In the last couple of weeks, I’ve seen a couple of businesses—a small enterprise off of a neighborhood high street and a national organization in Class A real estate that employs hundreds—endure connectivity breakdowns.
In today’s digital parlance, that means employees could not get onto the Internet, use email, access internal servers or even use the telephones. In one case, the situation went on for almost the entire workday, while connections at the other business were severed for days. Anyone who has ever visited New York and witnessed the way we tend to turn everyday exercises into extreme sports might imagine how that problem would impact a workforce eager to get going.
Certainly, communication breakdowns are headaches. But when political tumult grips North Africa and the Middle East, and the earthquake and tsunami disasters in Japan actually go nuclear, make sure that there are no breakdowns between your practice and your clients.
“Until there is at least some resolution to these events, there is little we can (or
believe we should) do regarding investment portfolios,” Harold Evensky, CFP, president of Evensky & Katz Wealth Management told clients in a recent letter. “The one exception is communication.” To that end, Evensky & Katz announced a client conference call, wherein it would talk about the market implications of the recent disaster in Japan.
Our daily lives are all about communication, to the point where one would have to make a decision not to be in constant touch with friends and accept requests from them. But clients might wonder how political protests that have turned into armed conflict in Libya will affect their exchange-traded funds or other investments in petroleum. For all of the ground that Japan has lost in the global economy, it still has the world’s third largest economy, supported by an educated workforce known for its drive and diligence. The fact that the Nikkei dropped about 10% in the first week of the disaster deserves some form of outreach from financial planners and advisors.
Freedman Financial sent out a letter to clients, linked from its weekly newsletter. It extended sympathies and well wishes to the victims and their families, and echoed sentiments from clients who said the events presented buying opportunities.
The wording in the letter itself seemed reasonable, and the fact that Freedman Financial sent it out in the first place seemed like a natural course of action to take. But in a recent phone call, Freedman said financial planners and advisors do not routinely reach out clients during geopolitical or market upheavals.
“Most advisors are so worried about what their compliance departments will throw up as a restriction, that they throw up their hands,” Freedman said. “Although compliance departments need to be sure the messages we are sending are appropriate, they are very willing and reasonable to allow it, if an advisor has a message appropriately sent.”
The right message should not predict what is going to happen on a stock or bond index, or immediately lay down a change in portfolio management strategy. “What clients really want to know is that you are just as concerned as they are.”
He took this message to Vienna recently, during a national conference for financial advisors presented by Fonds professionell, a magazine read by professionals in Germany, Austria and Luxembourg. The thrust of his presentation was how advisors cold recession-proof their practices through communication.
This is the sort of soft skill that can have very hard consequences. At the end of the connectivity crises I mentioned earlier, the small business owner got fed up with the lack of sensible responses to its inquiries. The company ditched its previous Internet service contract. At the large company, employees received regular updates as to how the problem was being managed, and that seemed to keep the provider in its good graces.
Be sure that after Japan rights itself, and if North Africa and the Middle East chart new courses for their respective futures, your clients will be there to talk about it with you.
