust in Volatility

LPL Financial

Times of market volatility can raise sensitivity for advisors and clients alike. Advisors who use empathy to navigate these waters carefully can decrease client sensitivity, provide reassurance, and build long-term trust.

If the market impacts emotion, it certainly impacts decisions.

4 ways empathy can help clients

Few can argue that the world of investing and financial planning is emotional. When the markets are good, clients are happy. When they take a turn for the worst, it can be a rollercoaster of panic, unrest, and feelings of loss.

It’s these times that separate good advisors from great advisors, where the true value of these personal relationships is on display, that determine whether a client will eventually forget your name or happily refer you to their friends and family.

Here are four ways you can use empathy to build trust when it’s needed most.

Understand client needs, behaviors, and tendencies

A market downturn can send clients into a frenzy of checking their accounts too often, and they may start to get overwhelmed with news coverage and updates. This can increase stress and tension levels, especially when they feel there’s nothing they can do.

In these instances, it may be helpful to recommend your clients limit how often they check their accounts or apply what they see on TV as gospel. Let them know you’re on top of it, and you’ll be monitoring all activity and contacting them immediately if there are any critical decisions that need to be made.

Anticipate the clients who may need more attention and hand-holding in the process. Most likely newer clients are still getting to know you and this will be the first time they’re going through a tough situation with you as their guide. Setting aside some extra time to have a check-in call or meeting can reinforce they’re in good hands with you.

Discern their decision-making

If the market impacts emotion, it certainly impacts decisions. If things are going well, clients are more confident and aggressive with their plans. If things go south, they may want to change gears completely.

It’s important you act as their guide to stay on course. If they’re pushing to make adjustments that deviate from the plan, make sure they’re in the right frame of mind to make those decisions. In times of uncertainty, rational, logical decision-making can quickly be replaced with emotional, knee-jerk reactions that may make the outcome worse.

Reiterate they aren’t alone

Clients may feel they’re the only ones who are losing the financial market battle. As their advisor, you play an important role in reassuring you’re here to help them through it. It can be helpful to point out that others are experiencing the same struggle and they aren’t alone.

Know that some clients may have to hear the same reassuring messages repeatedly to help them manage emotions and regain confidence in you and the long-term plan.

Be proactive

If clients feel it’s their responsibility to reach out to you for important information and updates, it could magnify their feelings of frustration. A lack of communication can come across passive, or perhaps that you don’t care.

One of the best actions you can take is to be proactive in communication efforts, reaching out to them before they may even be aware of updates. The Advisor’s Guide for Helping Clients Weather Market Volatility provides a step-by-step approach to developing a strategic plan to manage communication. Using this tool can streamline your efforts when it comes to keeping clients informed and reassured until you’ve made it through the challenges.

When volatility happens, it’s a critical time to demonstrate your value to clients with both intellectual and emotional support. For more tips on how to approach uncertainty with your clients, download The Advisor’s Guide for Helping Clients Weather Market Volatility.

Attracting clients across generations

Millennial, Gen X, and Baby Boomers present significant opportunities to advisors. Learn how to tailor services to attract clients in any age group.

Helping Clients Weather Market Volatility Guide

Learn actionable strategies you can use to reassure clients and reinforce your value during uncertain times.

Your LPL representative

Our dedicated team has broad expertise in the financial service industry and is ready to help you find the ideal environment in which to grow.