6 Things Never to Say to Clients When the Market Drops

What Our Client Thinks

"Then how do you know it is a good time to buy? Are you saying that there is no exit strategy? Are you saying that I should be 100% invested 100% of the time? What are you saying?"

5. What We Say

"Most analysts are predicting…"

What Our Client Thinks

"How often have they been right? Did they predict the last recession? How many respected analysts disagree with your analysts? Do they have to look me in the eye if they get it wrong?"

6. What We Say

"I understand how you feel."

What Our Client Thinks

"I doubt it!"

What We Should Say

"It is never enjoyable to have a meeting to discuss the losses you are currently seeing in your portfolio. I have, however, prepared a detailed analysis of each holding that lost money. Some are good companies that we should keep, and I will show you why. Others have turned out to have problems that are unlikely to be fixed in time for them to be useful to us. We will probably want to get rid of those. I do not know what you are feeling in the pit of your stomach right now, but I do know what your objectives for this account are, and we are still on track (or, we can get back on track). If this downturn is causing you to re-think your objectives, then we need to have that discussion today."

What Our Client Thinks

"Well, I am not happy, but my advisor at least seems to understand what is going on with me and with my investments. At least they seem in touch with reality and are not trying to sugar-coat anything. I will at least listen to the advice and see if it makes sense to me."

We must stop saying meaningless (and often erroneous) things. If our clients ever think we are trying to deflect responsibility for our recommendations, we lose.

And so do they.

Stephen Dybwad is a retirement planner based in Nineveh, Indiana. He's also the host of the Steve Dybwad Safe Money Radio Show.

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