The countdown is on. With less than a month to go until Americans cast their vote, and while polls show Harris and Trump nearly tied, clients of advisors are facing several worries.
“They're overwhelmed, they're confused and anxious, and all of those make it more challenging for the advisor to communicate, connect and really help instill a sense of calm,” says Ryan Sullivan, vice president and managing director of Applied Insights at Hartford Funds.
It’s clear advisors have a part to play in the lead up to the election. That’s why Sullivan emphasizes the importance of his empathy, perspective, insights, and choices (EPIC) framework to reassure clients about their financial and political woes.
Empathy: Advisors should start by acknowledging their clients' emotions and acting as a "shock absorber" for their concerns. As Sullivan says, "It's important to have that empathy, not just with the client, but with themselves as well.”
Perspective: Providing historical context on how markets have performed during past election cycles can help clients understand that political uncertainty is not unprecedented. Advisors should leverage data and analysis to demonstrate the long-term resilience of the markets.
Insights: By revisiting clients' financial plans, advisors can reassure them that their long-term goals are still achievable, regardless of short-term market fluctuations. “Ultimately, what clients want to know is, am I going to be okay? How does this affect me and people I care about?” If advisors have already created a financial plan with the respective client, this would be a good opportunity to revisit it, Sullivan says.
“Some of the market volatility we see at times like this doesn't even register in terms of a negative effect on clients’ long term ability to reach their goals.”
Choices: Emphasizing the choices clients still have in their investment strategies and financial planning can prevent them from feeling powerless, Sullivan notes.. "The more clients feel like they have a choice, and that they're still in the driver's seat of their financial future, the less chance they hit that panic button," he says.
Advisors should also be mindful of their own political biases and avoid the temptation to bond with clients by discussing their personal leanings. "If advisors have a strong political leaning, as many people do, that can be a trap where they try to bond with a client by talking about 'those people'," Sullivan cautions.
Instead, advisors should focus on helping clients move through the five stages of grief: denial, anger, bargaining, depression, and acceptance when it comes to elections and other trying times.
“If advisors are just interacting with clients and fueling the fire with anger, they're staying at step two of a five step process. Ultimately, they want to get them to that acceptance. They can do that by not trying to predict what will happen,” he asserted.
Effective communication is crucial in maintaining client relationships during these turbulent times. Advisors should pay attention to their visual, verbal, and vocal cues, ensuring they project confidence and conviction. Using "flagging phrases" like "Here's how this impacts you" can help capture clients' attention, which Sullivan says, studies show clients' minds wander after just 16 seconds.
Incorporating visuals and storytelling, such as charts and graphs, can also enhance client engagement and retention. Additionally, he recommends a simple "What? So What? Now What" self-reflection process for advisors to organize their narratives and ensure they're covering the “what”, the facts, figures and details.
“The So What should revolve around how does it help the client move closer to a goal or avoid a negative consequence for them or someone they care about? And the Now What; what's that next small, meaningful step that'll help move things forward?”
When the election results unfold, advisors will need to be prepared to address client concerns, regardless of the outcome. Sullivan advises that the key is to help clients focus on their long-term goals and not let emotions drive short-term financial decisions.
After all, a recent report from Empower found one in two Americans believe the outcome of the 2024 Presidential election will directly impact their own personal finances, with 24 percent who believe the winner of the election helps determine "whether I'm rich or not" – a belief more firmly held by the Middle Class.
“Clients are never truly powerless. They can always make things worse,” says Sullivan. “How? By making short-term decisions with their long-term investments. Part of that is just by helping them stay on track and keep them informed enough to feel comfortable.”
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