Grit your teeth and make that call

“Can we talk?” Those three words, which helped make a fortune for comedian Joan Rivers, embody a wise course of action for financial advisers, especially while financial markets are stirring more anxiety than enjoyment.

Advisers know they should call their clients when times are tough, but many are frozen. A small percentage of advisers don’t like the relationship part of their job to begin with, so they shy away from any possible unpleasantness.

Others think their clients are so committed to the long haul that they aren’t paying attention to the markets. Calling these clients, advisers fear, will only draw attention to a bad situation.

Still other advisers know they should call but don’t know what to say or how to handle questions about what will happen next.

Let’s attack the reluctance head-on.

Unless your clients are on a desert island, they know what is happening in the marketplace. Even if you have trained them so well that they are not particularly concerned, make the call so they know you’re on the job. If you have been clever enough to position their portfolios so that the impact is minimal, this is a perfect time to ask for referrals.

If you’re not sure what to say, do some planning first. Make sure you know what’s happening in the client’s account before you call, and be prepared to talk about it. Most people won’t feel better knowing others are doing worse but they are interested to know how their portfolio’s current condition will affect their long-term goals. And while you can’t predict the future, you can tell them what you think the most likely scenarios may be.

Also, remember that one of the most important reasons to call is to listen. People are understandably anxious about the market. Talking is a way people release their anxiety, and that often must occur before they can hear what you have to say.

Some firms, such as St. Louis-based Wachovia Securities LLC, have reached out in writing. Advisers there have sent clients letters that address “information about the safety of your assets and the soundness of your brokerage account at Wachovia.” Although it reads too much like an annual report, the letter covers SIPC coverage and FDIC insurance. At a minimum, their clients can say they heard from their adviser. The Securities Investor Protection Corp. and the Federal Deposit Insurance Corp. are both based in Washington.

This is especially important if a firm has been caught in the media spotlight. Case in point: I have not heard from my adviser at UBS in months. Client hand-holding is not his strong suit, and he probably figures I know what’s happening. When it comes to my portfolio, that is true, but not when it comes to what’s happening at UBS.

Recently, a friend with a $2 million rollover asked me to suggest some advisers. I mentioned my adviser at UBS, and she told me she was troubled about the stories she read in the newspapers. I had no response. Had my adviser supplied me with an explanation, I might have been able to address my friend’s concerns. My adviser’s failure to communicate left me with nothing to say on behalf of him or Zurich, Switzerland-based UBS AG.

It’s important to remember that what you write can be as important as how you write it.

Recently, I received an e-mail from an adviser that started:

“Dear clients and friends,

Given the recent strains facing the credit markets, we thought it would be timely to remind you of the limitations of [FDIC] coverage. We do not want to imply that the banking system is at risk, but we do recommend prudent practice.”

The e-mail reviewed how FDIC insurance works and give examples of accounts that would and would not be insured. I suspect that it more than rattled some of his clients. The e-mail could just as easily have said that a client had asked him about FDIC coverage, and he thought the information would be useful to others. We would have been given the same information and not been left wondering just what the adviser seemed to be implying in that first sentence.

Advisers should also remember that a “one size fits all” approach may not apply when it comes to communications. Rather than a single list, advisers should group their clients by level of financial literacy, anxiety or whatever fits their book. They should make sure the right message is going to the right audience — before they hit the send button.

Libby Dubick is president of Dubick & Associates Ltd., a New York firm that helps advisers and financial services firms develop marketing opportunities. She can be reached at libby@ dubickconsulting.com.

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Related Topics: Marketing Strategies, UBS AG