Integrated Partners Executives Describe How to Guide Clients and Manage Transitions During Stressful Markets
When you ask a room of financial advisors if they experience work stress, 99% will raise their hands and the other 1% didn’t hear the question. Anyone with a job – even a job they love – feels stress at work.
Let’s take that work stress and drop it in the middle of turbulent markets threatening corrections, bears and other unpleasantries – clients call unceasingly, numbers shrink and tension fills the atmosphere.
In an environment like today’s, accumulated stressors combine with the moment’s pressures to nudge some advisors over the edge – leaving their current firm to seek new employment – but a hasty move in the heat of the moment can worsen an advisor’s life.
To understand how financial advisors are guiding clients through stress and managing their own stress, as well as how they might avoid making rash and destructive decisions, we sat down with two experts at Integrated Partners, Raymond Lucas, Jr., CFP, Senior Vice President of Financial Planning about client reactions and counseling during market turbulence, and Rob Sandrew, Chief Growth Officer, about advisor moves in this high-stress environment.
They are each well-positioned to speak to these trends, given the robust growth of Integrated Partners over the past few years to reach more than $12 billion in assets, 160 advisors and 140 CPAs currently.
WSR: With the stock market losing value, bonds rates up and volatility making headlines, what are you hearing from FAs in the field about current client reactions, both in verbally expressed emotions and plans as well as actual investment actions taken in response to these developments?
Lucas: We have entered a new year hand-in-hand with increased market volatility facing our clients and our advisors.
As with most times of heightened volatility, investor behavior becomes the driving factor to address. Even after historical returns in both the equity and bond markets over the last 10 years, maintaining a rational, non-emotional approach to investing can sometimes be a challenge.
Regarding our advisors and their reactions to client feedback, I’m extremely comfortable saying that we have been preparing our advisors, and in turn their clients, for the inevitability of the market conditions we are currently experiencing.
We have long believed in a time-segmented approach to investing. We invest our clients’ money based on how long their money is available to work on their behalf. Money needed in the near-term is positioned conservatively, and our clients shouldn’t need access to the more volatile asset classes for years to come. Time in the market is much more important than timing the market.
I am fortunate to say that our advisors are having good conversations with their clients. Even though some clients may exhibit nervousness, the best thing we can do is reinforce our approach and remind our clients that the investments that exhibit greater volatility are also the investments that need the most time in the market to achieve their objectives. The last thing you want to do is rob those investments of the time they need to work on your behalf.
WSR: During market volatility and the uncertainty that we’re seeing at present, do you tend to see more advisors looking to make a transition?
Sandrew: Yes, any time that the market is going haywire it exacerbates whatever frustrations an advisor might have at their current firm. Given what we all know will be coming at some point from the Fed and what is happening in the markets, this will be a time of increased advisor turnover.
If advisors feel that now is the time to make a change in their career, I would counsel them not to do so hastily just because of the turmoil around them. It may be particularly tempting but you can’t forsake your due diligence and the dedicated steps that ensure you select the right firm.
I also suggest that advisors approach this transition rationally rather than emotionally to ensure that they avoid burning bridges as our reputations are incredibly important and one heat-of-the-moment decision can be hard to undo. Now is the time to lean on the new firm’s transition process and stay focused – trust their track record and experience.
WSR: What are the key things advisors making a transition might not be doing but would really benefit from?
Sandrew: Advisors making a transition should not fear asking too many questions or being too bold in their line of questioning. It’s easy to fall prey to our parents or others telling us to act polite, but if someone is about to join a firm where the CEO plans to retire, that person needs to know the succession plan before they leave their current firm.
Ask current advisors at your favorite firm what they wish they had done differently when making their move or if they have any regrets. Now’s the time – you won’t get another chance.
Another thing advisors need to consider is the financial impact of the different offers they get – which are not all equal. Transition assistance packages are nice and may come in handy depending on an advisor’s life circumstances, but in the long term an advisor’s assets could double or triple if they align with a firm that knows how to grow them properly. Some advisors are jumping over quarters to get to nickels because they get excited about short-term rewards.
Julius Buchanan, Senior Contributing Editor at Wealth Solutions Report, can be reached at firstname.lastname@example.org