by John Lohr
With uncertain markets in mind, here are 12 steps to Building Clients’ Trust in times of investment uncertainty.
1. First of all, in the words of Douglas Adams: “Don’t panic”. You project uncertainty in your Clients’ minds if you, yourself, are unsure.
2. Obfuscate any of your insecurities. Your Client pays you to communicate. Some of your investment suggestions will be right and some will be wrong. Don’t dwell on that.
3. Don’t read mainstream media: USA Today, CNBC, Fox news, etc. Zoo to pander, but one of the most valuable sources of unbiased information is this site, Seeking Alpha. Ours is a relationship business, so I quantify Seeking Alpha as referring, not just to performance, but to quality of your relationships with your Clients.
4. At the same time, know whats’s going on: “Just the facts”. Read both (or all) sides from trusted experts, not news readers.
5. Know what your Firm says: wirehouses have large analyst staffs and economists that are paid plenty to opine on these things. What are they saying?
6. What does your firm say you should do?
a. Calm and ease clients fears.
b. If you don’t have large or good firm resources, read Seeking Alpha. There are a lot of smart people writing here.
7. Understand: No-one. Repeat: No-one knows exactly what the turbulence caused by BREXIT will result in. No-one.
8. Understand Markets feed on uncertainty and fear. Is it a buying opportunity or a wholesale time to fly to cash or gold? Probably neither, except in moderation. Buying in is for risk takers and speculators. Selling is for the fearful. Remember for every buyer there is a seller. Do you think the traders executing on the 2d floor computers in Atlanta, (or wherever) are smarter that you? Rethink that.
9. Compose yourself and formulate an opinion you can truly believe in. THEN and only then Communicate with all of your Clients. Every. Single. One. Of. Them. Be sure to take all of the phone calls from your clients, though. They don’t want to know what you think they should do. They want to know you’re keeping your pulse on what is happening and, if necessary, will take some action of their behalf. They want to know that you care. Listen more than you talk. If you’re composed and at ease, it will be reflected in your tone of voice, believe me. Clients expect you to remain calm in crisis (or more likely, perceived crisis). That is a fundamental cornerstone of what their trust in you is founded on.
10 Tell Clients what your Firm thinks, believes. Rely heavily on that.
11. Tell your Clients that you and they together crafted an investment philosophy tailored to their goals and comfort zone, and you’re going to stick to that.
12. Remind them that there have been only a handful of prolonged downswings in US markets in the past 80 years. Close by telling then “Look, if you have any concerns or questions, call me anytime.” Give them your cell phone number.
On any day the US market may go up, down, or sideways. You can’t control that. Your firm probably advised you to stay the course. It’s probably a good idea. If you feel you have to do something, make some tactile moves that are well researched. If you honestly believe that everything is going to hell in a hand basket, go ahead and react, but please remember your reputation and Client trust is hinging on that. You own your decision.
More on the building of Client trust as we go along.
Regards,
John