Recent market volatility has brought forth the eternal question among wealth and investment managers…should I reach out to my clients? Arguments against doing so typically range among the following:
• We don’t want them to think we are “overreacting”
• We can’t contact our clients every time something happens
• We don’t want to be the bearer of bad news
• If we wait a few days, things may change, and we won’t need to contact them
• If they haven’t noticed, we don’t want to be the ones to bring it to their attention
Spoiler alert: Your clients know what’s going on…
And they want to hear from you. Furthermore, if they don’t hear from you, it’s a safe bet they’ll hear from another provider. Clients pay you to “overreact.” Communicating doesn’t necessarily mean one needs to take action, but it does let your clients know you are carefully watching the market and monitoring their investments. And while perhaps you cannot contact your clients every time something happens, it is never a bad thing to err on the side of caution. In this era of information overload and instantaneous transmission of news and data, a “head in the sand” approach is unlikely to be successful.
It’s a buying opportunity
Take a cue from the rollercoaster of investor behavior. When the market is down is the time when many investors sell, even though this may be the perfect time to buy since the prices of securities are lower. Similarly, this is the exact time when a clear head, a well-defined approach and strong communications can help your organization cement existing relationships and potentially acquire new clients with a lower than average acquisition cost.