During wild stock-market swings, financial advisers brace for turbulence. They anticipate frantic calls from agitated clients. Amid steep downturns, advisers often focus on a client’s long-term goals, champion a stay-the-course strategy, and provide historical perspective.
All of this still may not relax a panicky investor. Regardless of how well advisers train clients to treat severe declines as a byproduct of risk, market swoons still sting.
Perhaps the most common response to jittery clients is also the worst: urging them to calm down. Telling a distressed person to cool it almost guarantees they won’t.
Savvy advisers dig deeper to manage client emotions. They put principles of psychology to work to tamp down irrational thoughts before those worries spiral out of control. They listen more than talk, and ask questions before trying to explain.
“When people are highly emotional, they don't respond to linear information like charts and graphs,” said Dennis Nolte, a certified financial planner in Winter Park, Fla. “They want to be heard and understood before the numbers mean anything.”
A former therapist, Nolte knows that clients under stress need more than a lesson in risk tolerance and a lecture on sticking to the plan. What they really crave, he says, is human connection.
Listening patiently without interruption dignifies their concerns. Asking earnest questions (“Can you tell me more about that?”) indicates your eagerness to learn. And by sharing in their anxiety, you show that you’re in the same boat.
“Empathy certainly helps with bonding,” Nolte said. “Saying, ‘We’re all going through this together’ tends to relax them. They see they’re not alone, that we’re in tandem.”
As a therapist, Nolte learned not to discuss his personal experience with patients. When he switched to financial planning, he says he was taught to “never show a client your portfolio.”
In his three decades as an adviser, Nolte has found that it’s okay to open up with clients as long as he’s established a well-rounded relationship with them. He adds that by matching his voice to their pitch, tempo and intonation, he can solidify his bond while exuding calm.
“Vocal modulation helps your clients know you are in a similar space as they are,” he said. But if they’re speaking too loudly and rapidly, it’s better to dial down your volume and slow your rate of speech rather than follow their frenzied lead.
A soothing voice is only part of a response. Choosing the right words adds another layer of calm.
Monica Dwyer, a certified financial planner in West Chester, Ohio, says she learned early in her career that top advisers “never use language that would alarm a client.” Rather than fret, “I’m really disturbed by this awful market,” for example, you can say, “Put in a larger context, what’s happening today is normal.”
Sitting upright and maintaining friendly eye contact goes a long way toward restoring calm.
She estimates that about half of her client communication occurs over the phone. For the other half — face-to-face conversation — she pays attention to her nonverbal cues. She notes that sitting upright and maintaining friendly eye contact goes a long way toward restoring calm.
Your office environment plays a role in helping nervous clients get a grip. Many advisers set the stage by creating a cozy meeting space that’s homey and free of distractions (like news blaring from a television or a giant computer screen with a heat map of stocks).
Most of all, guiding an upset client to regain peace of mind requires a willingness to listen without judgment and an ability to ask questions to confirm their goals haven’t changed. Once you do that, you’re well-positioned to offer wisdom and urge perseverance.
“When clients call me in a panic, it’s important to shut up and listen,” Dwyer said. “I’ve literally sat on my hands because I talk with my hands. Afterward, they’ve confessed, ‘Oh, I just wanted you to tell me it’s all going to be okay. I wanted you to talk me through it.’”
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