The Best Defense Is A Good Offense: How volatile times can help propel your business

Imagine this: your client opens their quarterly statement, and it’s all green arrows. Their 401(k) is humming. Their investment accounts look like they’ve been on a rocket ship. Then your client sends you a quick email saying, “Thanks again—great work.”

It feels terrific to help clients achieve their goals. But here’s some radical candor—during a bull market, it’s not exactly the most difficult time to look like a genius. As the old saying goes, “Never confuse brains and a bull market.” Even average performance can feel exceptional in your client’s eyes when everything goes up.

Now, fast forward. That same client logs into their accounts this week, and everything's dipped. Even if their portfolio is holding up better than most—say, down 10% while the market is off 20%—they’re not calling to thank you. They’re calling because they’re nervous, frustrated… or both. Or maybe, they’re not calling….

Here’s the truth: clients compare returns when the market is up. But when the market is down? Regardless of how well you’ve navigated the storm, many clients focus on absolute losses. In moments like these, how you present yourself makes all the difference.

With the S&P 500® currently down more than 17% from its peak reached just a month and a half ago, combined with the growing whispers of recession, now is the time for your firm to prove its worth by reinforcing the value of planning while attracting new clients to grow your business. Yes, I understand this may not seem like the ideal moment to prospect for new clients and assets, but that is precisely what it is. It’s only when the tide goes out that clients can truly appreciate all the capabilities and efforts that go on beneath the surface of your business. After more than thirty years of working with advisors, I've observed that the best in the business consistently attract new relationships when the future becomes uncertain. Just look at the growth rates of the top-ranked advisors following every market downturn; the eighteen months after often see an expansion in the growth of new clients.

Matt Barthel, Executive Editor at Dow Jones Wealth and Asset Management Group and Barron’s Magazine, shared some insightful data with me: In the months and years after COVID, the nation’s top wealth management teams grew at an astonishing pace.

As of December 31, 2019, the Top 50 Private Wealth Teams (FINRA registered; focused on individuals and families, not institutions) had a total of $328.8 billion in AUM, for an average of $6.6 billion per team. On December 31, 2023, that same cohort had grown AUM by just under 150% to $817.9 billion, or $16.4 billion per team.

The teams also added staff aggressively, growing from an average of 14 team members to 31.

So, let’s explore a few ways to strengthen your existing relationships and create an effective game plan to attract new clients.

Identify at-risk clients

First, let’s begin by evaluating which clients are genuinely at risk, either because they do not recognize the value of your planning services, lack confidence in their plan, or struggle to understand what you actually do for them. A brief 5-minute client attitude assessment can serve as a useful starting point. Take a moment to evaluate each client on the following metrics using a 5-point scale (1 = not at all; 5 = very much):

• Does this client understand and value the financial plan we've co-created, feel confident about it, and view it as a dynamic, evolving tool rather than merely a static document?
• If someone asked them what makes our firm different, would they be able to confidently and accurately describe our unique value and approach?
• Have they ever proactively shared a personal story, life transition, or aspiration that goes beyond the numbers—and do I feel they trust our team to help guide them through it?
• Does this client see us as partners in shaping their family’s legacy—not just as investment managers, but as guides helping them prepare their next generation and heirs to carry forward their values, wealth, and intentions with clarity and purpose?
• In the past year, have they introduced our team to someone in their circle or expressed that they would feel proud or comfortable doing so?

Any client who scores 15 or lower should be considered ‘questionable’ and ‘at risk.’ Develop a strategy to enhance their understanding of what you do and how it benefits their lives. Take time to reflect on each client and household relationship, identifying the best outcomes you hope to achieve moving forward. Specify the actions needed to reach those outcomes and designate the team member responsible for each action.

And don’t be afraid to open a Pandora’s Box. Especially during volatile times, you need to pay closer attention to managing client emotions and cognitive biases – factors that not only impair their ability to remain emotionally detached from their money and investments, but can also derail even the most carefully crafted financial plans.

