Hello, I’m Ken Haman, managing director of Alliance Bernstein’s Advisor Institute. I’d like to take just a couple of minutes with you today to talk about some of the challenges that you will face as a retail financial advisor when conducting your client review during the second quarter of 2020. Obviously, I don’t need to remind you that things are very different right now. We’re living in what the sage calls: interesting times.
So, the prudent advisor, approaching the client review, understands that these are not normal times. The client is going to be deeply affected by the context in which we’re living. Even though markets have been buoyant recently and volatility is moving in the right direction, clients are still going to be deeply affected by the things they see every day. Going to the grocery store can be a shocking experience with empty shelves, watching television, listening to the radio, shocking news stories that are designed to create strong emotions, monitoring your social media, lots of people, lots of commentary, lots of negativity. The client is going to come into these client reviews during this second quarter with a high degree of distress.
So, the prudent advisor prepares for a different kind of review. I’d like to give you just a couple of guiding principles that you might want to follow in preparing for doing a more effective review.
First, the review should be seen as a time of reconnecting with the client. I would recommend strongly that you begin the review by asking a few open-ended questions. How are you doing? How have you been feeling recently? And just listen. Let the client speak for a few minutes. This will prime their brain to be using the language centers of the brain that are located in the neocortex. This is the rational center of deliberative thought. This is the part of the brain that you are going to want to be talking to as you provide some insights into the capital markets, so it’s helpful to prime the brain of the client to be in a more rational place rather than in an emotional place.
The second thing I would recommend is that you should spend some time preparing to deliver a truly sophisticated capital markets perspective. That perspective should include answers to questions like: Do you see things as seriously as I do? Do you know more than I do about these markets? Do you have a perspective, and do you see directionality? The client needs to know what the causes for concern are, but they also need a balanced perspective with rational reasons for hope. So this is a time not to be flying by the seat of your pants, but to be preparing some thoughtful commentary on the capital markets.
Finally, as you wrap up your client review during this quarter, it’s important to remember the fundamental question every client has of their advisor. And that question is this: In spite of what has happened, can I still have confidence that the future that I want and that we’ve been working toward is the future that I’m still going to get? This is the fundamental question that the review needs to answer. The client needs to know: Am I going to be OK? And is the vision that I have for my future bill solid?
Following these principles will go a long way to help you have a successful review and to build that relationship with your client all the more stronger. Now, these guiding principles and other guidances like these are all available to you from AllianceBernstein Advisor Institute. Reach out, talk to your local wholesaler, or go directly to our website for more information on strategies that you can use to improve your outcomes with clients.
For more resources visit alliancebernstein.com/go/ABAI.
The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AB portfolio-management teams and are subject to revision over time.