The trade talks with China are receiving an enormous amount of media attention and the stock market also seems to be reacting to the recent threats between President Trump and China. While the outcome remains uncertain, investors want to know what their financial advisor is thinking about during these turbulent markets. And it’s important that you reach out to them NOW.
In recent research Spectrem conducted with wealthy investors, more than half of investors indicated they are “Concerned” or “Very Concerned” about China trade relations. Only 18% indicated that they are “Not at all concerned”. Wealthier investors are more concerned than less wealthy investors with 89% of investors with more than $5 million of net worth indicating that they are Concerned/Very Concerned.
Yet despite the fact that investors are concerned about China and trade relations, more than half of investors (56%) have had no discussion at all regarding this issue with their advisor. Only 9% have had a great deal of discussion regarding this topic with their advisor and 35% have had slight discussion regarding this topic. Additionally, only 10% of investors believe they have a strategy should their trade talks fall through. Notably, advisors are more likely to have discussed these issues with their wealthiest clients, however, 42% of those with more than $5 million of net worth have not had any discussion of this issue with their advisor.
Many advisors will say that their investors don’t want to be bothered with discussing every news item and their investments. While that may be true for the daily ups and downs of the market, investors in Spectrem’s recent survey data are more concerned than average regarding the recent market volatility. The ongoing discussion in the mainstream media of “recession” and the China trade talks have lowered investor confidence.
While advisors may not have a magic ball to know the outcome of what will happen in the next few months….or even in the next 12 months, this is a good time to reach out to your clients in some manner. Even an email letting them know that now is the time to remember “investing is for the long term” or any type of advice you may want to share may be enough to ease their fears and let them know you are thinking about their best interests.
When we ask investors what impacts their overall satisfaction with their advisor, one of the key components is feeling that their advisor is being proactive. Now is the time for you to let your clients know your thoughts and to offer them whatever guidance you deem is appropriate.
This fall and throughout the election cycle your clients will need to hear from you more frequently. Don’t take their loyalty for granted.