The Value of Communicating with Clients During Volatile Markets

posted in Cautious Investors Nov 6, 2018


Financial advisors generally understand and accept that volatility is inherent in the stock market, but not all clients are as immune to the natural ebb and flow of investing.1 It’s not uncommon for a market dip to grip clients with fear, and often a reactive leap out of their long-term investment strategy follows.2

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How Risk Aversion Impacts Wealth Management

posted in Cautious Investors, Annuity, Risk Tolerance May 22, 2018


The quarterly Retirement Readiness Index (RRI), which accompanied the latest Retirement Advisor Confidence Index (RACI) from Financial Planning, reflects that investors were significantly more risk averse in the first quarter of 2018 than in the 12 months prior:

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Can Affluent Investors Overcome Doubts About Market Performance?

posted in Cautious Investors, Risk Tolerance May 1, 2018


2017 saw a decided split among the affluent when it came to faith in the market. Spectrum Group reported that those with $1 million or more in investable assets no longer held onto major market skepticism, although they remained mildly bearish. Investors with $500,000 to $1 million in assets, however, lost considerable confidence. So much so, in fact, that 42% opted out of investing altogether by June of 2017 — a steep climb from the 33.6% in February1.

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Minimizing Loss Can Be Your Clients’ Gain

posted in Cautious Investors Feb 27, 2018


In recent weeks, the stock market has given investors plenty of reasons for concern, including a never before seen single-day drop of 1,175 points.

This sobering turn of events has given industry naysayers greater cause to point to the cautionary tale of 1929 and predict the inevitability of a stock market crash1. Vigilance is good, even necessary. However, talk of history repeating itself can make your risk-averse clients more panicky when the market experiences a significant drop.

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No More Money on the Sidelines: Helping Clients Rethink How They Save

posted in Cautious Investors, Risk Tolerance Feb 20, 2018


It’s said that a bird in the hand is worth two in the bush. Given the 6.6% spike in bank deposits last year — translating to nearly $11 trillion1 — it appears that Americans are heeding that age-old advice.

While this conservatism may partially be fueled by lingering skepticism about the resilience of the U.S. economy, that’s not to suggest that saving money using a bank is a bad practice. Roughly 60% of recent Gallup poll respondents who indicated they preferred saving to spending2 likely use their accounts in this fashion. The savings habit is a good one, but they’re simply not asking their money to work for them and, more specifically, for their retirement.

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Redefining Risk for the 80% of Investors Who Want Portfolio Protection

posted in Cautious Investors, Risk Tolerance Jan 23, 2018


Risk and reward. It’s the eternal and necessary tension in the stock market, and the presumed goal is the reward side of the equation — the “win” in spite of the risk. But, is it really the goal? Nearly 80% of respondents to the Cerulli Associates’ U.S. Retail Investor Products and Platforms 2017: Retooling for the Modern Investor survey would disagree. This weighty majority “prefers the safer route of protecting portfolios from major losses, even if that means periods of underperforming in the market1.”

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3 Questions About Fear to Help Determine a Client’s Risk Tolerance

posted in Cautious Investors, Risk Tolerance Oct 10, 2017


Perhaps the scenario sounds familiar: You’re sitting across the table from a client who finally accepted your repeated invitations to meet and go over his portfolio, which has been in maintenance mode for the last decade or so. He’s been relatively unengaged, and this is the first real opportunity you have to review his investment goals and further develop that all-important, trusting advisor-client relationship.

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Managing the Top 3 Fears of Baby Boomers

posted in Client Relationships, Cautious Investors, Retirement Oct 3, 2017


There’s been a lot of emphasis placed on the Millennial generation and the importance of attracting younger investors into the market and into financial advisors’ offices. Contrary to popular perceptions, Millennials are actually saving more for retirement than Baby Boomers — 82% vs. 75% — as reported by Employee Benefit News.1

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Discuss These Three Major Purchases with Clients

posted in Cautious Investors Aug 1, 2017


As you help clients grow their wealth, it’s inevitable that they’ll want to spend some of it. Just as important as it is to guide them with sound advice on saving and investing, it’s important to also guide clients in how they take distributions, and whether any purchasing decisions they make today will negatively impact their goals for the future.

As part of your ongoing conversations with clients, be sure to discuss any potentially large purchases such as a second home, RV, travel, or other big-ticket items. With your experience, insights and expertise, you can offer guidance and cost-saving advice to help ensure their financial outlook remains healthy while still enjoying the benefits of their wise investment decisions thus far.

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How to Help Risk Averse Investors Over 45

posted in Cautious Investors May 2, 2017


The Situation

During the financial crisis of 2008, your client was at the peak of his career. Sure, he felt the hit. But he knew there was plenty of time for his retirement savings to rebound and recover.

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