In an era when people are questioning whether they need a financial advisor, when automated investing services threaten to undermine the entire advisory business, you and I have stress-test moments to prove ourselves – and our value – to our clients. How did we do? More specifically, how did you do?
If you've ever spoken with someone who has had a near-death experience, you hear about them having their life flash before their eyes. In an instant, all that once was and all that might be flood into their mind in a way that galvanizes their approach to living life.
As a result, they come out of the experience with a newfound sense of clarity and purpose. Thanks to the recent volatility in the stock market, investors had that experience for themselves.
Don't you wonder what your clients thought as they heard the news that the market was crashing? Did they feel comforted by the planning you've done with and for them? Did they experience regret taking more risk with their life savings than they're comfortable with? Did they feel that you protected them adequately for this very moment?
Whatever they thought about during those moments determines their perception of your value to them as an advisor.
I'm not suggesting you try to time the market for them or perform a superhuman act during a time of chaos and confusion. No, those actions should have largely been accomplished long ago through proper planning.
When the market drops quickly or when the market rises quickly, your client needs to feel the confidence that comes from having laid the groundwork for this very moment, before it happens. For retirees, that means setting them up with the appropriate amount of guaranteed lifetime income, using properly structured annuities.
When the market drops, their lifestyle is not altered. Conversely, when the market rises, they have appropriate participation in the form of risk-based investments with which to grow their assets.
