To get clients to stick with their long-term investments you need to get inside their mindset and understand how they think and feel. If you know how your clients will react in the face of market volatility, you’ll be ideally placed to counter their concerns. If you understand what they need from you in terms of maintaining a long-term relationship, you will know which soft skills to focus on.
Here are a few things clients need to help them persevere with their long-term investments.
#1. Clients need to trust you if they’re going to stick to the plan
Establishing trust is essential if you are going to gain new clients – but you need to develop an even deeper level of trust if you are to get them to stay the course. When someone decides you are the right advisor for them, they’ve indicated that you demonstrate characteristics they like. They feel comfortable in your company.
As time goes on they will expect to receive a superior level of personalized service – or they may waver when it comes to sticking to their investment plan.
In order to trust you they need to come to know you are reliable. They need to feel you are available for them and that their needs are always on your mind. If they have questions they want them to be answered quickly.
To keep their trust, they also require you to run a stable business. Your clients need to know what would happen to their assets should anything happen to you. And they are more likely to put their faith in you and feel positive about sticking with you long-term if you have a succession plan.
#2. Clients must understand volatility in order to stick to the plan
Clients tend to have an over-anxious approach to market volatility. Even when the rational part of the brain understands that market volatility is inevitable, the emotional part doesn’t always come to the same conclusion. When clients see the fluctuations, they find it hard to ignore the feeling in the pit of their stomach – and they find it difficult to stop themselves checking and re-checking their investments incessantly.
Recent research by behavioral psychologists indicate that people routinely ignore statistical probabilities and misjudge the odds of success or failure. Because of this clients need immediate reassurance when the markets are volatile. It’s your job to articulate the nature of investing in a way that’s understood.
Clients need you to display your knowledge without being technical and there are various ways to do this, especially using analogies and stories. If you fail to check your clients’ instincts and they end up making bad decisions, you’ll be doing them a disservice.
#3. Clients need you to demonstrate strong leadership skills
If clients are to remain committed to pursuing their investment goals, they need their financial advisor to demonstrate trustworthy leadership. They need their advisor to lead by example and be passionate and positive. For clients to stay focused on the long term they need someone who will keep their morale high and focus on solutions rather than problems.
By developing a client-first mentality you will be able to help your clients stay with their investment plan. When you understand their needs you can focus on building up a strong relationship that will stand the test of time. It’s the strength of your relationship that will determine how they will react in poor market conditions.
If your clients feel they can trust that you will always do the right things by them – they will follow your lead, accept your confidence in the stock market and stay the course.
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