How to Calm Clients During Coronavirus

How can financial advisors help their clients who are worried about the coronavirus’ volatile impact on global markets? In periods of market turmoil, financial advisors are often contacted by clients who are anxious about their finances. Those anxieties may be magnified right now as the coronavirus is not yet fully understood and the market volatility seems unprecedented.

The best steps advisors can take to calm their clients is to acknowledge their concerns, make adjustments if necessary, keep communicating, and provide long-term perspective.

Let them vent

When advisors receive worried calls from clients, it’s important to acknowledge their concerns and to be sensitive to their situation. When you let your client vent, they will appreciate you taking the time and likely be more open to hearing your views.

Make portfolio adjustments if absolutely needed

From a financial planning perspective, epidemics are like any other geopolitical upheaval. Clients should be invested in the stock market only to the extent they can stomach risk both psychologically and financially. If a severe market downturn makes your client lose sleep, then they should re-evaluate their investment policy and portfolio allocation.

For many investors, it’s important to sit tight for the time being. For others, a market downturn may present opportunities for tax-loss harvesting, portfolio rebalancing and perhaps even good buying opportunities.

Keep in touch

Certainly, social media posts, emails and newsletters are important and can be effective, but it may be better to pick up the phone and speak with clients directly to ensure that they know what you know — that their portfolios were constructed with long-term goals in mind and that their portfolios are being monitored daily.

Even if clients aren’t calling you with their concerns, it’s still a good idea to reach out to them. The communications don’t have to be lengthy or complex. What’s important is to at least remind your clients you’re working hard to support their goals.

And in this current situation, they may also want to know how you are managing your business (working remotely, doing Zoom meetings instead of in person client meetings, etc.)

Provide a long-term perspective

Advisors can offer anxious clients some perspective by reminding them markets have bounced back from the financial crisis in 2008 and other crises, so any retrenchment isn’t irreversible.

Uncertain times can serve as a reminder to advisors about the importance of proactively educating clients on a regular basis – when markets are down and up – so clients are better prepared for whatever markets do and they can more readily value the importance of diversification and long-term planning. This ongoing education effort can include regular client progress meetings, emails, phone calls, and sharing educational resources.