Clients and the markets: to call or not to call

It's a potential dilemma during this period of uncertainty but what should an advisor do and what are the risks?

Clients and the markets: to call or not to call
Bryce Sanders

You are a passenger on a commercial airliner. The plane encounters turbulence. Do you want to hear from the pilot? Of course. On the other hand, you’ve heard about Aesop’s Fable concerning “The Boy Who Cried Wolf”. If you do it too often, will people stop taking you seriously?

The case for calling your clients

Although it’s important to give both sides of an issue and let the reader decide, I’m going to say I am in favour of calling every client when the market encounters extreme volatility.  Here’s why:

It shows you are paying attention. You aren’t frozen with fear. You are thinking: “If roles were reversed, I would want to know someone was watching the store.”

It’s their money at risk.  You feel their pain. You aren’t a disinterested croupier at a casino. You realize sharp market drops are a real concern to them. They worry, “this time it’s different.”  TV news doesn’t help.

You have their interests at heart. You invest too, basically alongside them. You aren’t focusing on your own portfolio; you are putting your clients first.

They want an explanation. TV news can probably be summed up with the words: “This is really bad.” Clients feel they followed advice. They didn’t do anything wrong. Why is this happening to them?

Robo advisors don’t call. For the last couple of years, we’ve heard: “Robo advisors can do what you do at a fraction of the cost.” They can’t hand hold.

Inconsistent with your business model. You trimmed your clientele down to a smaller number of clients, so you could provide a deeper level of service.  You moved to managed money and fee-based pricing, so you were on the same side of the table, not looking for your next trade. Isn’t calling at a scary time in the market providing that higher level of service?

They will remember afterwards. A LinkedIn connection in Scotland mentioned: “It only takes a few minutes. The client will remember who called.”

The case for not calling

Some people feel advisors shouldn’t be reaching out.

Phones are obsolete. Clients communicate by text, e-mail or social media. Why bother?

If they are concerned, they will call me. They know I’m here. 

It will only panic clients. They might have concluded “Volatility is expected.”  If the advisor calls, maybe the client thinks “This time it’s different.”

Break in the routine. Your client is on a schedule of portfolio reviews. They are happy with that.  They have outsourced portfolio management. It’s one less thing to worry about. Now you are changing the routine.

Long-term thinking becomes short term. The client is focused on goals 10 or 20 years away. Now we are talking about how the market is moving this week or even today.

Setting expectations. The market declined sharply. You called. You are on the ball. The market declines again. You don’t call. Are you not on the ball this time?

What could possibly go wrong?

Let’s assume you agree the reasons for calling outweigh the reasons for not calling. You didn’t call.

The market keeps dropping. Now they call. They ask, “How come you haven’t called me?” You are on the defensive.

Statements arrive. They have a million-dollar portfolio. The DJIA is down 2% or 3% is abstract. So is the drop in points. The decline lasts a few days. Statements arrive. A 10% drop suddenly means they lost $ 100,000. They are upset. They were unprepared. They call you.

They question fees. They lost money. They assume you are clairvoyant. Their call starts with “What am I paying you for?’ You are on the defensive,

They feel neglected. They assume you are actively advising your best clients. That’s not them.

Missed opportunities. The market recovers. They wonder why no one suggested buying when prices were low.

Your competition. At a social event, someone asks: “When did you last hear from your advisor?”  They can’t remember.


I’m of the belief you should try to contact every client during times of extreme volatility.  Let's close with two analogies:

The frightened child. You are a parent. Your child had a bad dream. Maybe they are afraid of the dark. It’s human nature to comfort them.

The pressure cooker. Your grandparents had one. It speeded up cooking. It was the Cuisinart of the 1960’s!  But if you neglected it, letting the pressure build up, the lid might blow off, hitting the ceiling.

Bryce Sanders is president of Perceptive Business Solutions Inc. He provides HNW client acquisition training for the financial services industry. His book, "Capitvating the Wealthy Investor", can be found on Amazon.