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Helping Advisors Talk Clients Down Off The Ledge

After an absolutely dizzying few weeks on Wall Street—which have included a chain of bank failures and near failures, several uncertain rescue attempts and the largest one-day point drop in the Dow Jones Industrial Average ever—financial advisors and investors are exhausted.

After an absolutely dizzying few weeks on Wall Street—which have included a chain of bank failures and near failures, several uncertain rescue attempts and the largest one-day point drop in the Dow Jones Industrial Average ever—financial advisors and investors are exhausted. The markets continue their erratic decline, despite passage of the $700-billion bailout package last week and a coordinated global interest rate cut Wednesday.

In the meantime, emotions are running high, and your reps have been struggling to keep themselves—and their clients—sane. We asked several financial experts how you, as a branch manager, can help them alleviate some of this anxiety and get back to business. In other words: What should they be telling clients at a time like this? Here is what they said:


“I think Suzy Orman has it right,” says Chip Roame, managing principal of Calif.-based Tiburon Strategic Advisors, a leading industry research and consulting firm. “If you have more than 10 years until retirement, you should recheck your asset allocation but, by and large, you should stay the course.”

His advice is echoed by Richard E. Ottoo, an associate professor of Economics at Pace University: “Right now, even the greatest financial experts don’t really understand securities values. It doesn’t make sense to make any drastic moves.”

On the other hand, if a client is less than a decade from retirement, he probably should not have money in risky investments, so, “You might need to dial back and reassess those retirement plans with him," Roame says. That said, “Baby boomer clients are ultimately going to spend a long time in retirement and will need those equity market returns. And now is a great buying opportunity if you plan to be in for the long haul.”

Clients in or close to retirement must consider “possibly needing higher returns from the equity market due to increasing life spans, and the fact that the market is far more volatile than it used to be,” he says. “They need to carefully watch their asset allocation vis-a-vis their lifetime income needs.”

The bottom line: Roame believes the U.S. economy will right itself in the medium term. Therefore, “Client advice should be based upon their specific circumstances—as always.”


Alden Cass, Ph.D., a clinical psychologist who heads Manhattan-based Catalyst Strategies Group—a coaching group for financial professionals—and author of several books, including Bullish Thinking: The Advisor’s Guide to Surviving and Thriving on Wall Street, says advisors need to avoid doom-and-gloom thinking in the face of market turmoil.

He feels that panic has been much more prevalent among investors than advisors. “I’ve found seasoned reps are, by-and-large, optimistic that the long-term effects of all this will be positive. Call your clients—you may want to start with the most temperamental first,” he says; reassure them that Wall Street and the government are working together to fix the problem. Reiterate that the result will be a “cleaner” system. And stress the ripe opportunity this market presents for long-term investing, Cass advises.

Now is a great time to buy quality stocks at low prices. One caveat: “Some advisors are trying to determine exactly where the bottom is before buying,” he says. “But I don’t think that’s possible. If you invest in solid companies—even if you miss the bottom by a little—you’ll likely do well in the long run.”


Advisors should keep contacting clients, says Stewart Lee, a former branch office manager who heads Lee Training in Wellston, Okla., a consulting and practice management firm that helps develop and run the SIA’s Branch Manager Development Program. Lee says, “Contact prospects. Right now, people are very receptive to second opinions and new ideas. Most are craving a new voice of reason and reassurance, so double up on your marketing and your prospecting activities, and you’ll very likely wind up with some new accounts.”

Now is also the time to reexamine your marketing and business plans so that you have a contingency plan that takes the new Wall Street order—where most of the giant wirehouse firms have been converted into, or bought by, banks—into account.

Also, be sure to take advantage of opportunities in your marketplace, Lee says. For example:

  • Offer to speak to investor groups and other organizations in your community, providing clarity and specifics on the way you and your firm are dealing with the current crisis and the opportunities it offers. “Be sure to reiterate your special differences—what you do well, how you do it.”

  • Offer to write articles for local newspapers and to be quoted on local news and radio shows.

  • Create a special edition of your newsletter with information on these current market conditions and the bailout.
  • Send e-mails to clients and prospects. “Keep them short and sweet—but make them reassuring. Sort out facts from fiction—particularly fictions advanced by the media.”

And finally, Lee says, “Encourage your advisors to think about reps at competing firms who would be great additions to your office—reps they’d be willing to partner with, learn from, grow with.”

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