Running your business and managing clients
during periods of market volatility

Market fluctuations are part of long-term investing, but the 24-hour news cycle means clients are bombarded with breathless, anxiety-producing information whenever they turn on the television or check their phones. And market or economic reporting is no longer contained to traditional business news channels. Articles offering advice to “recession first-timers” have started popping up everywhere. The outcome? Increased uncertainty and fear about the future that likely results in a lot more phone calls and emails to your office.

In the past, it might not have been too challenging to field questions from a few concerned clients when the market takes a dip. But I’ve heard a lot of advisors express a desire to be more proactive and less reactive to better serve their clients and keep their business operating smoothly—they just aren’t entirely sure where to start.

One thing you can do is create a client communications task force. The task force is a cross-functional group that convenes to assess major market moves, economic news and other information that might trigger stress or emotional reactions from clients. The objective is to assess the situation, discuss potential client needs and determine the appropriate response. It may sound extreme, but a client communications task force can help you to ensure your client communications are clear, consistent and quickly disseminated.  

Assembling a client communications task force

The group itself should be small but represent a variety of disciplines. Here are a few key member roles to consider: 

Group lead: the main person keeping tabs on market moves and who is empowered to call for task force meetings.

Analyst lead: this person should be able to explain both what’s happening and why, or the driving forces behind it. The analyst lead should come prepared to the task force meeting to brief the team on the situation.  

Client lead: the person who spends the most time talking to clients and understands the concerns, questions or issues on their minds. The client lead should be prepared to share what they’ve heard from clients and which clients might be most affected or concerned.

Marketing lead: someone who can finesse client communications—whether it’s talking points, emails or web copy—and can work with the appropriate people to get it published/pushed out to the right people.

Logistics lead: someone skilled at tracking open items, assigning deliverables, pushing for follow up and monitoring the follow through of team members. This person should be tasked to create a one-page template to focus the group’s conversations, take and organize the notes. There are several template examples available online and yours should be tailored to your business/client needs. Think about including sections for a brief summary/background, client feedback and potential impact, topline talking points and the communication plan.  

Collaborate on the rules of engagement

Next, hold the first task force meeting when things are relatively calm, if possible. Open the meeting by reiterating the goal—to proactively support clients with appropriate communications during periods of volatility. Explain the roles of each member, then open the floor for questions and discuss how the group can best work together. Guide the conversation with the following ideas: 

  • What market moves or economic news would trigger a task force meeting? This gets everyone thinking about a range of “what ifs” and reinforces the potential impact having a core team can provide to clients. (Example: a % dip in the market, X days consecutive losses, unexpected economic announcements, etc.)
  • What’s the team commitment for meeting? (Meet within a day or same day? Are early morning or late evening calls acceptable to the group? Are they expected to “drop everything” in order to meet or prepare for the meeting?)
  • What are the various client communication tools/tactics available and their corresponding level of effort to produce?  This gives everyone a baseline understanding of what can be pushed out quickly vs. what may take more time. (Ex. phone calls, conference calls, emails, websites or blogs, reliable resources of information and existing or new materials.)
  • How will you communicate internally to ensure everyone is aligned on messaging?

Ultimately, this team should be nimble and able to shift or reprioritize other business-as-usual efforts to focus on urgent client communications. 

Best practices for client communications

The most critical aspect of the task force’s creation and subsequent meetings is deploying the proper client communications. Your one-page template can synthesize all the info and contain a plan for client communications, but the actual messaging can still miss the mark. This isn’t the time to expound a dense market analysis to appear intelligent. Clients crave information that helps them better understand what’s happening and feel understood by you. When crafting your client messaging, there are three elements to keep in mind.  

Be empathetic. No matter the medium, it’s important to first acknowledge how clients might be feeling. Showing empathy demonstrates your capacity to put yourself in the client’s shoes—volatility is public, but the impact is personal. Further, when humans experience intense emotions like fear or stress, those feelings can act as obstacles to a productive conversation. Leading with empathy in communications can help clients feel understood and supported, potentially quelling the intensity of their emotions enough to hear your take.  

Be concise. What’s the single most important thing for clients to understand? While a few clients might want a deep dive into the mechanics, the majority likely want a topline view. Cut through the noise with a clear message or explanation that’s jargon-free.  

