As a financial adviser, you likely can reflect back to late August 2008 and recall the angst that a falling stock market brought about every day.
Whether we were watching reruns of previously presented financial-guru interpretations or getting up early to see what the financial news programs were suggesting that the futures markets would do, we were all mesmerized by the pace of our collective financial and economic deterioration.
To say the least, the market meltdown wrought havoc on the emotional well-being of our financial advisory colleagues and, appropriately, their clients. Fortunately, the recovery that began in the spring has brought a modest amount of calm to us all.
However, we suggest that as chief executive of your practice, you should prepare for what might be around the corner: a market correction.
It won't be wasted time, because if a correction does occur soon, the plan can sit at the ready in case the correction comes along later.
Here are our suggestions as to how to help manage your practice:
• Take the position that a 10% to 15% correction will occur over the next 90 days. That means planning today for a phone crusade to the top 50% of your client base, explaining our tried and tested script: Stay calm and think long term. Next, start sending out approved e-mails to every client for whom you have an e-mail address and send an approved letter to the rest. Be sure to ask for referrals, as many advisers won't be as proactive as you are.
• Meet with staff members and debrief with them weekly as this trend unfolds so that they see your calm sense of purpose. Assure them again that this is just a temporary event and that the market will recover. They know it instinctively, but it needs to be reiterated by their leader. To keep clients calm and thoughtful, enlist them in the planning process as to how the practice should act. Be sure to prompt them to ask for referrals.
• Consider a series of Saturday morning conference calls or small-group breakfast meetings with your top clients. After you offer the calm they will be looking for, ask for a referral.
• Consider introducing a “menu of services” to clients when you meet with them. It could include items such as lunch or dinner at their favorite restaurant, an outing to a professional sporting event or a boat tour — with the condition that they bring a potential client along to meet you.
Here are our suggestions as to how to help manage yourself:
• Notice your thoughts, emotions, actions/behaviors.
• Consider the big picture, the long term, your moral principles and the values that you care about most.
• Challenge and reframe your negative self-talk to limit anxious and highly charged emotions.
• Take actions that are consistent with your values and goals.
• Separate your self-esteem from events, such as the market's movements, that aren't within your control.
Learning to take care of oneself as the leader isn't always at the forefront of a lead adviser's thinking.
However, stress does have a negative impact on one's judgment, and to stay calm and thoughtful under fire is the sign of an emotionally competent individual who can work through problems and avoid taking stress home.
I am reminded of the following story, first heard in the dead of this past winter, during the throes of the downturn.
An adviser came home to the outstretched arms of his 8-year-old daughter. She quietly whispered into his ear that she wished she had a crystal ball.
Why? Because with one, she would know when the stock market would go up, and that would be the day he would have time to play with her.
So instead of coming home to find your loved ones unhappy because you take home the negative feelings associated with a market correction, get rid of the stress beforehand by using the above tips.
Art DeLorenzo, CFP, ChFC, CLU, retired from a Fortune 100 company as a group vice president. He is also a principal of MYT Group LLC, an emotional-competence-development company.
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