In September 2008, as the market was collapsing, we developed a tool called The At-Risk Client Assessment™ to help you categorize your clients into four distinct archetypes:

1. At-Risk Clients – these are clients who are clearly upset; they may have even voiced their disappointment, expressing dissatisfaction and mentioning the potential of moving their relationship to another advisor. They might be unhappy with their financial plan, investment portfolio, or the performance of their life insurance product. It’s possible that you’ve experienced significant turnover on your team, which has left them frustrated by the constant change in staff they have had to deal with and adjust to. They likely feel shuffled around and view themselves as orphan accounts.
2. Questionable Clients – these clients are suddenly less responsive than they once were. There may have been a wrinkle or bump in the relationship where someone on the team dropped the ball, but the issue was ultimately resolved. You just aren’t quite sure where you stand or if there’s any lingering resentment. If you suggest involving their spouse or kids, they might balk at the request. In all likelihood, you’re renting the relationship until you receive an ACAT transfer request because the client lacked the courage to vocalize their dissatisfaction and chose to simply move the account instead.
3. Engaged Clients – hopefully, the lion’s share of your clients; they attend meetings filled with enthusiasm and questions; they’ve been with you for a long time and are likely to stay for generations due to family engagement; perhaps they make a referral occasionally, but not as often or automatically as your advocates; they are stable, dependable, and profitable clients that you enjoy working with; your ideal firm would have 100 more just like them.
4. Client advocates are a small subset of clients who consistently make three to four or more introductions each year. Both they and their families are fully engaged with your team and actively advocate for you within the community whenever opportunities arise.

Reassurance drives referrals

Why is it that when the going gets tough, some advisors focus only on potential pitfalls and withdraw into their protective shells, while others view the uncertainty as an incredible new business opportunity? Prospects who are currently self-directed may be reconsidering their need for guidance. Others who are working with your competitors might become increasingly frustrated by a lack of communication from their advisors.

The truth is, the best in the business always generate more referrals and attract new client accounts during volatile times. Instead of hiding under their desks, they increase their communication and outreach – through text, phone, and/or Zoom- to help reassure and boost the confidence of every client by highlighting the progress and success of their long-term financial plan.

Considering the current volatility and rising recession fears, now is an ideal time to critically examine your client communication procedures and engagement processes for meaningful ways to better connect with and involve clients. Equally important, leverage this increased engagement to encourage clients to refer friends, family, and coworkers who may be struggling in this market environment and who would appreciate the insights, guidance, and planning you can provide.

However, never forget this essential truth: the time and effort it takes to salvage an existing relationship is far less than the time, effort, and cost required to establish a completely new one.

Regardless of where the market moves from here, now is the time to lead—encouraging your team to remain future-focused, connect with clients purposefully, and implement thoughtful updates that reinforce client confidence. Remember to explore ways to expand your impact and grow your client roster.

As you care for others, remember to care for yourself. “When the oxygen mask comes down, put it on yourself first:” revisit your financial plan, reflect on your confidence in the future, and engage in meaningful conversations with your family and heirs. Strong leadership starts with you.

Coaching Questions from this article:

1. What strategic actions can you take to engage at-risk and questionable clients more proactively and develop them into reassured, referring clients?
2. When conversing with clients, how much time do you spend discussing the services you provide instead of the challenges you can help them overcome? What steps can you take to shift the conversation towards adding more value?
3. How will you invite your most engaged clients and advocates to partner with your team in introducing their networks that may feel anxious or concerned about the markets?
4. What is your client acquisition strategy to grow your roster of new clients and impact during uncertain times?

About ClientWise LLC

ClientWise is the premier business and executive coaching firm working exclusively with financial professionals. We specialize in helping clients optimize growth and maximize revenue by engaging as a knowledgeable partner in accomplishing specific and significant business results. Our full-service coaching program empowers financial advisors, wholesalers, managers and executives to enhance performance through customized, action-oriented solutions based on each client’s specific vision and situation.

Our certified coaches are members of the International Coach Federation (ICF). They adhere to ICF’s strict code of ethics and have the experience and insight to work with you on the unique challenges and opportunities you face each day.

Drawing from an in-depth knowledge of the financial industry, ClientWise’s mission is to professionally develop industry leaders and consistently raise the bar for industry service, commitment and integrity. Simply put, our singular focus is to help you get clear, get focused, and get results.