Tech can ease the pain of client conversations in a down market

No one wants to have difficult “money” conversations. They’re uncomfortable and often raise unresolved questions that are easier to avoid than try to answer. That’s because the issues are complex, often involving countless considerations and variables that result in important decisions being made through ad hoc trial and error.

Today’s market downturn is a perfect, if scary, example. As CNBC noted, “Stocks have been a horror show” with the S&P 500 down 14% from Jan. 3 to May 2, and the Nasdaq having lost 23% of its value since mid-November. It’s no surprise that people are worried, and wondering: Do I stay in the market and take my chances? Do I pull out now and cut my losses? What if I do one, and realize later I should have done the other?

These questions are serious and stressful, and there is no single perfect answer. As a financial planner, it can take years for you to gain the skills to help clients navigate these situations with confidence. They require:

• Patience - To give people the opportunity to talk and work thru their feelings.
• Empathy - To demonstrate you hear and understand where they’re coming from.
• Experience - To leverage years of accrued knowledge and expertise.
• Resources - To help them achieve their goals.
• Commitment - To get them through the difficult times and out the other side.

The playwright Anton Chekov once said, “Knowledge is of no value unless you put it into practice.” The more perspective you can provide as a financial advisor, the better you can help clients understand and weigh their options — so the question becomes less about whether to panic sell a crashing stock and more about how to set goals, develop strategies, visualize outcomes, and anticipate and adapt to exceptions.

In today’s world of digital financial services, financial planning can no longer be a set-it-and-forget-it proposition. With the 24/7 nature of payments, credit, savings, remittances and insurance, just about anyone can make a decision at any time that can affect just about everything. It takes agile planning and technology to keep up with this new generation of challenges.

Forbes contributor Steven Chen believes digital financial planning is a force multiplier that allows advisors to serve more people in a more insightful way, acknowledging “human advisors can be amazing and provide great advice, but the model is difficult to scale, and as such, most people don’t have easy access to the advice they need.” He goes on to underscore the role of emotion and engagement in the process, noting that “people need a safe and approachable way to get started — one free of judgment. It starts with technology and a community that collaborates. The goal is to help people go from a fear and scarcity mindset to one of abundance and purpose.”

That’s where the right kind of technology can help demystify the financial planning process, providing access to information that helps clients feel more educated and empowered — both in good times and in bad. This may include:

• Customization that reflects clients’ unique situations.
• Flexibility to illustrate real-time shifting market dynamics.
• Insights derived across numerous disparate data sources.
• Anytime, anywhere access that supports advisor-client collaboration.
• Advanced data security, protection and compliance standards and practices.

Difficult conversations don’t have to derail plans or upend relationships. They just take a team and technology with the right “temperament” to stay calm and carry on.

 

David Kaufman is CEO of Voyant. He may be contacted at [email protected].

 

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