Two words tell you if your investment adviser is mailing it in during this historic period of financial market turmoil: “Stay calm.”
Two more useless words cannot be found. They tell you an adviser wants to pacify you with platitudes, not advice. They tell you an adviser would rather you be quiet, hold onto your investments and not bother anyone with your questions and concerns.
By now, you should have heard from your adviser at least once in regard to the impact the coronavirus has had on the stock markets. E-mail blasts are the lamest form of communication. Better a phone call or personalized e-mail.
There’s an understandable impulse in the financial community to try to explain the market turbulence away: “It’s just like 2008-09.” Or, “Here’s what happened in the SARS outbreak in 2003.”
Financial people also live in a numbers world, so they often try to use data to reassure you.
No doubt you’ve seen some long-term stock market charts depicting crashes like we’ve had lately as nothing more than fleeting interruptions in the long-term growth of stocks. Those graphs are truthful, but they’re also an abstraction in a time when concrete reassurances are needed.
The best advisers engage you as a person who is naturally worried about their financial future. They’re up to date on the financial supports that governments have been announcing to ease the economic pain caused by the virus outbreak.
And they don’t shy away from hearing you express your fears about your income and job prospects, how your retirement might be affected or how your children’s registered education savings plans will make it through.
That’s because these advisers have done more than sell you investments. They have built a financial plan for you with multiple moving parts that can accommodate setbacks like the ones we’re seeing right now.
Good advisers don’t automatically deliver happy endings. Some financial plans may end up off track and require you to save more or retire later. But good advisers can handle it. They will talk you through your options and not pretend that staying calm fixes everything.