How to Turn Market Volatility into a Client Acquisition and Retention Advantage
Volatile markets tend to put investors and advisors on edge, naturally. But here’s a bit of good news: Market downturns and economic uncertainty can also be your secret weapon to achieving substantial firm growth and instilling greater trust with your clients.
Nitrogen’s Success Engagement Manager, Chris Quandt, and VP of Risk and Analytics, Shari Hensrud, recently participated in a webinar hosted by WealthManagement.com, where they and other panelists explored the intriguing intersection between market uncertainty and advisor growth opportunities.
Moderated by Shannon Rosic of Informa Connect, Nitrogen’s Chris and Shari were joined by other esteemed industry professionals, including Bill Simonet, CFP® of Simonet Financial Group, and Domenick D’Andrea, AIF®, CRC®, CPFA® of DanDarah Wealth Management.
Below, we’re recapping the insights and strategies discussed during this webinar, particularly the actions that you can take to attract and retain clients during turbulent times.
Takeaway #1: Don’t Downplay Investor Emotions
Early in the webinar, panelists were asked to describe today’s market environment in a sentence. Hensrud compared it to a child having a tantrum, saying, “You know it’ll pass, but you still have to manage it.”
D’Andrea pointed out that while this cycle feels loud, the markets have endured worse, and we’re already seeing signs of recovery.
Overall, the panelists agreed that volatility is nothing new, as the markets are cyclical in nature. Hensrud did emphasize, however, that the cause of the volatility changes over time and, more importantly, how clients perceive and react to it can change as well. Today, investor fears may be heightened and amplified by round-the-clock news cycles and political polarization, she explained.
Your emotional intelligence and ability to connect with clients on a personal, emotional level matter just as much as your investment strategy. “The job of the advisor is to help clients understand the source of their fear,” Hensrud said. Once they’re able to understand why they feel the way they do, it becomes easier for advisors to provide reassurance—whether that’s by taking a closer look at their risk profile, running scenarios, or reaffirming their progress.
Takeaway #2: Address Decision Paralysis
Investors are being hit by a constant barrage of information, whether they actively seek it out or not. With this inundation of information also comes a greater sense of opinion, though those opinions aren’t always rooted in historical or relevant data.
Simonet explained how clients and investors are often building their own “information silos,” clarifying that they’re not just listening to advisors when it comes to financial and investment advice. They’re finding sources (sometimes biased ones) that reinforce their own beliefs, which can make an advisor’s job of providing unbiased, educated guidance much more challenging.
Panelists agreed that the sheer volume of data clients consume can lead to decision paralysis. “When clients come and they have data, notice I said data, not knowledge,” Simonet said, “it’s our responsibility to help them identify what’s actually relevant to their portfolio long term.”
They also agreed on the importance of reconnecting clients with their original plan. Showing concerned investors the long-term trajectory of their decisions today is an effective way to build their financial knowledge and increase confidence, even if markets feel choppy and uncertain in the short term.
Takeaway #3: Don’t Underestimate the Power of Proactive Communication
When asked what they wish they’d known during their first market downturns as advisors, all panelists shared the same advice: be proactive.
Simonet shared his experience joining the financial services industry in 2008, at the height of the global financial crisis: “Being young, being new to the industry, and then going through another market downturn like we did meant that clients were skeptical. They were wary about investing, especially if you had young investors or you were a young advisor. The most important thing I learned during that time was resilience and communication.”
Here’s his advice: “If you’re new to this and you have not gone through a market downturn, the most important thing you can possibly do is get in front of your clients. Do something as simple as calling them on the phone and asking what their concerns are.”
D’Andrea emphasized the value of leveraging the right tools in your tech stack to execute clear processes and provide clients with proactive communication. He cited tools like Nitrogen’s risk assessment and Investment Policy Statements (IPS) as effective ways to set expectations with clients well in advance of market downturns.
When clients understand their personalized risk range ahead of time and know their portfolio is built around those boundaries, they tend to stay more grounded when markets get rocky.
Takeaway #4: Know Your Timing
While proactive communication is key, the panelists warned that too much communication, especially when it’s sporadic or unstructured, could have the opposite effect.
“Sudden jolts or changes in the market are your cue to communicate,” said Simonet. He warned against over-communication with a quick comparison: “If a teacher called every week and started the conversation with ‘don’t worry, everything’s fine,’ I would immediately start to worry and think something is wrong.”
D’Andrea agreed, adding that clients sometimes need to “fall down and realize they’re okay,” much like a child learning to play sports. Constant hand-holding from advisors can backfire. Instead, advisors should try to show restraint and be strategic in how and when they communicate with clients.
For those “in between” moments, however, you can always work to equip your clients with the tools, resources, or financial knowledge they need to regain their own footing.
Make the Most of Market Volatility with Nitrogen
When advisors act strategically during a downturn, they can use these moments to actually deepen relationships with existing clients, demonstrate immense value, and connect with prospective investors. And with Nitrogen powering their client engagement and communication initiatives, they have the tools to back that guidance up with real, visual data and dynamic planning support.
Ready to turn market volatility into your firm’s growth advantage? Schedule a demo or take an interactive tour to see how Nitrogen empowers financial professionals to lead with confidence, no matter the market’s movements.