Less Is More: Stay on Point with Clients in This Bear Market

by Matt Straut, CIMA - Chief Revenue Officer / on June 23, 2022

I’m not sure about you, but I have to think hard to recall the last time there were so many market and economic headwinds. Many advisors are having to field questions and provide answers from clients that just aren’t used to all the uncertainty after an incredible bull market rally. Most advisors understand that it’s important to prevent clients from being derailed by short-term market events and distracting headlines.

This is one of the most difficult aspects of an advisor’s role. A key to keeping clients on track is a consistent and concise message that puts the markets and economy into perspective. Despite the fact that many of your clients are successful in their own right, most do not have a background in the economy or markets. They can quickly become overwhelmed and frustrated as a result. Below, I’ll discuss three best practices for keeping the narrative for clients focused and on point when it comes to the market and the economic story.

1

Keep it simple

Whether preparing for a client review or discussion, a newsletter, commentary, or blog post, it’s tempting to address multiple topics and questions at once. There is always so much to discuss and explain. It’s also tempting to define every term, present the history of every topic, and perhaps include obscure facts, references and trivia.

However, when it comes to providing clients with the tools to stay invested, less is often more. For clients, this approach enhances their understanding of the topic at hand and allows them to grasp the main point with less chance of getting caught in the weeds.

For advisors, an added benefit of focusing on a specific market topic or question is that it simplifies the process of creating a client communication piece. Resist the temptation to throw everything but the kitchen sink at them.

2

Use visuals to easily explain complex market concepts

According to the Visual Teaching Alliance, 90 percent of the information transmitted to the brain is visual. In addition, the brain can process visuals more than 60,000 times faster than text. Rather than trying to cater to the other 10%, utilize insights, charts and visuals to present complex market and economics stories in an interesting and understandable way.

For instance, rather than reciting market statistics on the fact that the stock market can be volatile, the following chart visually shows that there is a large decline in the stock market almost every year, and that we are not necessarily living through unprecedented market conditions. More importantly, it’s also easy to see that most years end with a gain, which emphasizes the need to stay invested. In this case, a picture really does say a thousand words.

To clients, many times a chart or other visual really is the meaningful takeaway from the conversation or piece. These are powerful tools in any form of client communication. However the “less is more” mantra still applies - it’s important to pick just a few charts to not overload the discussion.

3

Be consistent and repeat the message

It may seem counterintuitive for advisors to repeat themselves, especially when trying to be the subject-matter expert while producing fresh, insightful content. However, repetition allows for clients to fully grasp the concepts at hand and enables advisors to illustrate how a market story has evolved, or perhaps more importantly, allows them to show how key investment principals have actually stayed the same.

Together, these three best practices comprise an effective way to discuss market and economic topics with clients and prospects. Simple, focused stories that are punctuated with visuals and repeated consistently can help educate clients and create a shared language for future conversations.

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