Crises create money in motion—investors looking to possibly leave their current advisor because they’ dissatisfied and newcomers seeking financial advice for the first time. In fact, a recent study, according to the article, finds that the pandemic has caused one out of every four investors to work with an advisor for the first time. For newcomers, a market crisis often exposes that they have taken on too much risk.
To help attract and keep these newbies, advisors can think about simple content strategy, which can include very basic videos, to communicate with investors about a number of topics, such as rebalancing a portfolio, managing risk, etc. But, its important for advisors to be helpful, and not overly self-promotional—a soft pitch, not a hard sell. Remember, many of your potential clients are scared or in crisis themselves, and a personal touch can go a long way.
The second group of investors in play is those unhappy with their current advisor. The main reason clients fire their advisor is a failure to communicate. It is the top driver of dissatisfaction in good times and bad.
The easiest way to find unhappy investors is to simply ask your friend, family, and broader network. It could lead to millions of new dollars for your firm.
Taking a proactive approach with current clients can also have an impact on attracting new clients. “Leading advisors are adding value through rebalancing portfolios, tax loss harvesting, providing updates to financial plans, re-taking risk tolerance profile assessments, recommending re-financing to take advantage of historic low mortgage rates, moving client’s idle cash to higher yielding products instead of letting custodian bank sweeps return scraps, and more,” Welsh writes for Think Advisor. “These visible, pro-active steps show to clients that you are there for them, adding value and earning your advisory fees.”
Welsh says now is not the time to retreat or cut staff. Now it the time to seize the opportunity created by crisis—to serve current clients well and help new ones.