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5 Challenges Facing Financial Advisors

Anand Sheth
May 16, 2020

It’s difficult enough keeping clients invested throughout routine market downturns. At the moment, however, we’re experiencing exceptional levels of market decline - creating unprecedented panic and fear among investors. 

As a financial advisor, you must focus on allaying your clients’ concerns. You also need to find ways to continue growing the business; that’s not an easy balancing act. 

In this post, we’ll look at ways to survive these challenging times and keep your business on track. 

Keep in touch with your clients

During the Covid-19 pandemic, clients have been bombarded with negative news and opinion. This immediately changes their perspective. All they can think about is the loss of momentum. They picture a market that’s going nowhere but down; they start to think that they’re doing the wrong thing by staying invested.

To help overcome your clients’ reaction to the falling markets help them keep in mind that, while the Covid-19 virus may be new, volatile markets are not. 

Give them a historical perspective. Reinforce the fact that Wall Street has always ‘climbed a wall of worry’. People who stay invested even in the worst markets tend to do better than those that don’t.

Take charge of clients’ expectations

When clients feel insecure you need to step up and take charge of their expectations. Stop short term market volatility from shifting their focus away from their long-term plans. Remind clients that their plan - based on their goals and risk tolerance - was designed specifically for them and it still makes sense to stick with it.

When markets contract, your clients require a reassuring presence. Tell them that there’s no reason to panic. Manage their behavior – so they can sail through periods of volatility without throwing in the towel.

They hired you to worry so that they don’t have to. Make them see that they can trust you to do the right thing by them. You can and will help them achieve that comfortable retirement they long for.

Staying invested doesn’t mean doing nothing 

Human nature dictates that when catastrophe hits we want to act - it’s a case of ‘fight or flight’. Doing nothing goes against the grain. While you want to keep clients invested that doesn’t mean simply sitting back and taking no action. 

This could be a good time to sit down with clients and discuss other financial and tax planning opportunities. Re-running their projections for retirement etc. may highlight adjustments that need to be made. 

By helping clients adjust their personal budgets, and making contingency plans, they will feel you’re managing their investments proactively. This will reassure them and give them confidence you’re looking after their money wisely. 

Despite the crisis, you still need to grow your business

This is one of the most challenging tasks of all: Focusing on current clients whilst attempting to scale your business. Your time is a valuable commodity so you need to apportion it correctly when it comes to looking after your existing clients and finding new ones.

You may not want to reach out to potential clients at this time but let prospects know you’re still open for business.

Position yourself as a thought-leader by hosting online seminars. Update your website with helpful information and news. Publish relevant blog posts along with data e.g. to show how stocks have dipped and rallied over the last 100 years (to illustrate market recoveries). 

When prospects come to you - follow up promptly

Most financial advisors are not happy with cold-calling during the crisis. However, you may find you’re seeing an increase in the number of calls you’re getting from prospective clients. Some clients may be unhappy with their current advisors and are thinking of changing. Others may be sitting on the sidelines with cash and need to discuss their options. 

When a prospect attempts to contact you via your website, social media, or via any other means, aim to respond within one hour. If you can respond more quickly so much the better. This shows you’re on top of things and that you see their queries as a priority. 

Prepare for a virtual meeting by sending out an accurate agenda. And once the meeting’s over send out a follow-up email asap with a recap of the conversation and include action items. Make use of automation to ensure you create and send documentation in a timely fashion. 

During these stressful times, you need to emphasize your unique value to clients. By maintaining close contact with them, making adjustments as necessary - and helping them stay focused on the bigger picture you will provide them with peace of mind. 

And, while you may not be actively prospecting at the moment, make sure prospects can find you. When potential clients get in touch, engage with them quickly and efficiently. This will give you the best chance of winning their business in the future. 

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