Facing unprecedented situations in the markets raises stress levels for both advisors and clients. Fortunately, it’s still possible for advisors to have positive, productive conversations with their clients when the news is negative or uncertain.
Essential to this process for advisors is first examining how they do business. Face-to-face meetings shouldn’t be a requirement for a regular review meeting. Flexibility in how advisors deliver information to their clients is important.
For those who weren’t yet offering their clients ways to connect virtually, the spread of COVID-19 has forced our hands to explore options through channels like Zoom, Join.me or Go-To-Meeting. We can go kicking and screaming, or we can embrace this change and look for the opportunity. Now is a great time to add these options so that clients can still get the information they need in a comfortable setting.
We’ve spoken with many advisors over the past few weeks. It’s an uncertain time for everyone. But throughout these conversations, it’s become apparent that advisors need something positive to talk about with clients. After the longest bull market in history burst into oblivion, we can no longer count on positive performance to delight our customers. We have to dig deeper.
In response to this, we pulled together a list of topics that support client needs during these uncertain times, centered around things we can control:
- Explain how tax-loss harvesting and rebalancing strategies help keep plans on track and maintain clients’ target asset allocation.
- Determine if your client is ready for a discussion on asset location. HINT: They are – especially if you’re rebalancing.
- Review the steps we took to assess the level of risk the client is comfortable with over the long term. Volatility may cause risk levels to become more conservative, but having the discussion shows clients that you’re doing everything you can to make them feel comfortable while upholding your fiduciary duty. This is not the time to change course or seek shelter.
- Revisit the client’s plan to ensure that it still makes sense to them and they support your strategies. Discuss where they might want to make changes in light of the current investment landscape and highlight how those changes could impact their long-term outcomes.
- Reaffirm the client’s long-term goals and remind them what they are planning for. Use tools to show them they can still achieve their goals despite short-term market fluctuations.
- Explain how the expectation of market volatility is built into client plans and is part of the process of comprehensive financial planning.
- Discuss the benefits of consolidating accounts with your firm. One way to facilitate this is to use a smart-householding strategy that focuses on improving long-term tax efficiency at the household level.
LifeYield offers advisors tools they can use to have productive conversations with clients based on data, leveraging easy-to-understand benchmarks like the LifeYield Taxficient Score®. The LifeYield Advantage Suite® looks across all a client’s accounts at once—including 401(k)s, IRA rollovers, Roth IRAs, brokerage accounts and more—to see whether the right assets are held in the right accounts. It helps advisors show clients where they are paying unnecessary taxes and provides a simple score you can use to communicate the value of a tax-smart portfolio.
Join our webinar with SmartAsset on 3/31 at 2 pm ET, where we'll discuss how to grow your practice in volatile markets and guide conversations to positive topics you can control.