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Adding value to client conversations in times of market volatility

March 5, 2020 Steve Zuschin By Steve Zuschin

The current market correction has hit the industry hard. It’s the steepest decline since 2008, and in the wake of a global crisis, the investment horizon has never looked less clear.

As an advisor, you’ve probably received a few calls from investors regarding the recent market performance. Almost every portfolio was/is down over ~12%. Clients want answers, and they are looking for reassurance that you’re doing everything possible to temper losses and increase their returns.

Shift your mindset

If your only conversation topic is performance, it will be difficult to retain clients during bouts of volatility. Modern wealth advisors need to add more value to clients’ lives than just performance. If you don’t, your practice will look one-dimensional and it will be extremely difficult to attract the next generation of wealth.

Have you tried shifting the conversation to one about a comprehensive financial plan? A retirement savings strategy? A risk assessment? And since this is a LifeYield blog, what about controlling investment taxes?

All these inputs can help you improve client outcomes and direct the conversation away from the obvious negative (performance), and towards something more positive. Something that you can control.

Using technology to change the narrative

When you get performance calls during a wave of market uncertainty, how do you answer them? Do you attack it head-on? Do you talk clients through the impact of world news, natural disasters, and other disruptive events? Or do you change the story and talk about something you can control?

This situation is one of the most challenging for advisors to handle. These conversations can feel confrontational and can kill client trust in an instant if you can’t temper their concerns. Advisors not equipped with the right technology that provides structure and insights beyond performance are getting left behind. During bull markets and market surges, clients are happy. But when it hits the fan, maintaining client trust and controlling the narrative are key to getting through the turbulence.

Luckily, there are technology platforms that let you shift the conversation away from performance. These platforms help advisors focus on the value they’re adding to the overall client portfolio. They address comprehensive planning, risk, retirement and other creative ways to increase after-tax returns.

Historical performance data can only go so far in these situations. Even if clients know it, they don’t want to hear “stay invested”. They want to know what you’re doing to help them. Advisors’ ability to have quality conversations in the wake of market volatility is directly attributable to the technology they can leverage as a guide.

How LifeYield can help

The LifeYield Advantage Suite® was created specifically for financial advisors to help them optimize taxes across a household-level portfolio and quantify the benefit of this strategy to the client.

Guide client meetings using the Taxficient Score®, which benchmarks the overall tax-efficiency of a portfolio on a scale of 0-100. Advisors can use this score to show clients how they’ve improved their tax-efficiency over time, and the impact that an asset location strategy has had on after-tax returns.

This structure can help you steer awkward performance-related conversations toward something more productive; improvements in overall tax-efficiency. When you focus on variables you can control, you start to control your destiny – and the client’s.

Steve is the EVP of Advisor Success at LifeYield. He's responsible for leading our Direct-to-Advisor channel and always keeps up on the latest advisor technology. Steve writes about how advisors can grow their business by building stronger relationships with clients and adopting new technology.