By Brendan Frazier, Chief Behavioral Officer at RFG Advisory
In times of market volatility, your role as a Financial Advisor is more crucial than ever. It’s not just about the numbers in your clients’ statements; it’s about their impact on their goals, dreams, and future. This is where you step in with a 4-step framework designed to confidently and comfortably guide your clients through some of the most pivotal conversations of their lives.
Inside the Mind of the Client
When the markets fluctuate, your clients’ fears and uncertainties often grow. It’s important to remember that these emotions stem from deeper anxieties. They’re not just concerned with their portfolios—they’re grappling with the unknowns of their future. Recognize this: by the time they reach out to you, their anxiety has likely reached a level they can no longer manage alone. They need an expert, and that expert is you.
Embracing the Opportunity
It’s easy to overlook the immense responsibility and privilege of being a trusted Advisor. Your clients are sharing something deeply personal—their financial security. Remind yourself that guiding them through these uncertain times is an obligation and a tremendous honor.
A Four-Step Conversation Framework: “S.A.F.E.”
1.Seek First to Understand
Start every conversation with empathy and curiosity. Ask open-ended questions to understand your client’s thoughts and feelings. When a client expresses concern—like feeling unsure about their investments—resist the urge to provide advice immediately. Instead, dig deeper.
For instance, if a client says, “I’m worried about the market and don’t think I’m invested correctly,” you might respond with:
- “I’d love to know—what specifically has you concerned?”
- “Can you tell me more about what you mean by ‘invested correctly’?”
By doing this, you’re ensuring your client feels understood before offering solutions.
2. Anchor to Their ‘Why’
Once you’ve identified their concerns, ground the conversation by revisiting the purpose behind their financial plan. Remind them of why they initially made certain investment decisions, whether to retire on their terms or fund their children’s education.
You could
You could say: “Looking at our previous conversations, we invested your money to help you retire on your timeline and to secure your children’s future. Has that changed?”
Reaffirming their goals helps clients focus on the long-term picture, even during short-term market turbulence.
3. Facts and Figures
At this stage, you’ve accomplished two key things:
- You’ve made your client feel heard.
- You’ve reminded them of their deeper financial goals.
Now, it’s time to provide logical, evidence-based reasons to stay on the course. Use your favorite charts, visuals, and data to highlight the benefits of long-term investing.
For example, you might explain: “Before we make any major changes, let’s consider the implications. On the one hand, selling now might bring temporary relief. But it could delay your retirement or require more aggressive savings later.”
While not as powerful as emotion, logic can still guide your clients when delivered at the right moment.
4. Ease Any Anxiety with Action
Telling clients to “stay the course” may sound passive, especially when they feel out of control. Instead, provide actionable steps that help them feel more in charge without making drastic decisions.
Consider offering these options:
- Assign homework on past market downturns.
- Encourage them to play devil’s advocate by developing three reasons to stay invested.
- Suggest focusing on controllable actions like rebalancing or tax-loss harvesting.
- Propose a temporary compromise, like selling a small portion of their investments and revisiting the plan in two weeks.
Giving clients small, actionable steps can alleviate anxiety and create distance between their emotions and life-changing financial decisions.
Conclusion
You play a critical role in guiding your clients through market volatility as their trusted Advisor. By helping them manage their emotions and behaviors, you’re not just protecting their investments, but aiming to support their financial goals and dreams.
Download RFG Advisory’s S.A.F.E Framework Here
Unlock More Behavioral Finance Insights
If you’re interested in learning more about the psychology behind financial decision-making, subscribe to our Wired Advisor newsletter for monthly insights from Brendan Frazier on client conversations. Subscribe now.
Why Behavioral Finance Matters
According to Vanguard, advisors add around 3% in value to a client’s portfolio annually, with half (1.5%) coming from behavioral coaching. This coaching, especially during turbulent times, often makes a difference in keeping clients on track.
About RFG Advisory
RFG Advisory is a fully supported platform designed to help Independent Advisors build their businesses without compromise. RFG empowers Advisors with a wide range of services, including transition and talent support, marketing and growth, back-office solutions, investment services, technology, IT support, and more. RFG’s award-winning, fully integrated platform enables Advisors to thrive while organically growing their businesses. Advisors at RFG are supported through a community dedicated to helping them increase their enterprise value and build something bigger than themselves.
