/ by Don Connelly / Best Practices / 0 comments
As I write this in mid-October, 2020, the stock market is sitting right at an all-time high. But there’s still an ongoing pandemic – and a presidential election looming. Either of these things can cause big short-term swings in stock prices.
That means things are pretty risky at the moment. In the short-term, anyway.
As financial advisors, we have to help our clients understand that risk, and help them manage their money so they can accomplish their financial goals, but also so they can sleep at night in the meantime.
Those of you who have been around since before 2008 know this process well. For those of you who are just getting started, here’s what you need to know.
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Put Risk in Perspective: What Do Going to The Dentist and Investing Have in Common?
/ by Don Connelly / Investing Wisdom, Storytelling, analogies and power phrases / 0 comments
I’ve got a good story about how two Advisor friends of mine, Eric and Lisa, deal with their clients when the markets become unsettled. They help their clients put risk in perspective. When times get tough, keep this story in mind.
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How to Talk to Clients About Market Volatility
/ by Don Connelly / Investing Wisdom / 2 comments
You don’t hear people talk much about market volatility until stock prices suddenly sell off. But when your clients watch their portfolio value decline unexpectedly, it can be terrifying, leading many to make potentially costly mistakes, such as selling into a steep market decline. Though we’ve experienced many volatile markets over the last 20 years, advisors must help clients understand that volatility is not their enemy.
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5 Things Nervous Clients Need from You
/ by Don Connelly / Best Practices / 0 comments
Let’s chat about the backbone of the business, client relationships. Client relationships are fragile. As soon as their money’s exposed to volatility, clients are on an emotional roller coaster ride and they need a lot of attention. And all too often, we get caught up in the details of products and services we’re offering to notice that our attention may have slipped. And I can tell you without hesitation that the minute your client feels your service is no longer personalized, he or she becomes your competition’s best prospect.
Watch this video episode or read the transcript below to learn a few ideas on how to make sure your clients hold you in high esteem.
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Financial Advisor Do’s and Don’ts During Extreme Market Volatility
/ by Don Connelly / Investing Wisdom / 0 comments
Financial advisors play a vital role in helping clients achieve their most important financial goals. But where they really earn their fees is during times like these, when helping clients navigate the choppy waters of extreme market volatility. Clients look to their advisors to guide them through scary times and reassure them that everything will be okay.
Emotions run high when the market turns volatile. When stressed, humans instinctively want to do something and take some kind of action to reduce or eliminate the threat. That’s when mistakes typically occur. The value of a financial advisor rises in direct proportion to the anxiety levels of their clients, who look at volatile market swings as a threat to their financial security. The critical role of financial advisors is to keep their clients from making costly behavioral mistakes. During periods of extreme market volatility, there are some things advisors must do and things they should avoid doing to maximize their value to their clients. Here are a few.
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Keep Your Clients Focused on What’s Knowable and Important
/ by Don Connelly / Managing the Relationship / 0 comments
The media has always run rampant with scary headlines. That’s how they increase readership or website traffic. However, in this period of increased market volatility, economic uncertainty, geopolitical upheaval, mixed COVID signals, and deepening political divisions, the headlines can be incredibly overwhelming or, at the very least, extremely distracting.
Trying to consume all the news coming at us 24/7 is like trying to drink from a firehose. It’s critical to understand that the barrage of bad news and hype around market events can trigger emotional reactions that often lead to making costly decisions around their finances.
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How to Create a Systematic Communications Strategy
/ by Don Connelly / Managing the Relationship / 0 comments
By now you should know the importance of staying engaged with your clients. Clients who feel less engaged are less likely to trust their advisor relationship and more likely to bolt when things go south, if not before. At a minimum, they will feel less inclined to recommend you to others. Suddenly, it’s as if you’re spinning desperately on a hamster wheel with little hope of getting off.
Most advisors would agree that having a systematic communications strategy is essential for adding and retaining clients. The challenge for many is how to go about it. The exact tools and methods an advisor would use could vary greatly depending on their communication preferences, prospecting methods, and available time and resources. Here are a few steps to get you started.
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Finding the Right Mentor
/ by Don Connelly / Best Practices / 0 comments
Financial advisors must bring with them some essential traits. They need to be ambitious, courageous and thrive on hard work. That’s just the minimum required to survive the early years. From there, the learning curve is steep, with much to learn—technical and analytical skills, product knowledge, and critical soft skills—all while riding a wild rollercoaster of ups and downs. Those who choose to go it alone struggle mightily to get to the next level. But those who develop a successful relationship with the right mentor often flourish.
Mentors are vital to financial advisors’ growth and development, helping them achieve all their goals and prepare them to face even the harshest of markets with equanimity.
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How Financial Advisors Should Manage Emotional Clients
/ by Don Connelly / Managing the Relationship / 0 comments
People aren’t rational. We’re all creatures of emotion. Good salespeople bear that in mind. Whatever your training and education, as financial advisors, we’re not engineers. We’re not technicians. Not in the sales interview.
We deal with people first.
Not numbers. Not machines.
Advisors who understand this are going to do better than advisors who don’t.
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Being a Financial Advisor in Uncertain Times – What You Need to Know
/ by Don Connelly / Best Practices / 0 comments
As I write this in mid-October, 2020, the stock market is sitting right at an all-time high. But there’s still an ongoing pandemic – and a presidential election looming. Either of these things can cause big short-term swings in stock prices.
That means things are pretty risky at the moment. In the short-term, anyway.
As financial advisors, we have to help our clients understand that risk, and help them manage their money so they can accomplish their financial goals, but also so they can sleep at night in the meantime.
Those of you who have been around since before 2008 know this process well. For those of you who are just getting started, here’s what you need to know.
Read more
Convincing Clients of the Futility of Market Timing
/ by Don Connelly / Investing Wisdom / 0 comments
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.
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