When the markets go wild, clients may not know that they need to ride out the volatility, but technology vendors are looking to prevent any bad financial decisions with behavioral coaching via new online tools.
Riskalyze announced on Wednesday it was releasing a program for advisers to check in on clients with monthly emails between in-person meetings. The tool will be rolled out in May, and is free to existing clients.
“All advisers we work with care deeply that clients make the right short term decision to protect their long term goals,” Riskalyze CEO Aaron Klein said during an interview at the Technology Tools for Today conference in Fort Lauderdale, Fla. “This is a tool to help advisers keep clients out of the valley of doom.”
The markets have been especially
volatile since 2016 began. Riskalyze's Check-In tool will ask clients every month in an email two simple questions: “How are you feeling about the markets?” and “How are you feeling about your financial future?”
After answering the two questions with a tap of a button, clients will be shown a pre-determined message from the adviser explaining what is normal for their portfolios, as well as analytics of their investments and the markets. At the same time, advisers will get a notification about how the client is feeling.
Other technology platforms ask clients to think twice about withdrawing their assets because of market volatility. Betterment, for example, is completely online, and tracks how many times a client has logged in and sends a message with educational posts as to why they shouldn't be afraid of the markets.
“A tech platform's usefulness in keeping clients on their best behavior between meetings will have everything to do with how the communication is framed,” said Daniel Crosby, founder of advisory firm Nocturne Capital. “Any sort of communication has the potential to 'prime' clients either to focus on their long-term goals or to take an inappropriately narrow view.”
Communication, Mr. Crosby said, keeps client goals top of mind when they get scared about the market.
According to an InvestmentNews/Kiplinger's Financial Advice and Investing Survey from January, 8.7% of clients said communication skills were one of the most important when selecting an adviser. But when asked which characteristics were most important, 16.7% said responsiveness and 5.1% said listening skills.
He did note that too much conversation on the negative of markets can cause more worries or lead clients astray in their portfolio management.
“Such check-ins would need to walk a delicate line between eliciting honest dialogue and actually planting the seeds of further worry,” he said.