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A 4-Step Framework to Comfortably Navigate Conversations During Times of Market Volatility
By Brendan Frazier, Chief Behavioral Officer at RFG Advisory
In times of market volatility, your role as a Financial Advisor is more crucial than ever. It’s not just about the numbers in your clients’ statements; it’s about their impact on their goals, dreams, and future. This is where you step in with a 4-step framework designed to confidently and comfortably guide your clients through some of the most pivotal conversations of their lives.
Inside the Mind of the Client
When the markets fluctuate, your clients’ fears and uncertainties often grow. It’s important to remember that these emotions stem from deeper anxieties. They’re not just concerned with their portfolios—they’re grappling with the unknowns of their future. Recognize this: by the time they reach out to you, their anxiety has likely reached a level they can no longer manage alone. They need an expert, and that expert is you.
Embracing the Opportunity
It’s easy to overlook the immense responsibility and privilege of being a trusted Advisor. Your clients are sharing something deeply personal—their financial security. Remind yourself that guiding them through these uncertain times is an obligation and a tremendous honor.
A Four-Step Conversation Framework: “S.A.F.E.”
1.Seek First to Understand
Start every conversation with empathy and curiosity. Ask open-ended questions to understand your client’s thoughts and feelings. When a client expresses concern—like feeling unsure about their investments—resist the urge to provide advice immediately. Instead, dig deeper.
For instance, if a client says, “I’m worried about the market and don’t think I’m invested correctly,” you might respond with:
By doing this, you’re ensuring your client feels understood before offering solutions.
2. Anchor to Their ‘Why’
Once you’ve identified their concerns, ground the conversation by revisiting the purpose behind their financial plan. Remind them of why they initially made certain investment decisions, whether to retire on their terms or fund their children’s education.
You could
You could say: “Looking at our previous conversations, we invested your money to help you retire on your timeline and to secure your children’s future. Has that changed?”
Reaffirming their goals helps clients focus on the long-term picture, even during short-term market turbulence.
3. Facts and Figures
At this stage, you’ve accomplished two key things:
Now, it’s time to provide logical, evidence-based reasons to stay on the course. Use your favorite charts, visuals, and data to highlight the benefits of long-term investing.
For example, you might explain: “Before we make any major changes, let’s consider the implications. On the one hand, selling now might bring temporary relief. But it could delay your retirement or require more aggressive savings later.”
While not as powerful as emotion, logic can still guide your clients when delivered at the right moment.
4. Ease Any Anxiety with Action
Telling clients to “stay the course” may sound passive, especially when they feel out of control. Instead, provide actionable steps that help them feel more in charge without making drastic decisions.
Consider offering these options:
Giving clients small, actionable steps can alleviate anxiety and create distance between their emotions and life-changing financial decisions.
Conclusion
You play a critical role in guiding your clients through market volatility as their trusted Advisor. By helping them manage their emotions and behaviors, you’re not just protecting their investments, but aiming to support their financial goals and dreams.
Download RFG Advisory’s S.A.F.E Framework Here
Unlock More Behavioral Finance Insights
If you’re interested in learning more about the psychology behind financial decision-making, subscribe to our Wired Advisor newsletter for monthly insights from Brendan Frazier on client conversations. Subscribe now.
Why Behavioral Finance Matters
According to Vanguard, advisors add around 3% in value to a client’s portfolio annually, with half (1.5%) coming from behavioral coaching. This coaching, especially during turbulent times, often makes a difference in keeping clients on track.
About RFG Advisory
RFG Advisory is a fully supported platform designed to help Independent Advisors build their businesses without compromise. RFG empowers Advisors with a wide range of services, including transition and talent support, marketing and growth, back-office solutions, investment services, technology, IT support, and more. RFG’s award-winning, fully integrated platform enables Advisors to thrive while organically growing their businesses. Advisors at RFG are supported through a community dedicated to helping them increase their enterprise value and build something bigger than themselves.
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