Like it or not, the broader world is constantly throwing new client obligations in your lap. Just within the last 10 years, the financial planning service menu has added choices like helping clients understand the uncertainty of market outcomes and Monte Carlo analysis; calculating and communicating safe retirement withdrawal rates; analyzing the most tax-efficient ways to take money out of a mélange of tax-deferred, taxable and Roth accounts; projecting the likely benefits of a partial Roth conversion in an uncertain tax environment; and broadly helping people connect their portfolios with their life goals-usually by helping them find their life goals in the first place.

Now, within the last 18 months, the markets have helpfully given you a new client obligation. Increasingly, clients are asking your opinion about the safety and soundness of the markets in light of recent events or forecasts. Your level of communication about portfolio issues has increased dramatically since September of 2008, and this higher frequency seems to be permanent. All of a sudden, clients expect you to serve as their personal macro-economist.

If you were trained in macroeconomic theory, or have experience as a Federal Reserve economist, then this isn't a problem. But I'm guessing that many of you are not totally comfortable in the role of watchdog over housing starts, fluctuations in applications for unemployment benefits, inventory buildups or capacity utilization. You may be alarmed to discover that your clients are hoping you'll be able to see the next gathering of storm clouds in the global economy, so you can nimbly redirect their assets out of harm's way ahead of the next downturn.

TOO MUCH INFORMATION

So what do you do? You can start by defining the problem. At the NAPFA Practice Management & Technology conference in San Diego, Michael Aronstein, portfolio manager of the Marketfield fund, said that one of the biggest forces affecting the markets today is the sheer amount of information that clients are receiving about their investments. Fifteen years ago, people might check the stock quotes in their morning newspaper, and once a month Money magazine would tell them about the "Six Funds to Buy Now."

Compare that with today, when clients might have a running ticker at the bottom of their computer screens, or a portrait of their investment portfolio continuously updating its various components and arriving at new values every 15 minutes. News, information and even fundamental analysis is flowing into clients' brains through sources that never before existed, exposing them to macroeconomic data they can't possibly interpret. Aronstein added that it has become a good business to give out doomsday information and frighten investors, and people on what he calls the "financial reality programs" have gotten darn good at it.

The result, the pathology of our investing age, is that financial consumers are constantly being driven to a state of high anxiety about their portfolios-and you know this to be true from your own experience. Aronstein noted in passing that this state of constant anxiety may be driving investors away from what he called "risk assets."

How? If holding stocks makes your stomach churn, then you might be reluctant to buy or own them. Multiply that effect by a few million investors, and it could drive up the risk premium. That, in turn, could generate proportionately higher long-term returns for people who either have a strong tolerance for uncertainty and fear-mongering or an advisor who can help them put all this scary information into perspective. People with a weaker stomach will be driven toward assets that are harder to value on a daily basis, which might underperform traditional vehicles, but do promise to alleviate some of this anxiety.

FIRE DRILL

The ideal solution would be to have a fire alarm on your wall that would ring loudly right before the next market storm. Looking back at 2008, and indulging what behavioral economists call our "hindsight bias," there are obvious signals that the market was about to go in the tank. First Bear Stearns. Then Lehman. AIG. Then the discovery that pooled mortgages were mostly junk bonds with triple-A ratings.

But if you think it's that easy, think again. A few months ago, Harold Evensky of Evensky & Katz, Chris Cordaro of RegentAtlantic and a veritable who's who of other advisors asked iRebal founder Gobin Daryanini to lead an exploration into what, if anything, might signal the next downturn. They looked at the VIX (market volatility) index, and found that, rather than being a good sell indicator, it actually provided good buy signals. They found indicators that might have given reliable clues for some downturns but would have been either silent for others, or sent up a warning bell when, in fact, nothing interesting was happening.