Ideas. Lessons Learned, and Occasionally, Opinions

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On February 11, 2019
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Our speaking engagements put us in contact with many of you smack dab in the mayhem of one of the stock market’s most volatile 60-day periods in memory and the worst December since 1929.  Clients have a "relationship" with their money, and when that deeply personal relationship ends or takes a unilateral relational break, they grieve. So when this period happened, and when it inevitably happens again, what do you say to frightened, angry, grieving clients?

Many advisors told us they said (in language that was sometimes more colorful to emphasize the point): "I know how you feel. My portfolio is doing the same thing, and it hurts!"  We saw similar words in various sources, but the gist of the message was the same: "I get it. I know exactly what you're going through because I have money in the market, too."

I understand the good intent. You want to reassure clients they are not alone in their sorrow over wild volatility and steep market declines, since your portfolio took the same proportional hit. Still, the basic grief support principle holds: each person’s grief is unique, even it’s a similar loss. Saying “I know how you feel” during market volatility is as unhelpful as saying it when your client’s parent dies. 

Seek First to Understand

The old saw "seek first to understand" is precisely the correct tool to use here. It is fine to acknowledge that you have a similar experience, but don’t stop there. Allow for each client’s uniqueness by asking questions that allow them to tell their story and get you on the same team. 

One option could be something like this: “I’m a financial professional, but when things like this happens in the market, everyone gets twitchy. I know it's not rational when I feel that knot in my stomach. I know it’s not going to last because I always allocate every client’s portfolio just like my own, in ways designed to withstand these market swings. But logic doesn't dictate emotions, and so I still feel it. Do you feel it that way when you hear the market news, or how is your reaction different?” This helps allay the fear and blame, because you are treating the client’s portfolio as if it were your own. It also creates a sense of teamwork and problem-solving. 

If you rode out the 2008/2009 mayhem with clients, you can include: "In your mind, how is this one similar or different from 2008?  Are there things we did or discussed then that might be helpful for us this time?"

Then you can follow up with: “So tell me, what is the worst that you could imagine happening to you financially right now?” Keep asking “What else?” and saying “Tell me more” until you have all the major fears on the table. Then ask, “Since these are your worst fears, what can we do together to keep you safe? I think we’ve done good work together to set you up to weather the storm, but we can always tweak things if you want. Perhaps we should stay in closer touch during this time, too. What seems right to you?”

When you ask open-ended questions like these, you find out what's going on in their heads.  Knowing those things doesn't make money come back. It doesn't mean you haven't got work to do to help them sort out their choices and stay the course. But it might make the difference between clients switching away from you vs. ensuring that you are moving in lock-step together through frightening times.

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