Insight post

Apr. 26, 2022

Retaining Clients & Building Value During a Crisis

Practice Management Insights


At the start of 2020, it would have been very difficult to predict that we would be in the market environment we find ourselves now – rebounding from a pandemic of a novel virus, unprecedented market volatility, record monetary and fiscal responses, supply chain issues, a long road of uncertainty ahead. The S&P 500 Index suffered its fastest decline of 30%, dropping 34% from peak to trough in a matter of weeks. Ten years of job growth were wiped out in just 28 days.


While the market rallied off the March lows in 2020, mounting inflation, the war in Europe with Russia invading Ukraine, rising geopolitical tensions, and a shift in US Federal Reserve policy is creating pressure on the S&P 500 again. Many strategists are predicting a possible recession or even stagflation in 2023.


Undoubtedly, this is a difficult time for many businesses of all sizes and in all sectors, and the path ahead is not entirely clear.


However, financial advisors should view market crises as an opportunity to showcase their value to their clients.


Advisors may improve client retention and satisfaction through proactive and consistent communication, providing actionable advice, and effectively managing risk. How financial advisors respond to a crisis and guide their clients through a time of extreme uncertainty can have profound impacts on their business.


1. Communication is Key

Proactive Communication

Advisors can improve client retention during periods of market crisis with proactive, rather than reactive, communication. Don’t wait for your clients to call you. At the outset of any potential crises, advisors should reach out to clients through e-mail to notify them that the advisor is keeping an eye on the situation and reassure them that protecting their irreplaceable capital is a priority.


Communicate Often

In addition to reaching out to clients proactively, advisors should strive to become more connected to their clients with consistent communication to ensure they feel informed and secure:

  • Send regular emails, such as newsletters with helpful insights and outlooks
  • Schedule virtual check-ins, or calls with clients who need regular touches
  • Utilize social media to share information, updates, and insights to stay top of mind
  • Provide relevant and timely updates to your website


Communicate with Purpose

With almost everyone staying home, now is a great time to host virtual events to connect with and educate clients. Consider holding virtual webinars or digital client events to:

  • Unpack the crisis and discuss recommendations for protecting capital
  • Present on personal finance topics related to challenges clients may be facing
  • Set up weekly virtual “coffee chats” to educate on a topic or inform with market updates


Many of these video conferencing platforms allow participants to ask questions during webinars, adding another valuable touchpoint between advisors and their clients.


2.   Be the Voice of Reason

When major market events occur, clients are susceptible to getting wrapped up in a myriad of news headlines and tweets. Seeing rumors or half-truths could lead clients to panic and act emotionally, ultimately causing them to take money out of the market to avoid “losing.”


During market crises, it is important for advisors to be the “voice of reason” to help their clients avoid making irrational, emotional investment decisions. With consistent communication, you can effectively provide reassurance and guidance.


Emotional investing could lead to a significant derailment of an investors’ goals. When a client sees a negative news headline or tweet, advisors need to be there to be the “steady hand” and work with their clients who express concerns. These clients need to be reassured that focusing on the long-term rather than day-to-day market moves will bring them closer to achieving their financial goals.


Consider incorporating behavioral finance topics and reminders in your communication efforts to keep these concepts and lessons top of mind. Encourage clients to reach out when they feel anxious about their financial plans and to talk through their concerns. Leverage easy-to-use services, like Calendly, Acuity, or other scheduling services to avail yourself and streamline appointment requests and confirmation.


3. Effectively Manage Risk to Protect Clients’ Irreplaceable Capital

Finally,  the speed of this global black swan event reminded everyone how market risk can quickly and significantly impact portfolios, and that risk must be effectively assessed and managed regardless of the market environment.


Clients want to know now more than ever what you are doing to help prepare them for the uncertainty ahead.


Consider implementing strategies that mitigate risk and protect clients’ irreplaceable capital. Hedged equity or options-based strategies, which are at the core of Swan’s Defined Risk Strategy (DRS), have helped investors navigate and capitalize on the last two bear markets by hedging risk while producing consistent returns through full market cycles.


Managing Risk in a Redefined Advisory Landscape

Advisors are fiduciaries living in a litigious world and tackling a daunting investment environment. Simply maximizing return and limiting costs is not enough and can be problematic. Those advisors that help investors understand the benefits of optimizing risk-adjusted return in a low-yield world, while focusing on a goals-based approach, will be better positioned to not only meet the heightened fiduciary standards but also to compete and succeed in a competitive wealth management and financial planning marketplace.


Telling clients to “just ride it out” may no longer get the job done. It is important for advisors to instill confidence in their clients by giving them actionable advice and do so more effectively using digital communication. Reminding clients they have a plan is important, but it may be more important to ensure the plan is leveraging effective risk-managed investment solutions and in line with their risk budget in order to help investors stick to their plan.


In uncertain times, with many being forced to adjust their lives and reconfigure their businesses, it may be the most difficult time to be an advisor. But your services are priceless during such times and offer you the greatest opportunity to demonstrate your value. Advisors who take advantage of the opportunity stand to prosper for themselves and for their clients. 

David Lovell, Managing Director – Head of Marketing, is responsible for Swan’s brand, marketing, content, events, and media. David began his career in the financial industry at Mass Mutual. David currently holds a Series 65 license.

Important Notes and Disclosures:

Swan Global Investments, LLC is a SEC registered Investment Advisor that specializes in managing money using the proprietary Defined Risk Strategy (“DRS”). SEC registration does not denote any special training or qualification conferred by the SEC. Swan offers and manages the DRS for investors including individuals, institutions and other investment advisor firms. Any historical numbers, awards and recognitions presented are based on the performance of a (GIPS®) composite, Swan’s DRS Select Composite, which includes non-qualified discretionary accounts invested in since inception, July 1997, and are net of fees and expenses. Swan claims compliance with the Global Investment Performance Standards (GIPS®).

All Swan products utilize the Defined Risk Strategy (“DRS”), but may vary by asset class, regulatory offering type, etc. Accordingly, all Swan DRS product offerings will have different performance results due to offering differences and comparing results among the Swan products and composites may be of limited use. All data used herein; including the statistical information, verification and performance reports are available upon request. The S&P 500 Index is a market cap weighted index of 500 widely held stocks often used as a proxy for the overall U.S. equity market. Indexes are unmanaged and have no fees or expenses. An investment cannot be made directly in an index. Swan’s investments may consist of securities which vary significantly from those in the benchmark indexes listed above and performance calculation methods may not be entirely comparable. Accordingly, comparing results shown to those of such indexes may be of limited use. The adviser’s dependence on its DRS process and judgments about the attractiveness, value and potential appreciation of particular ETFs and options in which the adviser invests or writes may prove to be incorrect and may not produce the desired results. There is no guarantee any investment or the DRS will meet its objectives. All investments involve the risk of potential investment losses as well as the potential for investment gains. Prior performance is not a guarantee of future results and there can be no assurance, and investors should not assume, that future performance will be comparable to past performance. All investment strategies have the potential for profit or loss. Further information is available upon request by contacting the company directly at 970-382-8901 or 194-SGI-043020