In today's turbulent times we all want something we can really count on. Well, since we can always count on our fingers, let's assign each one with a critically important idea about today's market and a specific activity designed to yield success. With Five Things to Know and Five Things to Do readily at hand, you can focus your efforts, shepherd your time and proactively embrace the necessity of being successful on purpose.
The First Thing
The first thing to know about today's market is that things aren't the same as they've always been, and therefore your clients have never needed you more. Given all that they've been through in recent years — a highly volatile stock market, an extremely uncertain economic environment, rising health care costs and severely damaged retirement savings — it's not surprising that your clients' emotional and psychological condition is tenuous — and with good reason.
While it's true (I believe) that the markets will eventually fully recover, that doesn't mean it's not "different this time." Unlike in previous market setbacks, those most affected by the recent downturn — the baby boomers, now in their fifties and sixties — simply don't have the time to wait for the markets to fully recover and their earning power to return to "normal." Demographically speaking, given the time value of money and the hit to their retirement funds, for the baby boomers, recent market turbulence is a major disturbance, not simply a blip on the horizon. Therefore, it is different this time.
Many of your clients know that things are not the same and that they are in trouble, and to tell them otherwise — to pretend that everything is OK or is going to be OK one day soon — is to do them a disservice and unfairly punish them. Plus, if you're spouting the "it's all good" refrain, not only are you mentally and emotionally distancing yourself from your clients, but most of them will see through your posturing.
Instead, accept the fact that many clients have badly damaged financial lives, and that the best thing to do is to begin with the unvarnished truth. Once you're fully straight with your clients, you can much more easily and effectively be there for them, and they'll see how much they really need you now. If all or most of your clients fit into the ultra-affluent category, and perhaps have seen only modest changes in their lifestyles or economic outlooks, this advice might not apply. But if your clients are mainly among the upper middle class, those who aspire to the status of "middle-class millionaire," then it's time to get real with them and move forward with things as they really are.
Four More Things
The second thing to know is that client loyalty has never been more fragile than it is right now. Recent research by Russ Alan Prince shows that 81 percent of affluent investors with national firms are looking to move their accounts elsewhere. In the 32 years I've been in this business, one question I've been asked over and over again is "Who is our biggest competition?" My answer has consistently been, "Our only competition is the loss of investor confidence," and right now that competition is gaining.
Third, with tumultuous markets and so many people upset over their losses and losing confidence, you have a great opportunity — right now — to win over ideal clients. Never forget that more Americans need quality financial advice than there are quality financial advisors available. This leads us directly to the fourth thing to know, which is that to capitalize on this opportunity, you must deliver what affluent clients need and are looking for today. To do this, you have to understand what they need and want, as well as what motivates them to look for an advisor or to change advisors. Once again, it's not "business as usual," which means that it's also not sufficient to offer an outmoded value proposition, even one from 2007 or 2008.
The fifth and final thing to know right now is pretty obvious: you must act quickly. That brings us to Five Things To Do.
