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Financial Growth Concept
June 4, 2020

Financial Professionals: How to Add Value in an Uncertain Market

Financial Growth Concept


One of my favorite TV programs back in the day was Columbo, the crime series starring Peter Falk as a homicide detective with the Los Angeles police department. Columbo was a shrewd blue-collar guy with a rumpled beige raincoat, low key demeanor, cigar, and a famous catchphrase: “Just one more thing.”

I loved the moment in every show when Falk would walk away from a suspect, then turn to ask one last question that would unlock the whole case. In my career as a financial advisor, I often thought of that: how asking one or two more questions would bring some new information to light that would either help the client or teach me something new.

Pre-pandemic, a lot of us depended on this kind of informal learning to share ideas and improve. Often I would run into someone—either in my office or at a client’s—and these casual interactions in the hallways were a great time to ask a question and learn something on the fly. Unfortunately, this doesn’t occur as naturally on Zoom. Without the chance for in-person conversations, our interactions have to be scheduled down to the minute.

That’s one of many adjustments we’ve had to make in our selling approach. In my recent webinar with Mark Magnacca, president and co-founder of Allego, we discussed how to reassure client-facing teams during turbulent times. (You can read the recap or watch the recording on demand). Now, just a few weeks later, we’re continuing to witness upheaval across the country.

3 Critical Steps for Financial Professionals to Add Value

These are unprecedented times, but financial services firms have seen other moments of extreme uncertainty. We have hopes that the worst of the downturn is over. In the meantime, how can you bring value during this on-going volatility? One way is by giving client-facing teams a foundation of learning, content and communication.

Step 1: Learning

According to a recent study, the average worker spends 21 hours a year on formal courses and training, but 484 hours on informal learning. In other words, 96% of job training occurs informally. The sheer number of hours that employees naturally devote to informal learning is a compelling reason why your firm should support it.

As an advisor or wholesaler, part of your job is being a student of human behavior. You need to channel your inner psychologist to understand what people are feeling and how they are reacting. The markets are an amalgamation of all the feelings, thoughts, and facts at the time. Prices move accordingly. If people are feeling optimistic, prices go up. If scared, prices head down.

During the pandemic, a lot of firms are reaching out to clients, either through advisors or directly via conference calls with chief strategists and other internal experts. By way of example, I have recently been invited and listened to presentations from JP Morgan, Ameriprise, and Morgan Stanley, providing insight and expertise to assist clients in weathering this storm.

These firms have two goals. First, they’re supporting advisors’ efforts by helping to keep people informed. Second, they’re building brand relevance and awareness. The overarching message is, “We have smart people who can help you navigate through these markets. Ask yourself if you have a plan. If you do, are you adhering to it or does it need to change? If you don’t have a plan, get one quickly.”

The takeaway for financial professionals is that information and knowledge are valuable currencies, especially during times of uncertainty; therefore, you should be in constant learning mode. The message for firms is that, despite the challenges of today’s marketplace, you must provide opportunities for your team to learn, obtain new knowledge and pass it on.

Step 2: Content

Advisors are faced with two types of clients today. Some are willing to ride out this uncertainty. Others are questioning their investment strategy, wondering if they should keep their current positions or even continue to contribute to their 401k in the same manner.

The answer depends on when they need the money. The market downturn has made it easier to acquire more shares at lesser prices-—using near-term capital for long-term prospects. The key to good investing is to be diversified, have liquidity and not to deploy “scared money.”

Scared money refers to one-time infusions from the sale of a house, a bonus at work or assets, which might be earmarked for a specific purpose with a specific near term end-date. If you know you will need that money in a year, you won’t make decisions that are as good as if you didn’t feel the clock ticking. Liquidity is an asset class that a good advisor will consider for their clients against the backdrop of a goal-based investing plan.

Providing meaningful content gives advisors an opportunity to communicate with their clients. People want relevant information so they can make better decisions, but there’s a fine line between being inundated and having enough to act wisely. Your firm should provide advisors with content that allows them to be more expedient and knowledgeable in their communications.

Step 3: Communication

Clear communication is more important than ever. Firms need to equip client-facing teams with clear information on a platform that’s accessible across locations and time zones.

For financial professionals to engage in meaningful client conversations, they need the confidence—and competence—to present plans, products and positioning effortlessly. Your high value client-facing team members need to acquire new knowledge, commit it to memory, and be able to grab high-impact refreshers when they need it.

When I was a young advisor, I struggled with having a systematic approach to communicating with my clients. It was episodic at best, trite at worst. One of my mentors suggested that the best perspective on client conversations was to have purposeful and meaningful engagement to show that you care. “If you’re regularly bringing them something of value, they appreciate the interaction. After all, that’s what they’re paying you for.”

Clients are feeling anxious. They’re feeling personal and professional concerns. Communication today can be as simple as keeping in touch to check in on them personally and keep them informed. All you need to ask is, “What can we do for you?”

Adding Value During Uncertain Times

Learning, content, and communication create confidence among client-facing teams, which allows them to add value to every client interaction. Is your firm using all the latest tools? Traditional approaches to capturing and sharing information may not be agile or flexible enough for today’s ever-changing world. Make sure you’re up-to-date so you can give your team the best chance to overcome challenges and add value.

Learn More

Find out how to reassure client-facing teams in turbulent times: Read the recap or watch the recording on demand today.


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