Calm clients during volatile markets with technology and a plan

September 16, 2019 by Angela Pecoraro

Angela Pecoraro featured on ThinkAdvisor

About the author

Angela Pecoraro

Chief executive officer

As chief executive officer, Angela leads the global executive team steering them toward a common mission of delivering state-of-the-art technology to clients of all sizes worldwide. Her personal goal at Advicent is to perfect the customer experience and create extremely satisfied, life-long clients as well as develop a team of first-in-class leaders across the business.

Originally published via on September 13, 2019.

My most recent piece on ThinkAdvisor breaks down the importance of a comprehensive financial plan for investors, especially in times of market volatility.

Read the full article below:

Calm clients during volatile markets with technology and a plan

The recent volatility and ongoing uncertainty in today’s market underscores the need for comprehensive, living-and-breathing financial plans. Investors can understandably become anxious when hearing about market downturns in real time and may choose to sell or make other rash decisions in the heat of the moment which, later on, they could regret.

Having a financial plan in place that an investor has crafted with their trusted advisor, spelling out instructions for how to react under certain market scenarios, can help investors refrain from possibly self-destructive actions. Furthermore, modern financial planning software enables advisors to interactively demonstrate for clients, remotely and in real time, within their client portal the effects that possible moves in response to current developments would have on their portfolios over the long term.

In this way, advisors can serve as a calming influence on investors during times of market stress, without even leaving their offices.

The financial planning process gives advisors the opportunity to begin collaborating with, and “coaching,” investors before they encounter market volatility. From the very start of the advisor/client relationship, the advisor can harness modern financial planning software to better understand the client’s investment goals and risk tolerance, and run unlimited scenarios to show the client the likely outcomes of different types of strategies and allocations.

Advisors can also run “drills” with clients to walk them through what to do in the event of frightening market drops. Besides running drills, advisors can include steps to protect clients in writing in financial plans. For example, advisors can suggest to clients that they abide by a rule that sales should not be undertaken during market downturns without first discussing them with their advisor. Any such rules set down in financial plans should be reviewed with clients during annual and quarterly meetings.

During the process of creating financial plans, and during every review of plans thereafter, advisors can discuss how different types of investment strategies and asset classes tend to perform during market volatility, and which combinations can help weather market storms and deliver returns even in volatile conditions. These discussions help advisors work with clients to select strategies and asset classes that would best help clients meet their goals (and protect and grow their wealth) over the long term.

In addition, advisors can utilize the more advanced financial planning software available today to create more detailed plans that show clients a clearer picture of their overall wealth. With some software options, these holistic plans can be viewed in the client portal, and clients can run scenarios themselves to see the potential impact specific strategies, allocations and investments would have not only on their portfolios, but on their wealth as a whole. During periods of market volatility, the ability to see that day-to-day market performance isn’t having a drastic effect on their overall financial picture can be calming for investors.

Our relationship with money can be a highly emotional one. During market downturns, anxiety and fear can wreak havoc on an investor’s emotional state — but by harnessing modern financial planning tools and software, advisors can help calm investors during market storms, and prevent them from making decisions they may regret when conditions normalize.

Helping investors keep their emotions in check is a meaningful way for advisors to foster personal connections at a time when (according to Capgemini’s World Wealth Report 2018) only 55.5% of high-net-worth investors feel they are strongly connected to their wealth managers. With global high-net-worth individual wealth on course to exceed $100 trillion by 2025, as per Capgemini analysis, advisors need to consider financial planning software and other innovative tools to help them navigate these types of situations and give themselves an edge over their competition.