What Do You Tell Yourself And Your Clients About The Alarming Coronavirus And Market News?

Back in 2008 an advisor asked me, “What do I say to my clients?”  We were in the advisor’s Toronto Bay Street (Canada’s Wall Street) office watching the closing of the markets, after the market lost 7% that day.

Recent world and market activities triggered that 2008 memory and caused me to Google “what do financial advisors say to their clients when the market crashes.” Here are some of my ideas along with ideas that I mashed up from the Google research.

The first thing that an advisor needs to do is feel it. Feel all of it. Remind yourself of all the good that you have done for your clients’ lives. Feel the losses. Weigh in on all the blessings and the losses. Take it all in. Breath it in; breath in the blessings and release the losses. This exercise is one of a few that will help you to change your Mindset when alarms are going off in your mind, or in the minds of your clients; 7 Steps To Reset Your Mindset 

Behavioral economics research indicates that people feel the pain of loss twice as much as the joy of gain. It hurts twice as much when markets go down and it makes us happy when markets go up. Masking fear and pain during loss and uncertainty is not healthy for the financial advisor or for their client. No different than me being a financial advisor coach as I’m doing my research, feeling and healing now to be of service to my financial advisor clients.

If an advisor masks their pain, they will not be available to their clients to help their clients be educated and informed which helps their clients to process the fear and pain that they may be feeling during loss and uncertainty. One has to understand it, feel it to heal it.

Who you are at your core speaks louder than what you say. If you are masking the fear and pain in your core, you will likely trigger and may magnify what your clients are feeling at their core. MSNBC reported that 71 % of financial advisors are experiencing moderate to high stress compared to 61 % of investors who experience moderate to high stress. Again, you have to feel it to heal it.

In the western world, people have not been taught to process their emotions, for the most part talking their emotions out, in their family environment, often projecting their pain onto others, which may medicate short term, but does not heal.

So in the midst of market uncertainty, people reach out to financial advisors to be heard, for some reassurance and to release to the leader of their financial advisor family, which is their financial advisor.

Clients are like family to a lot of financial advisors as most financial advisors have developed deep relationships with their clients. Market losses are very scary for financial advisors, because no matter how much they believe they have done the right thing, in the back of their mind, they are worried about their clients.

Financial advisors have a lot of emotional responsibility, not only for the separation of their own emotions, but also for the separation of their client’s emotions, from their financial decisions.

Investors have gotten so used to a near decade long bull market, that they may not know of anything else, much less knowing how to handle anything else. Emotionally fueled investors may be less worried about the downside than about missing out on the gains that exist.  Emotionally fueled investors get so used to the market going up, that they think that it is going to go up forever until it doesn’t. Then they emotionally flip.

There are some that believe that it is biologically impossible for advisors and investors to balance their emotions without also being fully informed and engaged. There is nothing wrong with emotions, it is acting upon the emotions without being fully informed and engaged where problems arise, and this is where the role of the financial advisor comes in.

There is no doubt that there was an absence of a balance of emotions and mindset with less than one in five financial advisors calling their clients after September 11.

This is why it is essential, now more than ever, for financial advisors to have balanced emotions and with balanced emotions comes a balanced mindset.

Educated and informed clients that work with financial advisors know the market(s) are not necessarily representative of a client’s portfolio as many clients’ portfolios are diversified with a number of asset classes.

Some believe that calling clients and telling them not to panic isn’t necessary, which may even give a client a reason to panic, which is counterproductive.

Counterproductive because financial advisors have been advising and communicating with their clients for months, perhaps longer, that the market is due for a 10% correction, that corrections are normal. These communications have been going on through regular newsletters and during regular client reviews, where advisors educate and communicate with their clients discussing clients’ level of risk tolerance, investment objectives and the positioning of their portfolios.

No one knows if this is the end or just the start of a periodic downturn.

What are my thoughts about the Coronavirus? Back in 1990, I had a double compound fracture of my left ankle from an 11,000 foot tandem skydiving accident while on my first Tony Robbins franchisee training. One of Tony’s senior NLP trainers reminded me that; “You have an infinite immune system that is working with you twenty-four / seven without you having to think about it NOW!”

Here are the links from the Google Research

• 4 critical questions to ask during a market downturn — and how financial advisers answer them
• Advisors to clients: Stay calm and carry on
• How Financial Planners Deal With Clients Who Freak Out Over Market Volatility
• Remembering 2008, financial advisors share some lessons learned and look ahead