Every advisor gets just a few great career-building opportunities when they can really establish themselves as experts, build long-term credibility, and differentiate themselves from the competition – most of whom are hiding from their clients because they don’t know how to guide them through the bear market.
What do the real experts do when their clients are calling them to redeem their funds?
Well, they communicate, they reassure, and they give their clients a sense of market history and direct their attention to the big picture.
We have been here before
Like Coronavirus, outbreak of SARS had its impact on global as well as Indian stock markets. Sensex fell by 10 percent in three months. But, one year from then, it generated an absolute return of more than 77 percent. This means if one would have invested Rs 1 lakh in the index early in January 2003, when fears of SARS hovered over the markets, within a year, the same investment would have grown to become Rs 1,77,000.
Markets reacted in a similar way to Ebola, Zika, and AVIN, i.e. correcting sharply and then bouncing back aggressively. This one isn’t going to be any different. This isnt ever the first bear market due to a pandemic . We have had several of them before, and they all ended up with markets going into positive territory a year later.
Understanding beats emotion
Remember the age old saying ‘Buy when low, Sell when high’. Its easy saying than doing, clients are driven by emotions, and your job as an advisor is to help counter that emotion by showing your clients the big picture, and bring everything back into perspective. The famous saying of Winston Churchill ‘Never let a good crisis go waste’.
Fear is a mind-killer
As long as your clients don’t need to sell assets to raise income to live on, market volatility works for them and not against them. As long as your clients have the willpower to stick to their long-term goals and invest into assets for their retirement everything will turn out well for them. Fear is the killer which destroys the idea of future plans and only the bigger perspective will help your clients to come out of it.
So advisors, don’t shy away from your clients, answer the call and communicate, cause now is the time to keep rolling. Meet or call your clients with a simple message of – Don’t fear, think for long-term, diversify or re-balance the portfolio.