Practice Management

Guess how many advisers are talking to clients <i>now</i>

Thursday's stock market whipsaw sent many financial advisers into client management mode — fielding calls and sending out e-mails as the Dow Jones Industrial Average briefly tested a record 1,000-point drop.

Thursday’s stock market whipsaw sent many financial advisers into client management mode — fielding calls and sending out e-mails as the Dow Jones Industrial Average briefly tested a record 1,000-point drop.
About half of 1,148 advisers polled by InvestmentNews today said that they heard from concerned clients in the wake of yesterday’s all-out panic in the markets.
And 60% of advisers said that they reached out to clients to offer reassurance.
“Given the market reaction with these huge swings, we’re confident that making some pre-emptive moves was appropriate,” said Leo Marzen, who oversees $850 million as principal at Bridgewater Advisors Inc.
He said that he received a few calls from clients Thursday while he was preparing a communication to explain steps he was taking to protect his clients’ portfolios. One move was to reduce exposure to European equities in the wake of Greece’s debt troubles. (Are you taking any new tactical approaches? Share your views, and read what others have to say here.)
Advisers who didn’t immediately reach out to clients said they were waiting for the dust to settle and for the cause of Thursday’s market drop to become clear. (Multiple reports about trading errors have surfaced, but little clarity has been offered on the true source of Thursday’s sudden dip.)
“It was clearly frightening but nothing to get too excited about,” said James Olsen, owner of Crown Capital Securities LLC, which has $70 million under advisement.
“I haven’t reached out to my clients yet because I’m waiting for some perspective on what happened,” added Mr. Olsen, who said he received a call from one of his 150 clients regarding the market’s recent activity.
Mark Muto, a financial adviser with Cowden Associates Inc., a $200 million advisory firm, said that he talked with clients after Thursday’s turmoil and the subject of the markets volatility “didn’t even come up.”
“I’m not too surprised that I haven’t heard from any of my clients because I think a lot of investors are getting used to getting bludgeoned in the markets,” he said. “Until it’s clear in my mind what actually happened, I won’t reach out to clients to discuss it.”
Others have taken a different tack. “I was proactive in sending out an e-mail to clients yesterday and then another one today,” said Rick Jurrens, president of F.I.G. Financial Advisory Services Inc., a firm with $60 million under advisement.
Mr. Jurrens, who received calls and e-mails from three of his 230 clients regarding the stock market volatility on Thursday, was in the majority of advisers surveyed InvestmentNews.
Did you reach out to clients? Did clients contact you? What did you tell them, if anything? Use the discussion feature below and tell us your story.