When the going gets tough, the tough get EPIC

Amid volatile markets, it's important that financial professionals provide clients with Empathy, Perspective, Insights and Choices.

To say it’s been a volatile few years in the investment markets is an understatement — and some think the worst is yet to come. Whether you believe the U.S. economy will undergo a protracted recession or not, it’s probable your current and prospective clients are concerned about a downturn. In such challenging times, it’s important that you’re offering client communication that’s EPIC. That is, financial professionals need to ensure they’re providing clients with Empathy, Perspective, Insights and Choices.

Here are some related tips and techniques to consider.

EMPATHY

Everyone knows that empathy is important, yet there’s an important distinction between common knowledge and common practice. Given financial professionals’ experience and expertise, it may be tempting to say things like, “You have nothing to worry about.” But clients may find that dismissive of their concerns. Instead, consider thanking your client for sharing their feelings and fears. The more they feel heard, the more likely they are to trust that you understand them and are looking out for their best interests.

Remember: While you’re doling out empathy, make sure to save some for yourself and those you care about. You’ve been under as much — or more — strain as your clients over these last three years, so maintaining both a sense of balance and a healthy self-care routine is key.

PERSPECTIVE

Providing historical perspective about past recessions can help show they’re generally short-lived and often followed by periods of sustained economic growth. When done well, this type of education can help emotionally insulate clients, so they aren’t as apt to make panicked decisions. In past downturns, some top financial professionals have been able to help even more people while selectively growing their practice. How? Holding educational events where clients can invite their family, friends and colleagues who also have concerns. Or consider sharing short, compliance-approved videos or educational materials with clients and encouraging them to forward the content to those they care about.

Remember: In times of increased stress, clients don’t listen or process information as well as usual. Keep charts simple and information brief, repeating key points to increase understanding and retention.

INSIGHTS

Sharing macro-level economic updates is helpful, yet most clients want to know one thing: “How does this all affect me?” If you’ve created a financial plan with the client, this is a great time to revisit that plan. Have the client’s goals changed, including when they plan to retire? Some financial planning software programs also allow the client’s plan to be “stress tested” to see the impact of market losses or higher inflation on the client’s ability to reach their financial goals. Finding out their plan results may only be minimally impacted by a downturn can help alleviate much of a client’s apprehension. If you haven’t created a plan with a client yet, it’s an excellent time — and reason — to do so.

Remember: It’s not just what you say, it’s how you say it. Be aware of the vocal, verbal and visual cues (e.g., body language and facial expressions) that you’re sending clients as you discuss the economy, to ensure your long-term confidence and conviction about the financial markets shines through.

CHOICES

Help clients understand that they have the power to make more informed decisions. For example, instead of telling a client they need to delay retirement, help the client see the options they have available to them — downsizing, budgeting more stringently, borrowing, selling personal assets, and the ramifications of each. The more the client feels they have made their own informed decision, the more they may feel empowered and able to stick with that option.

Remember: In a downturn, you can help clients increase their number of potential options. Consider encouraging clients to keep learning new job skills, so they can be more viable in their current role, more hirable in the same profession, and more prepared to switch careers or start their own business in case of a layoff. If it’s true for most working clients that their ability to earn an income is their most valuable “asset,” helping them to improve that ability can also help the client’s overall financial well-being.

Next time you’re planning a conversation with a client about a potential recession, consider making that discussion EPIC. Lead with empathy, provide them perspective to see the big picture, share insights so they understand how they may be affected personally, then help them understand what choices they have available. Whether the economy shrinks or not, you may find that clients’ trust in you — and their willingness to refer you to others — still grows.

Ryan Sullivan is vice president and managing director of applied insights at Hartford Funds.