Will We Lose Our Clients? Hot

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Our clients look to us for financial advice. We provide them with financial planning; we stay up on current tax laws; we advise on college funding; we assist with retirement cash flow decisions and more. In short, we are our clients’ trusted advisors. Does that trust disappear in a down market?

How do we answer the question, “Why didn’t you move us to cash before the market dropped?” Of course, we say that the market can’t be predicted. We point out the benefits of diversification. We remind them of the cyclical nature of the market. Yet, they are disappointed – especially when their friend Barry’s stockbroker moved him to cash at just the right time.

Our best ammunition is cementing our relationships with clients. This means providing them with ongoing “proof” of our value that goes beyond portfolio performance. Here are some suggestions:

  • Present clients with periodic reports – possibly along with quarterly reports – showing progress toward goals.
  • Annually summarize services provided to each client, reminding them of all you do for them, such as Roth conversion analyses, mortgage refinancing advice, year-end tax planning, etc.
  • Communicate often! Just as you need to remind clients that down markets don’t last forever, warn them that the market doesn’t go up continuously.

When the fated downturn occurs, be sure to rebalance – and let your clients know that you are taking advantage of bargains on their behalf. Harvest tax losses. Accumulate, quantify and publicize the tax benefits you are generating.  In other words, make lemonade out of lemons and toot your horn!

Do you do this with your clients? If not, you risk losing them in the next downturn.  

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