March 12, 2018 / by Don Connelly / Investing Wisdom / 0 comments
According to leading psychologist Danial Kahneman, people often form responses instinctively – accepting the first judgement that comes to mind. When left to own devices, we’re apt to make poor decisions based on fallacies or personal biases. And this is never truer than when it comes to investing.
The greatest challenge faced by any financial advisor is that of keeping clients invested for the long term. When the markets are down clients become anxious – they instinctively want to move their money out. Alternatively, they may want to start chasing ‘hot stocks’ in a bid to boost performance. Either way, they’re at risk of abandoning their long-term financial plan.
It’s your job to step into the breach and stop clients from making bad decisions. You need to act quickly to keep them invested.
Here’s how to stop clients from making bad decisions and help them stick to the plan – no matter what the market conditions are.
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In this category you will find blog posts with tips and shared wisdom about investing. Some posts are from Don Connelly’s experience in general and others are prompted by real-life people questions to Don.
4 Things Clients Need to Know about Volatility
June 18, 2018 / by Don Connelly / Investing Wisdom / 0 comments
When markets are volatile investors can get spooked and start to question their investment strategies. Especially if they’re new to the process of investing. This could prompt them to withdraw from the market and wait on the sidelines until things get better.
As their financial advisor you’re there to help them see things in perspective. By helping them understand the nature of volatility they will find it easier to stick to their plan.
Here are four things about volatility you need to explain to them right away.
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What Clients Need from You to Stick to The Plan
June 11, 2018 / by Don Connelly / Investing Wisdom / 0 comments
To get clients to stick with their long-term investments you need to get inside their mindset and understand how they think and feel. If you know how your clients will react in the face of market volatility, you’ll be ideally placed to counter their concerns. If you understand what they need from you in terms of maintaining a long-term relationship, you will know which soft skills to focus on.
Here are a few things clients need to help them persevere with their long-term investments.
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How to Keep Clients Motivated and Stop Them from Making Bad Decisions
March 12, 2018 / by Don Connelly / Investing Wisdom / 0 comments
According to leading psychologist Danial Kahneman, people often form responses instinctively – accepting the first judgement that comes to mind. When left to own devices, we’re apt to make poor decisions based on fallacies or personal biases. And this is never truer than when it comes to investing.
The greatest challenge faced by any financial advisor is that of keeping clients invested for the long term. When the markets are down clients become anxious – they instinctively want to move their money out. Alternatively, they may want to start chasing ‘hot stocks’ in a bid to boost performance. Either way, they’re at risk of abandoning their long-term financial plan.
It’s your job to step into the breach and stop clients from making bad decisions. You need to act quickly to keep them invested.
Here’s how to stop clients from making bad decisions and help them stick to the plan – no matter what the market conditions are.
Read more
Teach Your Clients Not to Watch The Evening News
November 13, 2017 / by Don Connelly / Investing Wisdom / 0 comments
In our increasingly information-driven society, it’s your job to teach clients not to believe all they hear. They need you most of all when they’re being bombarded with negative news about the markets. Being exposed to excessive information without anyone there to guide them could see your clients making bad decisions regarding their investments.
Here are a few ideas how to make sure your clients stick to the plan despite what the media say.
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The Greatest Challenge Any Client (and Therefore You) Will Ever Face
September 18, 2017 / by Don Connelly / Investing Wisdom / 0 comments
Sticking with the plan despite tough market conditions is the greatest challenge both you and your clients will face. That sudden drop in cabin pressure when the markets fall is the acid test of your relationship building skills. If you aren’t prepared ahead of time, neither will your clients be.
Whether your clients will stay the distance depends on you.
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Put Investing in Terms That Clients Can Understand
June 26, 2017 / by Don Connelly / Investing Wisdom / 0 comments
Everyone knows that cars go down in value. That’s just the way it is. No matter what you pay for a car, and no matter how carefully you look after it, it’s going to be worth a lot less than you paid for it. It’s never going to bounce back in value, but car owners are okay with that. They are pre-conditioned to the loss. However, clients don’t see their investments this way. They think investments are only supposed to go one way – up. When investments go down, clients feel they have lost money, even if they have not sold out. They will take a hard loss on a car and not bat an eye, yet they can’t stomach a paper loss in their portfolios.
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Remind Your Clients Investing Is a Marathon
May 8, 2017 / by Don Connelly / Investing Wisdom / 0 comments
Despite regular and sometimes frightening dips markets continue to rise incrementally over time, continually setting new highs. The problem is that many clients disbelieve this; they panic when the market temporarily falls. As their financial advisor, it’s your job to keep them on track.
You need to get them over their short-termism and make them see that their focus should be on 20, 30 or 40 years from now – not on this afternoon or next week.
Use all the tactics at your disposal to illustrate that investing is a marathon not a sprint.
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Educate Clients What It Really Means to Invest
March 20, 2017 / by Don Connelly / Investing Wisdom / 0 comments
No matter how inherently intelligent your clients may be, never assume they have a clear understanding of what ‘investing’ really involves. For many people a financial plan consists of having money in an account that continually goes up in value. To them, a share of stock is a lottery ticket, no more and no less.
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You Have to Take Risks to Reach Your Goals
October 17, 2016 / by Don Connelly / Investing Wisdom, Storytelling, analogies and power phrases / 0 comments
Here’s a Mr. and Mrs. Client story to help you explain to prospects and clients why taking risks is necessary.
Mr. and Mrs. Client, I know you know what to do. Let me show you how to do it.
You can watch the video or read the transcript, if you prefer.
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What If Clients’ Sentimental Equity Holding Doesn’t Match Their Risk Tolerance?
April 18, 2016 / by Don Connelly / Investing Wisdom, Managing the Relationship / 0 comments
Today I’d like to share with you an email I received a while ago from Mike at Edward Jones. ¨What is the best way for an FA to approach a client about an equity holding that has sentimental value to the client but does not fit their risk tolerance? I have a 75-year old widow with over 50% of her net worth in Disney stock. I also have a widow who inherited her husband’s IRA at another firm. She had no idea what was in it, it was with an advisor she doesn’t know. Turns out it is 60% in aggressive investments, but she still wants to keep it there. Help.¨Listen to Don’s answer or read the transcript.
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