Your CRM is a powerful tool that can help you send out a blast email to all of your clients at the touch of a button.
The stock market is down – way down. That means that clients are nervous and you need to move into crisis mode. How can technology help? Here are the top three actions you should be taking:
Use your CRM system to communicate to clients. Certainly you've told your clients time and time again to stay the course, think of the long term and don't panic during downturns. Unfortunately, when there is a big drop in the market, clients still get nervous. Their logical brain tells them all the right things, but their emotional brain is scared. A timely email from you can calm them down. Just knowing that you are aware of the anxiety-inducing things happening in the markets, but that you're not worried and that you care can make a world of difference to your clients.
Let me share an analogy and a story. First the analogy: We all know nervous flyers. They obviously don't really think the plane is going to crash or they wouldn't have gotten on the plane to begin with. However, when turbulence hits, they are scared. Often, just a glance at the flight attendants to see that they are not worried is enough to calm down the nervous passenger.
The story: I once got a new client solely because, during the last downturn, their adviser never reached out at all. So the moral of the story is: Reach out to your clients. Your CRM can help you send out a blast email to all of your clients at the touch of a button.
Use your rebalancing software – or your portfolio-accounting software – to identify and carry out tax-loss-harvesting opportunities. You know what they say about when life hands you lemons … Don't wait until the end of the year to take advantage of tax-loss harvesting. The robo-advisers claim to do this automatically. Even if your process is not automatic, it is important to identify material opportunities and take the losses. Be sure to replace the position immediately with something similar but not “substantially similar” to keep your clients fully invested. Any losses you take today can be used to offset gains in the future. And – be sure to tell your clients about what you are doing. Again, just knowing that you're on top of things and looking out for their best interests goes a long way.
Use your rebalancing software – or your portfolio-accounting software – to identify and carry out rebalancing transactions. A drop in the stock market will typically result in an overweight to bonds. All significantly out-of-balance portfolios should be rebalanced. As an advisor, you know how important it is to maintain each client's investment strategy. For your clients, remind them that rebalancing means taking advantage of bargains created by the market.
When downturns happen, advisers truly earn their fees. Be sure to take appropriate action and communicate with your clients. There's no time like the present.
Sheryl Rowling is chief executive of Total Rebalance Expert and principal at Rowling & Associates. She considers herself a non-techie user of technology.