Reframe the situation. Because the communication is born from tumult in the market, it’s easy to respond and explain but overlook the opportunity to reframe the situation. Remind clients that volatility is part of any long-term investment plan and, though it may feel uncomfortable, it doesn’t often require major course correction. Even something simple such as, “Remember, the last time we went through a period like things everything turned out ok even though we didn’t change our plans.” can gently jog their memory of a past experience. Bringing it back to the fundamentals your business stands for and the deep commitment to your clients is always a helpful reminder in a tense situation.

A client communication task force is an excellent way for clients to feel proactively supported by your and your team when the market is bumpy. Clients will appreciate hearing from you, your analysis of what’s happening and what they need to know. A truly elevated client experience is one that shines amidst all the noise.  

The views expressed in this article should not be considered investment advice or recommendations to invest in any security or adopt any investment strategy.

From now until normal: 7 ways to reframe and elevate the client experience

If normalcy is many months away, how can advisors provide exceptional value to their clients now?

Productivity in unprecedented times

To thrive in the new normal, advisors may need to reorient themselves both physically and psychologically. Here’s three tips.

Coronavirus, clients and the role of a financial advisor

Escalating anxiety calls for a reliable voice of reason.

Advisor’s guide to the psychology behind goal setting

As more advisors adopt goals-based investing into their practice, the amount of client interactions naturally increases as advisors seek to define (and refine) the full scope of their client’s goals.

Let’s elevate practice management in 2020

Right now, thousands of athletes around the globe have their sights set on one goal—the 2020 Olympic and Paralympic games in Tokyo.

Are you ready for a new decade of financial advice?

This past decade, financial advisors and the finance industry was shaken up and forever changed.

How to help clients be prepared for the unexpected

Having these preparatory conversations with clients are especially relevant now as many begin to reflect on the previous year and gear up for the next one.

Can a group supercharge your growth? This one might.

For the last few years I have focused on helping advisors understand how to create an elevated client experience.

Three ways to reframe referrals (that work)

Let’s be honest, that old way of asking for a referral doesn’t work for a lot of us.

Running your business and managing clients during periods of market volatility

In the past, it might not have been too challenging to field questions from a few concerned clients when the market takes a dip.

Advisors, how are your storytelling skills?

Millions of shows scream for our attention to be watched and, while it can be overwhelming, it reflects an underlying human truth—we love good stories.

The professional contacts every advisor should have

Advisors are hired and given a license to discuss at-length, a topic that for most people, is a pretty touchy one—money.

The fundamental flaw in traditional referral requests

In my observation, many financial advisors ask for referrals in the same way.

What grieving clients need from you

A number of commercials for financial advisors focus on being with clients for life’s high points—graduations, home purchases and retirement.

Best practices for advising couples

Of the 60 million married couples in the US, it’s unlikely that any fell in love over a shared investment risk tolerance.

Anchoring and financial decisions

Anchoring can become dangerous when clients allow anchors to influence their performance expectations.

What Are the Risks?

All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. Special risks are associated with foreign investing, including currency fluctuations, economic instability and political developments. Investments in emerging markets involve heightened risks related to the same factors, in addition to those associated with these markets’ smaller size and lesser liquidity. Investments in fast-growing industries like the technology sector (which historically has been volatile) could result in increased price fluctuation, especially over the short term, due to the rapid pace of product change and development and changes in government regulation of companies emphasizing scientific or technological advancement or regulatory approval for new drugs and medical instruments.

Important Legal Information

The companies and case studies shown herein are used solely for illustrative purposes; any investment may or may not be currently held by any portfolio advised by Franklin Templeton Investments. The opinions are intended solely to provide insight into how securities are analyzed. The information provided is not a recommendation or individual investment advice for any particular security, strategy, or investment product and is not an indication of the trading intent of any Franklin Templeton managed portfolio. This is not a complete analysis of every material fact regarding any industry, security or investment and should not be viewed as an investment recommendation. This is intended to provide insight into the portfolio selection and research process. Factual statements are taken from sources considered reliable, but have not been independently verified for completeness or accuracy. These opinions may not be relied upon as investment advice or as an offer for any particular security. Past performance does not guarantee future results.