Advisors Sound Off On The Global Sell-Off; Lessons For Next Time?

Friday, August 05, 2011 06:16
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Advisors Sound Off On The Global Sell-Off; Lessons For Next Time?

Tags: client communications | client education

A lot of advisors out there were swamped with calls yesterday, but some managed to reach out on their own to both clients and the media. When they did, they hit a lot of common themes.

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First, they're reminding the world that they're on top of the situation.

 

They might not know exactly what's driving every trade, but they can talk articulately about the debt ceiling, the prospect of a U.S. credit downgrade, and the problems going on in Europe.

 

Second, they're reinforcing the value of long-term planning. If they find knee-jerk shifts in allocation alarming -- selling everything to crowd back into bonds, for example -- they'll say so.

 

Some of the discussions might get a little too technical for a 30-second sound bite. Talking about growth versus value or large- versus small-cap strategies is probably going to go over their heads.

 

Remember, you're not applying for a job as a market strategist. You're feeding client loyalty.

 

Your clients might be intrigued with your tactical shifts, but at the end of the day, they really just want to know that they're in good long-term hands. 

 

One firm did this beautifully. They sent out a special email newsletter -- their second this week -- laying out the main points.

 

No talk of chasing dividends or buying the dip or even "staying the course." Not one mention of the pain in the markets being "an opportunity."

 

They presented the problem of S&P 500 dividends being higher than Treasury yields now, suggested a liquidity cushion is a great thing in unsettled markets, and that was that. 

Comments (1)

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stephenw585
Scott,

Excellent points, and very timely! I wrote a similar post today, on what advisors can do to strengthen relationships in times like these. I will link back to this post as well.

http://bit.ly/pyLRXX
stephenw585 , August 05, 2011

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