Wealth management: under the overcast sky

There are difficult times ahead if you are in the wealth management business. Your clients are losing money as you read this - and there is only so much you can do about it.

  
Image used for illustrative purpose.

Image used for illustrative purpose.

Gettyimages

That does not mean you have no role to play now at all – quite the opposite! Today, we share with you 5 steps on how to react as an investment advisor when the markets are plummeting.

Be prepared to take the hit

Your clients lost money because of the markets, but they will blame you for that. Unfair? Maybe. But it was you who eventually recommended the products, and for some of your clients it is the only thing that matters. There is no point in arguing who is right, when you have more important things to do. Be prepared to accept your position and focus on solving the actual problem. Someone may even thank you for that when this is all over.

Keep your clients informed

Are you happy that some of your customers haven’t reached out to you yet, despite what has happened? You shouldn’t be. They may have other, even more important concerns (like health) or they’ re just waiting for you to step in. One thing is for sure – you have to keep your clients informed, way more frequently that in the times of peace. Only then will they have a mild sense of control over the whole situation. Notify your clients not only about what has happened, but also what is going to happen. Example? Scheduled emergency meetings of central banks, which may shift investors’ sentiment.

Get closer to your clients

Get closer to them than ever before. Step up and prepare some extra reports and statements which will make them aware of what exactly has happened to their portfolios. Instead of meeting them face to face every quarter try to meet every week or two. And if face-to-face is impossible these days, use video, so you could see each other while discussing important matters. Also, ask them if they need some extra help with anything else. When the markets are facing the next financial crisis, a day feels like a week, so there is a little chance you will be too much for some. Actually, your relationship may strengthen from that situation. “A friend in need is a friend indeed”, right?

Don’t be afraid to say NO

Your clients have started working with you probably because you are an expert in the field, and they are not. Remind them why you insisted on diversification and why it paid out now since it could have been worse. The difference between an expert and an amateur in finance reveals itself in situations like the one we have today. Frequently, clients want to make hasty decisions – close their positions and withdraw the money. Or just the opposite – to increase the risk and catch a falling knife. Whatever it is, it is your role to point out the consequences, be confident with your stand and strongly convey why they should revise their initial thoughts. Remember - you are the last touchpoint between your client and a trade.

Be consistent

It’s hard to stand still when the world is spinning, but it may be a key to stay professional. Your strategy for the crisis shouldn’t change five times a week, because it will confuse your clients. A well-thought view on the market is an absolute necessity for your message to be consistent. Take some time or ask for advice if you feel like it to set up your thoughts straight. Stick to your assessment, but only for so long that it is true and doesn’t harm your clients’ money. Only then will your clients believe your judgment and follow your advice.

It is always darkest before the dawn, and after the coronavirus crisis, the markets will go up again – that is for sure. As a professional wealth manager, you stand by your client in financial sickness and health. Just like after every crisis, there will be winners and losers. You can become a winner in your field, strengthening client-advisor relations and make them remember that having a great wealth manager is always invaluable.

Learn more about Comarch Wealth Management 

Dominik Łyżwa 

Business Consultant at Comarch

Dominik Łyżwa is a Business Consultant at Comarch, covering Wealth & Asset Management platforms. His professional career focuses on finance & capital markets, with relevant experience on both buy and sell side. Dominik is a licensed stockbroker and investment advisor.

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