FA Center: The help investors need most from financial advisers is often not about money
How advisers can master the art of hand-holding in turbulent times
We avoid handshakes nowadays. But for advisers, hand-holding (metaphorically speaking) never stops. It’s more important than ever now. Jittery clients express dismay and seek reassurance from a levelheaded financial adviser who can guide them through these scary times.
Just as insurance claim adjusters aim to deliver exceptional service to shaken customers who lose their home in a fire, advisers often pride themselves on calming anxious clients amid brutal market downturns.It’s in these harrowing days that advisers prove their worth and provide psychological succor.
“I started my career in early 2000 when nobody made any money in the stock market, so I learned early on not to pretend you know what’s going to happen tomorrow,” said David Shotwell, a certified financial planner in Lansing, Mich. “Just talk about what we know now” and reinforce the importance of sticking to the long-term plan.
Ideally, an adviser’s hand-holding leaves clients feeling grounded and grateful. They come away thinking, “I’m so glad I’ve got this expert keeping me on track.”
But there’s a right and wrong way to calm agitated clients. An adviser who is naturally excitable will want to speak softer and slower. Pause often to give clients ample opportunity to chime in with questions or comments. Forcing them to interrupt to get a word in adds an aggressive edge to what should be a soothing conversation.
“You can’t beat clients over the head with logic,” Shotwell said. “You need empathy. The client is feeling something real. So we need to listen” before launching into explanations of what’s happening and what it all means.
He knows that one of the main reasons panicky clients call is “they want you to remind them again that they’re OK.” So he obliges, focusing on the long time horizon for their investments and offering historical perspective on bear markets and the inevitable recovery.
“One thing I don’t talk about is risk tolerance,” he said. “You can’t say, ‘You told me you were comfortable taking more risk, so this is what comes with that.’”
Even if true, it’s not productive to raise that point in a severe market selloff. Emotions can flare and tensions can boil over as clients claim that they misunderstood their risk exposure.
For Lisa Kirchenbauer, a certified financial planner in Arlington, Va., calming clients sometimes means less talking and more breathing. When a self-employed, 50-year-old client fretted about her income declining due to the COVID-19 pandemic, Kirchenbauer replied over the phone, “Let’s stop for a second and take a couple of deep breaths together.”
“It worked beautifully,” Kirchenbauer said. “The client said that was really helpful.”
In preparing for fraught conversations with clients, Kirchenbauer might take a few deep breaths herself before picking up the phone. “Whatever it is you need to do so that you show up centered,” she said. “Clients want to hear a calm, reassuring voice.”
Repeating the same points to dozens of clients in one-on-one chats can prove taxing, even if you sound soothing in call after call. Broadcasting your voice for all to hear enables you to reach a wider audience — and calm more people in less time.