Steering your firm through the crisis

In challenging times, communicate liberally with the people who are responsible for the success of your firm

Given the current volatility in the market, where things will be a week from now is anyone’s guess. What is certain, however, is that your clients and staff are looking to you for guidance.

Unlike other businesses in a supply chain, advisers are face-forward with no anonymity. You’ve got to respond quickly when turbulence hits and emotional investors are tempted to make life-altering mistakes, or nervous employees are feeling the heat, both professionally and personally.

How you communicate in the face of market and economic adversity defines you as an adviser and leader going forward. These are challenging times, so communicate liberally with the people who are responsible for the success of your firm.

For clients, there is a fine line between not enough information and too much. For many of your long-time or older clients, the recent pullback isn’t their first rodeo. Some are undoubtedly the type of folks who hired you to handle things and are going to let you do just that.

For others, however, your messaging, tone and reassurance are all that stand between them and sheer panic. Due to the recent up-and-down market, for example, we’ve reached out on three separate occasions with specially crafted communications for clients. Our overarching goal has been to explain what is happening and why it’s happening, and to assuage fears.

While three market-motivated client contacts may feel sufficient, other than a rough December 2018 (and doesn’t that seem long ago?), remember that it now appears that things may remain actively seismic for a while. As an emerging battle unfolds against a dangerous pandemic, this is about more than just portfolios. People are concerned for their health and the health of their loved ones. Most people are having trouble tapping into a calming presence.

Reaching out

This week, as the realities of a difficult economic period emerge, our chief investment officer penned a first-person narrative for our clients. First, he conveyed the bottom-line reasons behind the recent slide. Next, he presented a history of market corrections related to oil shocks and the outbreak of disease, including both severity and market recovery times. Lastly, he not only reminded readers that these events are historically common, he explained the ins and outs of market circuit breakers, which a lot of people had probably never heard of until recently.

In that same email was a link to a presentation I recorded recently reminding clients that their investment plans were in fact constructed to account for this type of situation. If you’re a fiduciary adviser, that messaging should hold true for you, as well.

The question is then, do communications alleviate fear? Aside from ample anecdotal evidence, our three recent communication emails have garnered extremely high open rates, topping out at nearly 70%. No one said, “Enough already!”

Trying times

While email communications have proven successful for clients, the coronavirus and the drama that is today’s market are also having a big impact on your staff.

Staff members are not only dealing with worried clients, after a decade of relentless upticks, they are probably concerned about how a down market will impact their jobs and even their own investments. And, as if that weren’t enough, there’s also the larger concern about how the virus may affect their health or the health of those they love.

These are trying times, and, as with clients, I encourage you to set a tone with your staff that carries forth well beyond the duration of this event.

A couple of weeks back, when it became apparent that uncertainty was escalating, our senior leadership team reviewed and updated our contingency plans.

Now, as the evolution of how severely the virus will impact your firm, clients and staff unfolds — not merely weekly, but perhaps even daily — you’ve got to prepare for best-and-worst case scenarios. After that, you got to settle on something that addresses fears and work concerns based on what you know to be true at this time.

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We’re in a face-to-face business, but we’ve taken steps to make certain all our advisers are well-versed in our video conferencing service. Knowing how to create and send a video appointment link to a client, without a hitch, is a good way to ease the pressure on advisers who are typically hosting five or six face-to-face meetings a day.

We have over 200 employees in 17 cities, and depending on the number of coronavirus cases in each region, the level of alarm varies. We all respond to the threat of disease, and the related headlines, in unique ways. In view of this, we have made it possible for almost every team member to work from home. For those in positions, such as receptionists, where that is not feasible, we are working with them to make sure they know that they can take the time off they need to feel comfortable.

In a fast-moving market cycle, with the added element of an infectious disease, the one thing you can do for everyone, from both an investment adviser and an employer perspective, is explain what is happening, why it’s happening, and what you are doing to both support them and to keep it from becoming worse in the future.

Scott Hanson is co-founder of Allworth Financial, formerly Hanson McClain Advisors, a fee-based RIA with $8 billion in AUM.