We’re clearly living in uncertain times. The novel coronavirus (COVID-19) has spread worldwide, the financial markets have responded with record drops, and many clients are paralyzed by fear. As a licensed psychologist, I’m regularly tasked with helping individuals manage fear.
In times of uncertainty, financial professionals must also serve as “behavioral psychologists” as they help clients overcome their financial fears. Simply delivering well-founded investment counsel is not enough. When fearful, clients are likely to resist, avoid, refute, and even reject your advice. During these times, I encourage you to proactively reach out and connect with your clients.
As you do, draw upon four skills used by professional psychologists to move clients from fear to action. For each skill, I’ve provided specific actions you can take to help your clients deal with uncertainty.
Clients are swamped with news about the coronavirus pandemic and its impact on the global economy, so it’s understandable why they may be overwhelmed with anxiety. Rather than conveying that fears are unjustified—or that all will be OK in due time—consider a different approach. Put yourself in your clients’ shoes and empathize. Ask about their concerns and fears, reflect how they’re feeling, and meet them where they stand.
When financial markets tumble, you’re likely to see opportunities where clients see threats. You may see buying opportunities where clients see exit doors. As a trained financial professional, your preparation provides you a readiness to act that likely exceeds that of your clients. Your experience likely allows you to be calm and proactive when they are feeling fearful and reactive.
Before advising clients to act, it’s critical to take the necessary steps to prepare them to hear and heed your advice. Ask yourself: “Is my client sufficiently prepared to act?” and “What financial knowledge, information, and experience do I have that my client does not?”
Consider how you can better prepare clients to understand what you see. What facts and resources are you referencing that support your recommended course of action? What historical trends and evidence can you share? What were effective recovery strategies in similar uncertain times in the past? How did different financial strategies work during those times?
Focus on opportunity
Once you’ve adequately prepared your clients to hear and consider your suggested course of action, you must deliver the information through a lens of opportunity. Clients often view uncertain times through a lens of threat that clouds their ability to see and act on potential opportunities.
Take the time to plan the delivery of your recommendations by considering how you intend to mitigate impending risks and how you’ll shine light on available opportunities. Strive to ease clients’ fears by calmly and transparently explaining the steps you’ve taken (or are taking) to manage any risks and needs that clients view as primary. As you reassure clients, you can transition your conversation to explain possible benefits from current economic conditions, such as low mortgage/refinancing rates. As clients’ perceptions shift from threat to opportunity, their motivation to act tends to heighten.
The value of professional advice is only as good as what’s executed. Thus, with opportunity on the front burner, guide your clients along the path toward what’s in their best interest.
Finally, recognize that there’s no suggested timeline for the four steps I’ve discussed. Some clients may be ready to act immediately, while others may need more time. Whenever they are prepared to act, be ready to deliver your recommendations and execute.
Pro strategies for a resilient practice in uncertain times
Performance coach Dr. Rick Jensen and Senior Investment Strategist Dr. Brian Jacobsen, CFA, CFP, recently participated in a webinar, where they discussed:
- Three proven performance strategies for a resilient practice
- How to stay confident while in volatile, unprecedented markets
- Professional guidance to manage client anxiety and gain trust in your decisions
- Positioning portfolios for opportunity to help clients stay on track
Dr. Rick Jensen is a renowned performance coach, author, and professional psychologist. He has consulted with many financial and sports professionals and has had a longstanding partnership with Wells Fargo Asset Management. In golf, his clients have combined to win 33 major championships, and in tennis, he has coached winners of all four Grand Slam championships. Dr. Jensen has been featured on ABC, ESPN, CNN, and the Golf Channel.