Q: How did your clients react to the downturn?
A: There was a tremendous amount of fear. And today there's still that residual hangover effect, which is really closer to skittishness. Clients are saying, “I can't handle another 40% drop in the market,” or “Boy, that was not fun. I don't want to go through that again.” But what's different is that clients' anxiety about the market is lasting longer than it ever has before. I right away knew when Lehman Brothers [Holdings Inc.] went down, how bad it was going to be. We immediately wrote a paper and explained what had happened to alleviate clients' fears. We have always understood the need for client education and focused on communication to our clients at that time. Prior lessons helped us get through the financial crisis. We decided to have a big client meeting to focus on the crisis. A week or two after Lehman Brothers, we brought in Ray Perryman, who is a well-known economist in Texas, to talk to our clients. And 250 people showed up on a Tuesday night. That's a lot of people. Perryman explained what had happened, then people asked him about other scenarios, such as if the car companies go down or life insurance companies go down. He said, "Yes, that could happen, but the Fed[eral Reserve] is taking all these actions and will keep doing things until it comes up with a plan that works.'
Bill E. Carter
Carter Financial Management
— as told to Bruce Kelly