Few things test the mettle of financial advisors like a prolonged period of market volatility and economic uncertainty. However, such an environment presents advisors with an optimal opportunity to demonstrate their value: from reassuring anxious clients to offering strategic insights and solutions to help manage the impact of market downturns, volatility can deliver advisors their best moment to shine and establish themselves as a trusted “go-to” for counsel and guidance.

The forces that trigger market downturns run the gamut – from inflation to tariffs and from consumer spending to geopolitical unrest. Also, the markets – like humans – can sometimes be irrational and become volatile on sentiment alone. Whatever the cause, market turbulence can have an outsized impact of client behavior … triggering short-term responses that can derail even the most meticulous long-term plans. Fear and anxiety can drive any number of disadvantageous (and all too human) responses including:

• flight (selling low)
• freeze (doing nothing)
• herding (following the crowd)
• myopia (thinking short-term)

Helping clients tame the inherent tendencies we have as humans – ones that sometimes are not in our best interests – is a big part of the financial advisor/client relationship. Financial advisors familiar with the tenets of behavioral finance are well equipped to handle these scenarios. Even if you don’t have specialized training or hold a Behavioral Finance designation, you can apply time-tested principles to see clients through tough conditions. After all, the best financial advisors are part wealth manager and part psychologist. You already know your clients and their goals. You already understand their feelings around wealth and their risk tolerance. Here are a few steps you can start taking right now to help weather the storm and emerge with even stronger client relationships that will endure:

Make it about the relationship – not just about the numbers.

Markets go up and they go down. Tying your value to portfolio performance will, at some point, come back to bite you. You are more than your clients’ returns. Make the relationship, your availability, and your expertise the epicenter of your service offering.

Communicate, communicate, communicate.

Increase your engagement, even if it means random check-in calls. Don’t have a client newsletter? Start one. Let clients know they are top of mind, that you understand their fears, and are available to quell their fears and answer their questions. Consistency builds trust and ensures they feel supported. Up your social media activity. Offering clients as many avenues of outreach and meeting them where they are is essential – the more touchpoints the better.

Empathize and educate.

During market, economic and geopolitical upheaval, there is no shortage of headlines, commentaries and news designed to grab readers’ attention (aka: click bait). Unfortunately, many of these stories provide little information but stoke plenty of fear. It’s important to help your clients look beyond the headlines to understand the nuances of what is happening and what it means to them. Clients often do not know where to look for market/economic information that impacts their portfolios. Make sure they don’t need to look further than their advisor for information and care.

Focus on what can be controlled.

Leverage your skills and experience to offer solutions that address clients’ needs today and into the future. Partner with product providers offering diverse strategies that support your diverse client base, particularly those who are risk averse or with complex needs.

In times of volatility, be the constant.

Help clients take a long-term perspective and continue working toward their long-term goals using the plan you’ve already helped them put in place. Don’t dismiss their fears but help work through them and remind them of their “why.” Be a sounding board and a reliable source of objectivity and guidance. Recognize what’s driving their emotions and offer meaningful steps to mitigate their fear. Your clients and your business will be the beneficiaries of this approach.