- 2-Minute Article
3 Tactics to Frame the Conversation During Market Volatility
Three tactics to help clients stay focused on their goals during market volatility.
With a 24-hour news cycle and constant updates on market performance, your clients may be tempted to react emotionally to market volatility instead of sticking to their long-term plan. These tactics can help you use market volatility as an opportunity for more productive conversations that help them stay focused on their goals during uncertain financial times.
Review and Reassess Financial Goals
When clients call concerned about a disruption in the markets, use the opportunity to:
- Suggest a one-on-one meeting to go over their financial plan, review where they are currently and where they want to be with both short- and long-term objectives.
- Recognize that client needs evolve over time. As you work with your client to achieve financial security, this can offer the opportunity to introduce new products and investment strategies that meet their changing needs or objectives.
Help Them Understand Historic Market Performance
When signs of volatility appear in daily headlines, encourage your clients not to respond with a rash or hasty decision. Instead, discuss how the current performance may be affecting their portfolio in the short term and what their feelings are about the volatility. Provide them with historical examples of stock market performance over both the short and long term to help them better understand that markets typically have both higher and lower performance averages. For example, the stock market was off to a rocky start in 2016, when the Dow Jones Industrial Average was down 10% during the first two weeks of the year, which was a new record. But about a year later, the markets hit 20,000 for the first time ever in early 2017.1
Review Your Client’s Risk Tolerance
After an initial meeting, your clients may feel that their risk tolerance or goals from the past have evolved. Having this conversation can help you realign their investment strategy to better match their goals.
Changes in the market are a given, but it doesn’t have to derail any long-term plans. Market disruptions happen and they can be a great opportunity to connect with your clients, review their overall plan, and even introduce new products appropriate to their needs.