When Advisors Should Make the Call ... to Call Their Clients

The stock market is reactionary rather than predictive. It reacts to every news item that might have some hand in economic matters, whether the news refers to global markets, American consumers or even individual companies. Nothing, it seems, gets past stock market observers, who promote buying or selling based on even the hint of significant events happening.The question that is constantly discussed is whether financial advisors need to contact their investor clients with urgency when the stock market reacts to economic news.Obviously, advisors cannot contact every client every time corporate news breaks, since there is significant news daily and advisors can have hundreds of clients. Equally as obvious is the fact that there are clients who want to be updated regularly on how economic events impact portfolio performance, and there are clients who do not require a daily update based on what is being reported on CNBC or Fox Business.On a monthly basis, Spectrem surveys investors about their attitudes and behaviors regarding financial and investment decisions . It also asks a series of questions related to current events, and these Hot Topics often cover current news events impacting the American economy. Often, investors are asked whether their advisor contacted them to discuss those current events, or whether they want their advisor to contact them regarding such events that have obvious impact on the stock market and large-picture investing strategies. Portfolio Retired Investors

Let’s look at a few examples:

GLOBAL MATTERS– Since the day Donald Trump became President of the United States, there has been almost daily news about the business relationship between the United States and China. It’s almost impossible to keep track of where the relationship stands on a daily basis, but the stock market moves with every announcement or suggestion that the relationship is better or worse, making it imperative that advisors know what is going on.Some investors consider it imperative that their advisor keep them apprised of the current trade relationship between the U.S. and China. When the word “tariff’’ again was on the lips of business experts worldwide, Spectrem asked investors if they had heard from their advisor to discuss how the relationship was impacting their portfolio, and only 20 percent said they had received some form of communication from their advisor.This one is a tough call. Since the matter does seem to require daily updates, are there clients you have who want a daily phone call or email invitation to discuss the matter? Or is this the sort of global overarching topic that might require that all of your clients pull back from investing in products, either foreign or domestic, which are impacted by the ongoing negotiations? INDUSTRY NEWS– There are occasions when an entire industry comes under attack. Tobacco has been an industry with a bad reputation for decades now, but the perception of tobacco products took a turn for the worse (is that is even possible) when kids and young adults started dying as a result of their addiction to vaping products.In light of those news events, investors were asked whether they want their financial advisor to keep them apprised if an industry they are invested in faces widespread criticism on a national scale. Three-quarters of all investors agreed they wanted to be made aware of the news related to industry investments, and that percentage grew to 81 percent of Senior Corporate Executives and Educators, and 92 percent of Business Owners, whose interest in industry reputations might seem obvious.

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