Things Change at the Speed of Light… Pick up The Phone Now to Protect Relationships!

Executive summary

The article below emphasizes the critical need for financial advisors to maintain clear and open communication with clients during market volatility. In addition, communication help mitigate concerns, prevent client attrition, and secure loyalty. It highlights that consistent outreach during crises significantly increases the likelihood of retaining client relationships across generations. Studies indicate that clients who do not hear from their advisors during difficult times are up to 66% more likely to switch service providers. This document advises financial professionals to engage clients proactively, particularly future decision-makers, and suggests that personal communication, such as phone calls, is more effective than impersonal methods like letters and mass distributed emails.

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We all know that currently there is a lot going on in the financial markets—so much turmoil and uncertainty, which can be unsettling to many people. While there are many things we cannot control, I am ready to provide a good piece of advice and suggest some actions you can take NOW to influence the outcome or maybe even turn the odds in your favor.

It is time to emphasize the importance of effective communication, especially during market volatility. As dedicated financial professionals, we need to ensure that we do not drive clients away or give them a reason to switch financial advisors and wealth management firms.

In turbulent times, elite financial advisors stand out by having a disciplined communication strategy for all client relationships and direct, face-to-face touchpoints for their top "A" family relationships. It is crucial to reach out NOW -- not just to the matriarch and patriarch but also to future decision-makers – Gen Z and subsequent generations. It goes without saying that it should go far beyond a simple “Hi. How are you doing?” call. Your conversation should touch on the impact of tariffs and inflation on the economy. In addition, you should spend sufficient amount of time explaining how these factors can influence the long-term investment strategies you are delivering. In other words, your job is to bring everyone up-to-speed and ensure that the collective game plan you designed is working as intended.

Statistics and studies from firms like Fidelity, T. Rowe Price, and Morgan Stanley show that clients deeply appreciate hearing from their financial advisors during crises. Whether it was the crash of 1987, the real estate implosion of the late '90s and early 2000s, the dot-com bubble burst, or the Great Recession from 2007 to 2009, clients’ survey comments consistently confirm two key points:

• First, regardless of investment performance, financial advisor teams that consistently reach out to their clients have a higher likelihood of retaining those relationships for multiple generations.
• Secondly, clients who did not hear directly from their advisors are 50 to 66% [1] more likely to switch advisors once the crisis has passed.

To illustrate this, let me share a personal example. After the Great Recession from 2007 to 2012, in my capacity as senior investment officer, I gathered several senior portfolio managers from different states for a thought-partnering/ learning session. When asked how they communicated with clients during these various capital market meltdowns, one senior portfolio manager confidently declared, "We communicated with them all!" I followed up with, "Great, tell me what you did; maybe we can learn something from that?" He replied, "We sent them all a letter."

Dick Gregory once said, "There are three kinds of people: those who make things happen, those who watch things happen, and those who don't know anything happened."[2] This is a powerful reminder to be proactive and engaged. In this day and age, it is absolutely crucial that you make things happen and pick up the phone. You will be glad you did, and so will your best and most important clients and prospects. At first glance, it doesn’t seem like a big deal, but it can make all the difference in the world and help you boost credibility.

Let us continue to build strong, lasting relationships with our clients through relationship ownership, initiative-taking and the meaningful communication outlined above. And as always, we here at Cannon Financial Institute are available to help you in any way we can. Looking forward to our call!

Things change quickly…Pick up the phone today. Reaching out to clients NOW can make a world of difference in securing long-term success.

[1] fidelity investments

[2] Dick Gregory www.biography.com/actors/dick-gregory