When markets are weak, cost of living is rising, Government deficits are looming, investors are nervous and our profession is affected by continual legislative change, the thought of assuming the foetal position under your desk may be appealing.
As an adviser, we know that markets are cyclical, and yet when the lower end of the cycle seems to drag on for a long time it is easy to understand how advisers can feel pretty beaten up.
In the past week, I’ve spoken with a number of people from various parts of the finance profession who all seem to have their grumpy pants on. Financial planners experiencing cash flow issues and a lack of new client activity, accountants concerned about the upcoming APES230 ruling, fund managers lamenting the fact that everyone is still sitting in cash, stockbrokers bored to tears as clients aren’t trading, and nor are the instos (because, yes, people are sitting in cash).
And then I speak to my Elixir colleagues (our team of coaches) and some of our clients and I get a whole different outlook. The optimism and calm that radiates from advisers who are enjoying a profitable business with happy clients and a good outlook on the future of the profession is contagious.
It is no surprise to me, that the activity and attitudes are self-perpetuating. Do some great things, great things happen, and that leads to further activity. On the flipside, when times are tough and we focus on that, it can lead to reduced activity which leads to further tough times, and the downward spiral gains momentum.
I read a great article last week that eloquently addressed the concept of taking a positive approach even in uncertain times, in order to move forward.
“If we accept our negative present, we block the path to a new and brighter future”.
So I dug into our archives and thought I’d ‘re-purpose’ an article I wrote for IFA magazine (here and here) that shared some action items that you can do when the markets are tough and your clients are skittish.
As we have said before, with difficulty comes opportunity. Now is a perfect time to deepen your client relationships and create clients for life…look to your current activity and attitude and you will see an indicator of the future attitude of yourself and your clients!
With that in mind, we have developed our top ten action items to help grow your business and weather the storm:
1. Be proactive in communicating with your clients. Just because a client doesn’t call doesn’t mean they aren’t worried. When markets are tough and their portfolio isn’t performing how they’d like, that is the perfect time to have more frequent conversations with them to discuss the fundamentals of their investments and help them understand what is happening in the markets. Your presence and reassurance will go a long way to reminding them of the cyclical nature of the markets, and most importantly, that you are there to help them take whatever steps necessary to still reach their goals, regardless of market conditions.
2. Be effective when communicating with your clients. How you speak to a client is just as important as what you say to them. Keep a positive attitude, do not be dismissive of their fears, and yet help them see some positive aspects of their situation. Often when speaking with a distressed client, your listening skills will be just as (or more) soothing as whatever you choose to say to them in response.
3. Don’t lock yourself away from the rest of the industry. Make the time to get along to briefings, business development opportunities and take part in teleconferences, and always keep reading and keep yourself up to date with the latest happenings. It is too easy to get caught up in the negative hype, so staying across the issues that cause fear in your clients will help you set the record straight for them which will help set their minds at ease.
4. Go back to your investment concepts 101! People pay you to be their adviser, so advise. Keep it simple, and remember that if you can’t explain it, don’t invest in it!
5. Make sure you conduct your client reviews. You may be meeting more frequently with your more anxious clients, but don’t leave the rest of your clients out of the loop. Make sure you are well prepared for each meeting, and help your clients see the big picture.
6. Maintain your own confidence in troubled times. It is very hard to reassure your clients when you are exuding apprehension and nervousness. Make sure you follow your own advice and don’t get sucked in by the negative propaganda.
7. Don’t forget about your staff. They read the same media and hear the same things from friends as your clients do. Make sure all your staff are educated on what is happening in the markets. Talking to your staff can also be a great way to practice your client conversations.
8. Have systems and processes in place and follow them . Now is as good a time as any to engage some external assistance to focus on your practice management issues and make sure you are running your business like a business.
9. Don’t stop marketing for new clients. Now, more than ever, people need good advice. Whatever your marketing strategy, be it solely through referrals or a more comprehensive advertising and social media program, keep it up and look at expanding it. But always make sure you do not promise what you can’t deliver.
10. Be wise when reducing your overheads. It is always good to look at areas where savings can be made, but always keep your eye on your long-term business plan. The last area you should look at cutting back in is staff (unless they’re problem-generators!). If you reduce your staff numbers, your client service may suffer, which may lead to the loss of clients. Your staff are also often in the best position to alert you to areas within your business where savings can be made.
Just remember, downturns end, and markets will recover. Remember what your clients pay you for. Financial advice is not just about choosing investment portfolios, it is about educating your clients and helping them identify and work towards their goals, regardless of what life or the markets throw their way.
Times may be tough, but I say to you what you should be saying to your clients – this, too, shall pass.