March 18, 2020
During times of extreme market volatility like we are experiencing today, I consider myself to have been very lucky to have gone through the 2008 financial crisis. Being in the industry throughout those events has taught me a lot of patience and has given me a frame of reference to compare other market events. There is no doubt that the velocity of movement in the market has certainly picked up because of several things, including speed of information, social media, smart phones and even ETFs.
The elements of human behavior which drive market movements in the short term remain consistent, which presents an opportunity for advisors to be professional guides for our clients as we navigate through the turmoil.
Some things are different for me this time around. In large part I would say that clients who have worked with me for longer periods of time seem to be better prepared, calmer and certainly more open to looking for the opportunities that volatility can present. Thinking back to 2008-2009 - and granted, I think the financial crisis was a far scarier time for individuals and families - I remember seeing the fear in clients. The volume of incoming calls and emails was certainly higher, and the amount of poor decisions being made by clients with their money was a symptom of that panic despite my advice to be patient. So, what has changed? Well, frankly, a lot!
The financial crisis was one of the best training grounds that any advisor could have experienced. From that event we learned that we needed to have better processes around client communications, and we needed to implement new technology in order to improve efficiencies so that we could connect to clients on wider scale and quickly. Additionally, we recognized that we needed to change the conversation that was being had with clients around where value is truly coming from. While doing this, we also knew that market crashes can be the best time for business acquisition, so we needed to be able to do all of these client communications while still ramping up our business development at the same time. To be better prepared, here are the changes we made:
None of these steps are easy to take and required years of development but the rewards have been evident throughout the last month as our client conversations have been dramatically different. Not only have we received far less in bound communications but the ones we have received have been discussions about investing extra cash that has been sitting on the sidelines. A testament that our training and advice is resonating.
Markets like these are never fun, but the work we do today could pay dividends for the next decade.
Grant White is a Portfolio Manager/Investment Advisor at Endeavour Wealth Management with Industrial Alliance Securities Inc, an award-winning office as recognized by the Carson Group. Together with his partners he provides comprehensive wealth management planning for business owners, professionals and individual families.
Reference Link: https://www.wealthprofessional.ca/news/industry-news/what-did-we-learn-from-the-great-recession/327623
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