Three simple ways to make volatility your ally

Joe Duran offers three simple ways to make volatility your ally by preparing clients now for the next big market drop. They'll thank you later.
NOV 19, 2013
By  Joe Duran
None of us like market turbulence. Our clients deplore it and our employees can be frustrated with calls about it. But just like everything else in this world, there may be a positive in the midst of the negativity. Truth is, most of our clients think we earn our money when we are making them money, but those of us who have been around through multiple volatile markets know that we really earn our money when times are tough. Winston Churchill had a wonderful expression: “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.” Here are three ways to help turn the next big decline in the markets into an opportunity. 1. Prepare for the inevitable. Believe it or not, we have been through a period of relative calm since 2009. In fact, volatility has been historically low, and we can all be lulled into complacency. Prepare your clients in advance for a possible decline in stocks. Doing so when things are good allows you to refer back to your warnings and highlight your preparations. Most of your clients want you to be their guide and point out the blind spots they might not see or be prepared for. 2. Control the controllable. Remind your clients that neither of you can control the markets. You are there to help them control their reaction to the markets. That can justify not just your fees, but the real value you add to them and their families. Too often, advisers act as though they are responsible for market behavior that they have no control over. It's a great time to remind clients what you can do and what you can't do. 3. Communicate. Communicate. Communicate. You can never overcommunicate with clients, especially in tough times. In fact, that's when they want to hear from you the most. You should be calling, writing and sharing thoughts on social media. The truth is that the phone gets very heavy when markets are rough. Most of our clients have other advisers. In fact, the average client has 2.6 advisers. You can bet, more often than not, the other 1.6 advisers are not on the phone. So, taking this opportunity to reach out will cement in your clients' minds that you are there for them in the good times and the bad. What you want your clients to remember is that you were there when things were tough (and had them prepared in advance). “Life is not about waiting for the storm to pass, it is about learning to dance in the rain.” Every opportunity to grow comes from a place of adversity. Don't let the next possible big decline be wasted. Prepare now while the sun is out! Joe Duran is chief executive of United Capital Financial Advisers. Follow him @DuranMoney

Latest News

SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees
SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees

Eliseo Prisno, a former Merrill advisor, allegedly collected unapproved fees from Filipino clients by secretly accessing their accounts at two separate brokerages.

Apella Wealth comes to Washington with Independence Wealth Advisors
Apella Wealth comes to Washington with Independence Wealth Advisors

The Harford, Connecticut-based RIA is expanding into a new market in the mid-Atlantic region while crossing another billion-dollar milestone.

Citi's Sieg sees rich clients pivoting from US to UK
Citi's Sieg sees rich clients pivoting from US to UK

The Wall Street giant's global wealth head says affluent clients are shifting away from America amid growing fallout from President Donald Trump's hardline politics.

US employment report reactions: Overall better than expected, but concerns with underlying data
US employment report reactions: Overall better than expected, but concerns with underlying data

Chief economists, advisors, and chief investment officers share their reactions to the June US employment report.

Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading
Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading

"This shouldn’t be hard to ban, but neither party will do it. So offensive to the people they serve," RIA titan Peter Mallouk said in a post that referenced Nancy Pelosi's reported stock gains.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.