With growth expectations in the United States and worldwide grinding to a halt and the ever-present recession woes looming, many investors are becoming increasingly concerned about the state of their assets. And moreover, what the current state of their assets means for their financial and possible retirement goals.
Those in the financial services industry are not immune to such concerns. In a recent survey by Bank of America, Financial Advisors and Hedgefund Managers reported that their biggest concern with the most potential long-term negative impact to their investments was inflation, followed by the uncertainty of a possible recession.
It’s no secret that diversification is an important part of RIA portfolio management. Your clients come to you, in part, to make sure that all of their proverbial eggs won’t be in one basket. Often, the complexities around understanding and implementing diversification are what lead your clients to you in the first place. It’s one thing to invest casually in the stock market, but quite another to truly manage your own wealth across asset classes.
Even though the financial plans you’ve made with your clients are diversified appropriately to reach their future targets, you may need to provide additional information right now to them about how they are positioned during this time of economic uncertainty. This is a time to stress test your communication style and hone your message about your value.
Additionally, you may want to talk to your clients about making sure you see their entire financial picture. Are there held away assets you could be advising on? Do you know about their alternative investments? It may be out of your comfort zone to get your clients into alternative investments, but it could serve to make your client’s portfolios stronger and more resistant to inflation and recession concerns.
If it’s too much out of your expertise to recommend certain investment categories, check out how one financial advisor broadened his client base through private investments.
Staying diverse and ensuring that you are able to add the most value to your clients financial life can help keep your advice top of mind when economic uncertainty grows. As always, providing a clear financial plan is one of the best ways you can help your clients feel more confident in their portfolios during the months and possibly years to come.