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6 Ways Financial Advisors Can Calm Clients During Market Volatility


Decades of research in human behavior and psychology show evidence that loss aversion is more powerful than desire for potential gains–nearly twice as powerful. Advisory firms see this tendency play out first-hand, with investors buying at the top of the market and selling at the bottom due to fear. With the recent fluctuations in the stock market and indications of a recession, it is easy to be fearful.

No one likes feeling scared, especially when it comes to money. Amidst today’s market volatility, investors are looking to their financial advisors for guidance. In this blog post, we will discuss six ways financial advisory firms can keep their clients calm and confident during these difficult times. Implementing these tips into your firm’s process will help your clients feel more secure about their financial future, build trust, and maintain a positive relationship!

6 Tips to Brave Market Volatility with Clients

1. Communicate, communicate, communicate.

It is essential for advisors to keep the lines of communication open with their clients at all times, especially during periods of market volatility. Clients should feel like they can come to their advisor with any questions or concerns and feel confident their advisor will respond. By being available and responsive, you and your firm can help diffuse fear.

2. Be proactive.

One of the best ways to avoid panicked calls from your clients is to be proactive in reaching out to them. Don’t let investors call you first! Make sure you and your team regularly update clients on market conditions and their portfolio performance, whether that is making a phone call, scheduling a meeting, or sending an email. This will help them feel like they are in the loop – and that you are on top of things. One of the best ways a wealth management firm can be proactive is by using Riskalyze Check-ins.

3. Expect shifts in market sentiment.

How the markets are performing correlates with how investors feel about the market. Based on the data points Riskalyze has gathered since 2016 through Check-ins, when the markets are down, clients are likely to have decreased market sentiment. When the markets are up, market sentiment is likely to be improved. It is important to understand this relationship so you can help your clients maintain perspective. By understanding this dynamic, you may be better equipped to anticipate your clients’ feelings about the market and help your clients stay calm and confident during periods of volatility.

4. Prove your fiduciary best interest.

Financial advisors must put their clients’ best interests first. This is known as an advisor’s fiduciary duty. Make sure your clients know that you always have their best interests at heart, which will naturally increase client trust and retention. One of the ways that advisory firms can document, check, and prove their fiduciary duty is by leveraging the power of Command Center. Through Command Center, advisory firms can standardize their entire business around the common language of risk.

5. Encourage a long-term growth mindset.

One of the best ways to help your clients stay calm during periods of market volatility is by encouraging a long-term perspective. By understanding that short-term market fluctuations matter less than long-term market trends, your clients are more likely to stay positive and focused on their financial goals – even when the markets are down. You can help your clients see the markets as an opportunity for growth, not something to be afraid of.

6. Provide helpful, timely, and educational information.

Finally, one of the best ways to keep your clients calm and engage prospects during periods of market volatility is to combat sensationalized news headlines with truthful, factual information. You can send out a monthly email newsletter, publish articles on your blog, and share helpful social media posts. By using digital marketing channels, financial advisory firms can disseminate content designed to help clients and prospects understand the markets and financial planning in general. By doing this, you can help your clients feel more informed and empowered – which will go a long way in helping them stay calm during periods of market volatility and build your online brand.

Riskalyze is a powerful growth management platform that helps financial advisory firms retain and attract clients no matter what is happening in the market. Reach out to our team today to learn more.

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