We considered writing about something REALLY scary. You know…ghouls, ghosts, witches, putting everything in $TSLA…but we decided to talk about the boogeyman. What’s the real monster keeping your clients up at night?
It’s uncertainty.
After eight months of record highs, volatility reared its ugly head again in October. Some investors panic sold, some reached out to their advisors, some worried and did nothing (for now). The one thing all these clients have in common is they don’t know what the future looks like. If you don’t have the right expectations, every bump in the night is scary. Is this a temporary setback or is this the bear market the pundits and “experts” and speculators have been talking about for years? Scary movies thrive on the unknown.
Judging by that metric, investing has to be the scariest movie of all.
Advisors have to be mind readers, behavioral coaches, cheerleaders, ledge talkers, math whizzes, and market gurus. If that sounds like a ton of costume changes, that’s because it is. With markets experiencing some losses recently, being a source of reliable information is even more critical.
There’s a reason bear markets are represented by, well, bears. Big teeth and big claws are the stuff of nightmares. Nobody wants to meet a bear in real life—why would we trust our retirement with one?
Telling a client or prospect to stay the course without giving them the right evidence is an exercise in futility. When a child’s scared of a monster under the bed, we show them there aren’t any monsters under the bed. You have to show your clients there’s nothing under their bed, too.
You have to prove it.
Scenarios
Stress tests are a chapter, but Scenarios tells the whole story. If a client wants you to prove their portfolio is right for them (“Hey, can you show me what’s under the bed?”), this is one of the most efficient ways to visualize performance. With Scenarios, we thought of everything: carrying concentrated positions, custom contexts, stringing together market events, and other data points. Having the ability to see risk in action gives clients even more peace of mind.
Past performance isn’t necessarily an indicator of future performance, you don’t have to be a mystic to know that. But data over a long period of time does seem to show certain patterns, doesn’t it? Is there empirical data to justify your decision-making? Yes.
Stats
So what does all this data mean, and what if your clients still aren’t sure (“I don’t know, I still think there’s a monster”)? That’s when you can bring out your inner math geek, no TI-83 required.
Stats can help you go over modeled performance comparison, sector breakdowns, risk/reward scatter plots, and illustrate data correlation unlike anywhere else. You know the quickest way to get ghouls out of your closet? Turn on the light. That’s what Stats does for advisors: it turns on the light and brings clarity to investment decisions.
Meetings
The behavioral coaching element is one of the most important parts of working with an advisor, and this is never more apparent than during a correction. Talking through decisions together, planning ahead, or even re-assessing risk are important parts of maintaining the relationship.
There are times where nothing can replace a meeting—that’s why we made it easy.
Our Meetings feature lets you have a meeting anywhere with just two clicks. You’ve probably heard “The Tale of the Advisor Who Clicked on the Wrong Client” (oooh, spooky). Riskalyze intelligently censors your other clients’ information so you’re always sharing the right data with the right person. Meetings shares only what you want, and none of what you don’t.
Monster Spray?
Wooden stakes, silver bullets…Advisors need the right tools to get the job done, and the Riskalyze support team is up to any challenge, no matter how scary.
An advisor reached out to us with a few questions about their account. At the end of the conversation, we asked if there was anything else we could help with and were met with an interesting response…
“I need help with multiple issues, all of which I don’t think you can help me out with! Like my 4-year-old refusing to sleep in her bed and keeping me up all night!”
We knew we had to step into action, and the legend of “Monster Spray” was born.
Halloween aside, investing can be a scary place for investors, even for seasoned pros. Nobody wants to lose money, and while volatility is a sign of a healthy market, try telling that to someone worried about their retirement.
You’re in a unique position as an advisor to guide the conversation. The Risk Number® is a great way for advisors to set the right expectations at the beginning, but long-term investing is often made one short-term decision at a time. The real boogeyman is uncertainty—but we’ll make sure you have everything you need to keep empowering fearless investing.
Monster spray included.