Want to know how advisors are feeling about the market downturn? As part of its Best Managed Firms study due out in March, Schwab Institutional released new research exposing details of the effects of the economic downturn on the financial advisory industry.

As the year of bankruptcies, layoffs and meltdowns came to an end, Schwab surveyed 30 advisors in the top 20% of firms from its 2008 RIA Benchmarking study. They asked these advisors what will be important to their businesses over the next 12 months, as well as how their priorities have changed since the beginning of the financial meltdown.

As clients watch their portfolios dwindle, it's no surprise that 71% of advisors find managing their client relationships to be their most important task this year. Almost all (97%) say initiating one-on-one communication with clients is essential right now, while 96% believe other forms of client communication, including emails and letters, are also key. Ninety-three percent say talking to clients about their investment approach will be important this year.

Given the ill health of the economy, 83% of advisors say proactively talking to and working with clients is more important now than it was a year ago. Other practice-management tasks, such as investment management and business development, came in lower down the advisors' list of priorities this year.

Most advisors do, however, believe talking with their firms on investment decisions (87%), streamlining operations (70%) and medium- to long-term business planning (67%) should also be built into their practices goals for 2009. Only 7% consider reducing headcount important in 2009.

"Everybody sees it as extremely important to reach out to their clients right now, and they're doing it in different ways," says Mark Palmer, advisor business consultant at Schwab. "They're creating special letters to go out, and there are more outgoing call programs. One firm even made sure that it talked to every single one of its clients within a month." Further, a full one-third of the best managed firms say that it's more important now than it was a year ago to invest in technology in order to free up some of the advisors' time, so they can work more on client relationship management at this point.

Want to learn more about how planners are reacting to the crisis? Keep an eye out in the next issue and on Financial- Planning.com for more on this study and other practice management studies detailing the fallout of the current recession.