Educate Clients about Market Volatility so They Can Confidently Stick to the Plan

Educate Clients about Market Volatility so They Can Confidently Stick to the PlanBlog Posts Recap – What Advisors Read the Most on Our Blog in 2020, part 2

Happy New Year from all of us at Don Connelly & Associates! Hopefully everyone will enjoy good health during the new year, achieving great success both personally and professionally.

As promised, this week we’re posting the second part of the recap blog post, covering two more popular topics our community of Advisors was most interested in during 2020 – market volatility and how to communicate with prospects and clients about it. We’ll also share a few stories and analogies you can use to convince clients to stick to the plan, no matter the market conditions.

If you need help putting things into a historical perspective for prospects and clients, get the VIDEO and PPT presentation, Litany of Disaster, tracing the history of the stock market more than six decades, showing how it weathered through some of the worst disasters in our country’s history, dating back to the 1950’s.

#1. Market Volatility

Provided how turbulent 2020 was, especially when the pandemic first hit Europe and the US back in March, it’s no surprise that one of the most popular topics among Financial Advisors was market volatility and how to communicate about that with prospective and current clients.

While we’re not in a bear market now, we certainly see market ups and downs, and continuous volatility, so here are a few posts on our blog that discuss the topic

  • How to Assure Clients That Volatility Is Part of the Strategy

Unquestionably, the stock market has experienced extreme volatility in the last couple of years, elevating the anxiety levels of investors who grew complacent throughout a historic 11-year bull market. Just as they did throughout the wild gyrations of the 2008-2011 market, investors have grown intolerant of the recent, wild stock market gyrations, resulting in many choosing to make wholesale changes to their portfolio, switch financial advisors, or flee the market entirely.

But, what investors may not understand is that switching between asset classes to avoid volatility can actually have the opposite effect. It is incumbent upon financial advisors to help their clients understand that, with a sound investment strategy and a long-term perspective, volatility can actually be good for a stock portfolio because it has always been the primary force that drives market gains over time. Read more.

  • 4 Misconceptions about Market Volatility Your Clients Need to Be Aware of

As a financial advisor it’s your responsibility to get your clients to stick to their financial plan for the long term. This means you’ll need to change any pre-conceived notions they may have about market volatility. In particular, you need to get across that volatility does not equate to risk or loss.

Here are some common misconceptions about market volatility your clients may have and how to address them. Read more.

  • Helping Clients Understand the Normalcy of Market Corrections

As a financial advisor, you work closely with your clients to craft investment strategies tailored to their objectives and risk profiles, and then monitor them over time. That very well may be the easy part of your client relationship. The more significant challenge you have as an advisor is to make sure your clients stay the course with their strategy even in the midst of a steep market correction.

One of the primary responsibilities of a financial advisor is to convey to their clients that the only concern they should have about a market downturn is not how deep it falls or how long it lasts, but how they react to it. After all, no one can predict when a market correction will occur, but we know that it will. After the longest bull market in history, clients tend to forget that stock prices can go down as well as up, and that market corrections are quite normal. That confers upon advisors the responsibility of educating their clients on the inevitability of market corrections and how they should react to them. Read more.

  • Convincing Clients of the Futility of Market Timing

We will probably never admit it, but most of us are lousy timers, and, of course, none of us can predict the future.

How often have you tried to shift your way through stop and go freeway traffic to end up in the slowest lane again?

For investors who try to time the market, the actual costs of underperformance and lost opportunity are invariably greater than the potential benefit. Read more.

If you need help preparing clients for the wild emotional journey long-term investing really is, get the CD or mp3, Simple Truths for Investors.

#2. Stories and analogies to be understood and to motivate prospects and clients to make good decisions

And the final topic that we’ll include in our blog post recap series is storytelling. We will share some stories and analogies you can and should use with prospective and current clients to help you build trust and convince them they need to stick to the plan no matter the market conditions.

  • 8 Stories to Help You Build Trust and Open Accounts

As I write this, it’s presidential campaign season. The candidates are all about telling their stories. They want to get their preferred narratives out there, in front of voters. Successful candidates are very well rehearsed on these stories. They constantly make references to these stories, in the effort to brand themselves, differentiate themselves from other candidates, and inoculate themselves against attacks from competing candidates and their staffs.


Because it works!

It works in financial services, too.

In fact, it works so well that I don’t want you to have a single story defining you. I want you to have at least eight! And I want you to know them cold. Read more.

  • Three Situations when Analogies Can Help Allay Clients’ Concerns

As their advisor it’s your job to stop clients from worrying unnecessarily and making bad decisions. You need to find a way to check their behaviors and reassure them that they should follow your lead.

Analogies are a great way to allay clients’ concerns and get across why what you say makes perfect sense. Here are three situations where it will pay you to use analogies to keep things on track. (Hint: you’ll help them understand volatility, you’ll help them when the market dips and panic sets it, and you’ll help them stop watching the evening news.) Read more.

  • Five Analogies Financial Advisors Can and Should Use with Clients

What we find very easy, clients often find difficult to digest. Even when you think you’re getting across your points  clients can be baffled by your financial knowledge. To get across your ideas so that clients will understand, use analogies.

Advisors who use storytelling and analogies to convey strategies and concepts have a competitive advantage over those that don’t. Analogies help to paint a powerful mental picture that connects to a client’s emotions. Using vivid analogies also helps to leave a powerful impression once clients have left the office – impressions of you and of the message or takeaway. (Hint: the analogies in this post will help you illustrate why you are important, why clients should follow you, why stick to the plan, and more.) Read more.

  • 6 Analogies to Use When Convincing Clients to Stick to The Plan

Stories and analogies are great ways to capture a client’s attention and get them to see things from a different perspective. When used correctly they’re highly useful tools to help persuade clients to act in the way you want them to. Analogies are especially effective because clients come to understand what you’re saying by drawing their own conclusions.

Here are six great analogies to help your clients see that they should stick to the plan. Read more.

If you’re up for the task to hear hundreds of stories, analogies and power phrases, all designed to help you simplify your message, get the 2-CD set or mp3, Say It So It Makes a Difference.

And if you’re new to the business or you’re a veteran who feels stuck because you’ve strayed away from the basics that made you successful in the first place, watch this 4-minute video to learn how our program ‘Become Brilliant at the Basics’ can help you!

See program details and enroll today!

24 video lessons. 24 exercises. 5 LIVE group coaching sessions (included with the coaching program only). And an enormous advantage over your competition. Enroll today.

This program is available as a self-paced course (always open, join today for $149) or as a 12-week coaching program (open only a few times a year, limited to 25 Advisors at a time – click the button for details on when the next program starts)


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