This article was originally published on ETFTrends.com.
By Bryce Sanders via Iris.xyz
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Clients pay for advice. When something goes wrong, most people also want someone to blame. After all, don’t most James Bond movies have a supervillain responsible for the mayhem? When the stock market declines, some clients take it out on their financial advisor. How do you explain market declines aren’t your fault? Can you get them refocused on the long term?
Excuses Clients Hear
If you’ve been around for a while you’ve heard people say:
- The market took us all by surprise
- It’s a Black Swan event (1)
- It’s a 100 year flood event.
When clients have their money involved, they don’t want to hear about surprises or once in a lifetime events. It might sound logical to remind them since you aren’t the Fed Chairman or the President, but that comes across as an excuse too.
Getting Them Back on Track
Losing money is serious, especially to your clients. It took them a long time to accumulate the funds they entrusted to you. This must always be respected. Let’s assume you would like your client to stay on course and not panic. Here are a few approaches to consider.
1. We are all in this together. You are an investor too. You have money committed to the stock market. You are sitting tight for the following reasons (list a few). You advise them to do the same.
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