News of coronavirus cases hitting the U.S. sent financial markets into a tailspin, with U.S. stocks recording their worst week since October 2008. Naturally, many clients reacted with anxiety and fear. Many had concerned conversations with their planners. One of the best ways to learn new strategies for allaying client fears during volatility and uncertainty is to ask your peers.
In response to its members’ needs, FPA has created a new virtual community on FPA Connect for planners to share language and strategies for calming clients in the wake of coronavirus anxiety. This FPA Connect group held three live webinars in early March, during which the following tips were shared amongst planners (visit Connect.OneFPA.org to access this and other discussion groups):
Longtime planner and professional leader Dave Yeske, DBA, CFP®, said that during times of uncertainty, he starts conversations with anxious clients with the idea that whatever happens, human beings are enduring.
Yeske also provides perspective, demystifying the concepts of “the economy” and “the markets.”
“I always explain to clients that the economy is not some big machine that gets expressed in statistics, like gross domestic product, and consumer price index, and GDP deflator,” Yeske said. “[The economy] is just you and me, and everyone you know, and everyone you don’t know going about the business of earning, saving, spending and investing. Those individual decisions aggregate up to this thing we call the economy. And that’s why economies are resilient. And that’s why markets are resilient—because human beings are resilient. And that’s a fundamental regularity that’s not going to change.”
Offer weekly recaps.
Stacy Francis, CFP®, CDFA®, CES™, said it’s important for planners to find that balance between keeping clients informed on what’s going on, yet not creating anxiety. Her firm, Francis Financial, surveyed clients during the recent market turbulence and asked: how often do you want to hear from us? The No. 1 answer was one a week.
“What they want is a weekly recap that helps them cut through the hype,” Francis said. “We need to help them see what’s really important, and what they don’t need to pay attention to.”
Francis also passed along advice from Michael Kitces and Carl Richards, who suggested adding non-financial tidbits to your weekly recaps, such as upcoming community events or spring break travel tips—content that shows you’re paying attention to more than just the markets.
Be understandable and relevant.
Francis also suggested reminding clients that what the markets are doing is different than what their portfolios are doing.
Tell clients: “Your bonds are doing phenomenally well, and they’re doing exactly what we wanted them to do, so that when stocks are falling, your bonds are going up and really saving the day,” Francis said. “Let them know that the myth of, what happens in the market is happening to me, is just not true; show them that it’s not true.”
Experience more peer-to-peer learning like this through FPA Connect at Connect.OneFPA.org.
Carly Schulaka is editor of the Journal of Financial Planning. Reach her at [email protected]