A high percentage of your clients are worried or confused about what might happen to their portfolios, their jobs, and their future lifestyles. Even though there is much uncertainty in the economy and the markets, you can provide an important service to your clients that will both lower their anxiety and reduce the likelihood they will fire you if the market should fall further.
That service is to equip your clients to address worst case scenarios. You execute this by raising the WHAT IF scenarios and create contingency plans. These scenarios need to include:
- What if the S&P falls back to 500?
- What if the bear market continues for another 4 years?
- What if the client loses their job?
- What if a family member loses a job and you have to support them?
- What if we are at a bottom?
By raising the WHAT IF’s, you help clients articulate their fears and concerns. This conversation helps address the concerns about their investments and helps the clients identify the specific steps they should be taking now. Their action plan may include cutting back on expenses, creating a bigger emergency fund, or adding more income investments to their portfolio.
There is another important reason to do this. During the wild ride in October, we conducted a special session on “How to Deal with Panicked Clients and Roller Coaster Markets”. During the session, our guest psychologist explained that the anxiety clients feel will intensify unless the situation resolves or the person takes what they feel is productive action. When people are left to “stew in the juices” of their anxiety, they feel out of control. This will eventually lead to either an explosion (anger at you) or a melt-down. Neither is healthy for the client or for your relationship.
By helping clients “face the music”, you get them into action. This is healthy for both your clients’ financial health and your relationship with them. By raising these issues and helping your clients develop contingency plans, you also demonstrate that you are someone they can count on in a difficult situation.
For a list of potential WHAT IF scenarios you might raise, Contact Us and give us your contact information.