How to Grow Your Business During Volatile Markets

How to Grow Your Business During a Volatile Market

Volatile markets are something all financial advisors have to deal with sooner or later. 

During my forty years in the industry, I’ve coached tens of thousands of advisors through multiple bear markets and dozens of market corrections.  The 1987 stock market crash.  The bursting of the dot-com bubble.  The aftermath of 9/11.  The Great Recession of 2008.  I’ve seen it all. 

More specifically, I’ve seen what the top financial advisors do to not only survive under market volatility, but thrive. 

Have you ever wondered why some advisors always seem to keep growing, no matter what sort of shape the markets are in?  If so, I have the answer, and it’s a very simple one:

They followed the LAW OF HANDHOLDING

The Law of Handholding is very simple.  It states:

When bad or unsettling news happens, clients and prospects need to be told what to think…and quickly. 

Otherwise, both will become someone else’s clients. 

You see, while market volatility might be unpleasant for investors, it can be a godsend for you.  Don’t believe me?  Then check out what History has to say. 

Come back with me to autumn of 2001.  The nation – indeed, the world – was still coming to grips with the 9/11 terrorist attacks.  This was especially true of financial advisors, as noted by a writer named Thomas Kostigan.  On November 20th, he published an article in CBS Market Watch titled, “Financial advisors ran, hid on September 11.”  Among other things, Kostigan found that less than one in five advisors called their clients during the period right after September 11.  As a result, as many as one third of all clients not contacted by their advisor looked to switch to someone else

Kostigan found the same phenomenon occurred after the stock market crash in October of ’97.  Back then, only 18.3% of advisors called their clients.  Once again, many of the clients they didn’t contact got fed up and started looking for someone else to help them reach their financial goals.

I imagine that if Kostigan were to update his article, he would find similar data in 2002…and again in 2008…and for that matter, early 2018. 

Now, the immediate conclusion is obvious.  During times of market volatility, like right now, it’s crucial that you reach out to your clients.  Otherwise, you may lose business. 

But now look at it from another angle.  According to Kostigan, as many as one third of all uncontacted clients looked to switch to another advisor after 9/11. 

That’s tens of thousands of investors.  Frustrated.  Unhappy.


Those are your prospects. 

What Clients and Prospects Want from their Advisor During Volatile Markets

Take a moment to imagine a hypothetical prospect whom we’ll call Velda. She just heard that the Dow dropped 1,000 points in less than a day.  She waits for her advisor to call to explain what’s going on and what she should do. The phone never rings.

So she calls his office. He’s unavailable. 

Is she frustrated? You bet. 

The next day, she gets a handholding letter from you explaining exactly what’s going on and why. A day or two after that, she gets a call from your office, asking if she has any questions, or if there’s anything you can do for her. 

Is she impressed? You bet. And before you know it, suddenly Velda starts thinking of you whenever she’s in need of financial advice. volatile market

To put it simply, you can use market volatility to your advantage by simply being out there, proactively contacting, educating, and reassuring your clients and prospects that someone is watching out for them, and that they have options

It’s how you get clients to stay with you even when their quarterly statements might not look so good.

It’s how you get clients to trust you with even more of their assets. 

It’s how you get clients to refer friends and family.

And it’s how you get prospects to start thinking, “Why should I stick with my guy when this other advisor is already doing so much more for me? 

To help you start reaping all these rewards, here are:

The Nine Steps to Effective Handholding During Volatile Markets

  1. Call each of your clients – even the ones with small accounts! (You never know who has a $500,000 IRA somewhere, or an ultra-HNW relative.)  Explain to them that you are monitoring the situation, and that you are sending a letter/email to them that explains the current volatility in greater detail.  Invite them to share any questions or concerns they have with you.  
  2. Send out a handholding letter to each of your clients as soon as possible. A good handholding letter should not only recap what’s going on in the markets, but explain   (The more education you provide, the more your clients see you as a true expert in your field.)  NOTE: You can certainly send a handholding email, but it is STRONGLY recommended that you also send a physical letter.  Our research has proven that letters get read, kept, and shared far more than emails.    
  3. Once your clients are taken care of, send the same handholding letter to your prospects. Not only will they appreciate the gesture, they will get a glimpse into how you treat your clients…as opposed to how their current advisor treats them. 
  4. Call as many of your prospects as possible. Encourage them to ask questions.  Invite them to come in for a second opinion of their portfolio and risk tolerance. 
  5. Send a short email to all your clients. Ask this very simple question: “Do you have any friends or family who would like to receive the letter I sent you?”  (This is a great way to get referrals.)
  6. Do some event marketing. For example, consider putting on a client education event centered on the current market volatility, and encourage your clients to bring friends.  Or, do a full-blown prospecting seminar on the same topic.  
  7. Give conference calls a try. Some of my clients use these with great success.  Every week or so, host a CC centered on a different aspect of the market volatility, or a particular investment affected by the volatility.  Invite your clients, strategic partners, and existing prospects to attend, and encourage them to spread the word.  Compared to seminars, these are much easier and less expensive to put on. 
  8. Offer to be an “emergency speaker.” Contact different organizations, clubs, or other groups in your area whose members you want to know.  Offer to come speak on the current volatility. 
  9. Start cold calling! Sales is a numbers game, and there’s no better way to reach a large number of people quickly than through cold calling.  

So there you have it – nine ways to grow your business by using the current market volatility to your advantage. 

But whatever you do, remember: there are thousands of investors out there who aren’t hearing from their advisors during volatile markets.  That means they are looking for a change. 

Don’t you want to be the first advisor they see? 

Time to get handholding. 

Good luck!

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