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4 focuses for financial advisers in a bear market

Posted by on 08 April 2020
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Marketing probably seems like an unimportant focus for financial advisers right now - especially when there's talk of a bear market or potential recession. However,being creative and innovate with marketing strategy can benefit in the long run, especially when it comes to reinforcing client relationship. Johnny Sandquist, founder of Three Crowns Marketing gives a rundown on four marketing ideas that financial advisers can deploy in a bear market. 

If you approach marketing the right way, you really shouldn’t have to change much, if anything, when the market takes a dive.

What do I mean by the “right way”?

I mean you’re communicating consistently with both prospects and clients; creating content that is valuable on its own and not self-serving; and having a clear and effective purpose and goal for every communication you send.

If that’s not what your firm’s communications style looks like, then a bear market might be a real rough time—not even speaking about what's going on in client portfolios.

But here’s what we know. Life is cyclical. Bear markets are always going to be around—so you should always have a plan for how your firm is going to operate to not only get through, but excel, during them.

Not everyone has a finely-tuned approach to marketing, though, even in the best of times. So here are 4 recommendations for how to adjust your communications when the Dow turns into the D’oh. 

Focus on your clients first

A bear market is a great time for your clients to get spooked, lose confidence in you, go straight to cash and buy gold bricks with it, and run for the hills.

Okay, so maybe 'great' isn’t the word that best describes that situation.

But here’s the deal. You’ve got to take care of clients first and make sure they feel confident in their long-term plan so they stick around.

A company that loses customers and is forced to turn its attention to bringing on new clients to make up for that lost revenue is not a healthy company.

A healthy company instead has a consistent client base that doesn’t leave. Then from that foundation, you can go out and confidently add more clients because you have a solid base.

The best way to keep your clients is to serve them. Provide the most robust, caring, personal service that you can. That’s the client experience.

Here’s something I fully believe: A good experience in a bear market now can lead to more referrals from clients later

A client who remembers feeling that you communicated clearly and often and helped them avoid life-altering mistakes is someone who will easily be your advocate as the market morphs back into a bull.

Most advisory firms only think about sales and prospecting when they think about marketing, but marketing is in every part of your business—as Orion Advisor Solutions’ CMO, Kelly Waltrich, puts it—marketing owns voice, brand, audience...almost everything comes back to marketing communications today. It’s not just about providing resources for sales.

Communicate more often

The tendency in a bear market is to do the “reasonable” thing and pull back. Spend less on ads, create less content, become more conservative.

But, like Kylo Ren in The Last Jedi, you should want more instead.

"A Vanguard study showed that people who work with a good financial advisor can see a 3% increase in portfolio value each year versus investors who don’t work with an advisor."

According to some research, less than 45% of investors who work with an advisor say their advisor has talked to them about investing in a bear market.  If, like me, you are bad at math—that number is no bueno (not good).

What that number means is that while you may think you’re doing a good job of preparing clients and setting expectations, they might not be hearing what you’re saying.

Miscommunication typically happens because of two reasons:

  1. You aren’t clear about what you’re saying
  2. You don’t say what it often enough

Communicating more frequently is rarely a mistake. Communicating more often doesn’t mean increasing your communication about a market downturn, though. 

I’ve seen my share of advisors on Twitter sharing about how they don’t communicate with clients when the market dips because they don’t know if reaching out will cause more panic and concern than relief.

So if that’s a concern, just don’t make your outreach about the market. Do a check in, ask if there’s any personal news you should be aware of, or just make sure they’re aware of your most recent blog, podcast, or video.

If you’re communicating consistently already, this may not even be a step you need to take. If you’re sending something out every week, you’re likely pretty set.

But if you’re not, think about how you might increase your production. As clients see that you're taking a routine approach to everything happening, they’ll follow your lead too.

Focus on the benefits of good behavior

When you’re creating messaging, you want to focus on the change that can happen in a person’s life as a result of working with you. The outcomes, in other words.

And the outcome of working with an advisor becomes even more important when the stakes are higher.

There’s an increasing focus on how advisors help investors with their behaviors and that is all well and good—but that’s not where the message ends. That’s the beginning. Don’t just talk about how you can help people make better decisions. That’s fine. But what’s the outcome of a “better” decision?

Consumers are worried about how much money they’re going to lose. Working with an advisor can help them lose less. That’s a big advantage.

A Vanguard study showed that people who work with a good financial advisor can see a 3% increase in portfolio value each year versus investors who don’t work with an advisor.

You may not focus on returns, but you can focus on other positive life changes. A client may be more confident because they have you in their corner, or they may have more peace of mind because by working with you, they’ll have a full estate plan that they wouldn’t have created otherwise.

Peace of mind and confidence might be a little abstract, but you can ground them in a story that makes them real and personable. These are the types of benefits that should be a focus of your message.

Explain your process

Taking the time to identify your process, standardize it, and then explain it back to consumers is something I’m always working on with advisors. This primarily comes into focus for me when I’m writing a website. 

When someone goes to your page about your financial planning services, are they getting a couple blocks of text about how “holistic” and “comprehensive” you are, but not getting any details to go with that? The details make all the difference.

"According to some research, less than 45% of investors who work with an advisor say their advisor has talked to them about investing in a bear market."

Most firms offer incredibly similar services to one another—estate planning, tax planning, investment management, financial planning. One firm may have a narrower focus than another, but the top level “services” are alike.

So what’s different about how your firm does financial planning than how another firm does it?

The difference is your process. That is your value. That is what makes you special. 

Explain it and show people what they’re going to get when they work with you so they understand the experience you provide. (For a very in-depth and much more expensive look at this idea, check out Angie Herber’s article on Kitces.com about how to create a one-meeting sales process.)

I believe that identifying and documenting your process gives you an opportunity to create a branded experience as well. 

Once you have your planning process written out, for example, you can give it a name and present it almost as you would a product (e.g. this is our WealthBuilder system). 

Even if you’re a smaller firm, this gives you the appearance of a larger company because they often have more done in the way of branding and unique messaging. 

But beyond appearances, having your processes tight and complete will help you grow because you won’t ever be scrambling at any point during your client experience—you’ll be more efficient and capable because you’ll always know what’s coming next.

This article originally appeared on Johnny Sandquist's blog here. Discover how Johnny is still creating insightful writing in these strange times.

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