The recent turbulence in the world and in the stock market will create unique challenges for advisors during this upcoming RRSP season. The downturn in the economy has reduced the market value of our clients' portfolios and negative returns have created anxiety among many investors.
However, within this doom and gloom exists an opportunity to separate ourselves from our competitors. Bear markets create unique opportunities to generate additional business and to build loyalty among our existing clients. Why? Because many advisors act like investors — they hang out on sidelines when the market is down and jump in when the market is hot.
1. The following steps will help you generate additional revenue and create loyalty among your clients during bear markets or periods of volatility: Communicate with your clients. Stay in frequent contact with your clients via phone, e-mail or snail mail, especially during periods of volatility. Your clients need to be reassured of their investment decisions.
2. Filter the information you digest. The media is filled with negative bias during market downturns. Look for articles and audio materials that focus on positive components of the markets and long-term investing. There are many excellent historical charts which highlight the most profitable time to invest is following a significant market correction.
3. Stress the value-added services you provide. A qualified advisor can create a portfolio that is tailored to meet a client's risk profile. Stress past successes and use third-party endorsements. Also find out if there are any other aspects of your client’s financial portfolio which needs repair. This is a perfect opportunity to let them know that you can quarterback their financial team and make sure that nobody drops the ball during turbulent times.
4. Take advantage of the reduced competition. With the amount of cash parked in money market funds, it appears equity investing has gone out of style. Stress to clients who have long-term perspectives that they have a unique opportunity — many equity funds have significantly reduced in value and your clients can buy these assets at a deep discount. The Dow Jones Industrials hovered around 1700 points following 1987 crash. The long term investor who weathered this storm were rewarded with very handsome profits.
Never follow the pack. Successful advisors have the foresight to see opportunity in turbulent times. They have the discipline to face their clients and preach the same principles during market downturns that they do during periods of economic expansion.
Source: Free ArticlesHowever, within this doom and gloom exists an opportunity to separate ourselves from our competitors. Bear markets create unique opportunities to generate additional business and to build loyalty among our existing clients. Why? Because many advisors act like investors — they hang out on sidelines when the market is down and jump in when the market is hot.
1. The following steps will help you generate additional revenue and create loyalty among your clients during bear markets or periods of volatility: Communicate with your clients. Stay in frequent contact with your clients via phone, e-mail or snail mail, especially during periods of volatility. Your clients need to be reassured of their investment decisions.
2. Filter the information you digest. The media is filled with negative bias during market downturns. Look for articles and audio materials that focus on positive components of the markets and long-term investing. There are many excellent historical charts which highlight the most profitable time to invest is following a significant market correction.
3. Stress the value-added services you provide. A qualified advisor can create a portfolio that is tailored to meet a client's risk profile. Stress past successes and use third-party endorsements. Also find out if there are any other aspects of your client’s financial portfolio which needs repair. This is a perfect opportunity to let them know that you can quarterback their financial team and make sure that nobody drops the ball during turbulent times.
4. Take advantage of the reduced competition. With the amount of cash parked in money market funds, it appears equity investing has gone out of style. Stress to clients who have long-term perspectives that they have a unique opportunity — many equity funds have significantly reduced in value and your clients can buy these assets at a deep discount. The Dow Jones Industrials hovered around 1700 points following 1987 crash. The long term investor who weathered this storm were rewarded with very handsome profits.
Never follow the pack. Successful advisors have the foresight to see opportunity in turbulent times. They have the discipline to face their clients and preach the same principles during market downturns that they do during periods of economic expansion.
About the Author:
Lorne S. Marr, President of Lorne S. Marr Insurance Services Ltd. has been a practicing financial planner since 1993 having graduated from the University of Windsor with an MBA. In the year 2000 he completed the internationally recognized Certified Financial Planner designation. He is a recognized expert on Life Insurance in Toronto
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