If there’s one thing investors all hate it’s uncertainty. Unfortunately, uncertainty is about the only thing the markets can guarantee. And while the stock markets continue to perform well overall, there have been enough days with huge losses to frighten even the most even tempered of investors. Wall Street pundits note that the current business has run several years longer than historical averages. Investors wonder “how much longer can this go on?” or “is it time to cash out?”
No one knows how long the market can continue to climb or if a recession is in the offing, but there have been warning signs. As far as whether it’s time to get out, that depends on where someone is in their life cycle and how long their investment horizon is. That’s something that a lot of people, especially young adults may not understand.
This presents an opportunity for financial advisors to implement communications strategies to educate existing and prospective clients and calm their fears while demonstrating the firm’s value.
Following are common market concerns investors are facing and how advisors can use PR, content and thought leadership to reach this audience.
Volatility Will Always be With You
What many investors fail to understand is that markets by their nature move up and down according to supply and demand. When they move suddenly, we say they are volatile. As one financial advisor pointed out to me, volatility is always a factor, it’s just that no one complains when it’s on the upside. It’s a clever quip that some of his peers might consider repeating.
Volatility is a concern for investors, particularly older ones, but it shouldn’t cause panic. For baby boomers, volatility is a much bigger issue than for millennials. Investors who are early in their earning years can weather a steep drop in the market and thus in the value of their portfolios, putting them in much better shape than someone in their 50s or 60s. People nearing retirement don’t have decades, or even years to recoup market losses, but most financial advisors can offer solutions geared toward the individual’s situation.
Provide Perspective on Trending Topics
Popular themes like volatility are consistently in the news and offer a great opportunity for advisors to share their perspective on how boomers can tackle this inevitability. Assigning a company spokesperson to dispel investors’ concerns through different types of media opportunities can help establish them as a subject matter expert while increasing brand awareness.
People Fear Running Out of Money
It all comes down to demographics. The simple fact is that people are living much longer than they used to and they need to plan for a much longer retirement in order to avoid the dreaded prospect of outliving their money. In 1935 when Congress first addressed the retirement issue with passage of the Social Security Act, the average life expectancy was only 61 and most people weren’t expecting to have many more years ahead. Today, the average is about 79 years old and in 2014, according to the Centers for Disease Control, there were more than 72,000 Americans over 100 years old.
Create Content for Financial Planning
With statistics as scary as these, boomers are looking for ways to prolong their nest egg. Distribute tips-driven content that highlights the financial planning essentials they need to prepare for the future. Expert content in the form of blogs, bylined articles and even videos can present your brand as a resource, effectively building trust with your audience. Learn how to make your financial blog platform stand out.
The Greater the Loss, the Longer the Recovery
For obvious reasons, someone expecting to live off their retirement savings for several decades can’t afford to see their principal diminish too quickly, because making up for losses requires even larger gains. The greater the loss, the harder it is for an investor to get back to where they started. For example, a 10% loss requires an 11% gain, but a 25% loss requires a 33% gain and a catastrophic 50% loss requires a gain of 100% to get back to the starting point.
Encourage Engagement with Interactive Tools and Marketing Materials
This is another area where financial advisors can do a service to themselves and their clients by preparing marketing materials that address this issue as wells as interactive tools like retirement calculators to encourage engagement. Or perhaps offer to write a column about it for a local news outlet or website.
Above All, Don’t Panic
As we head into the final quarter of 2019 and look toward next year, investors are rightly concerned about a possible stock market retraction, not to mention the upcoming election, nuclear weapons proliferation, tariffs and trade wars, global warming and other crises yet to be identified.
But as Chicago Mayor Rahm Emanuel famously said when he worked in the Obama Administration, “You should never let a serious crisis go to waste. And what I mean by that [is] it’s an opportunity to do things you think you could not do before.”
Financial advisors should consider using this potential financial crisis as an opportunity to communicate their expertise and build a reputation as thoughtful providers of financial advice.
Before deciding on a communications strategy, you need to make sense of all the elements that go into a digital marketing and communications program. Download our free ebook to learn how a blend of paid, earned, shared and owned opportunities can produce the right plan for your business goals.