How can advisers help clients and benefit from this crisis?

Fee-only adviser Suresh Sadagopan on how advisers can engage with their clients in the current scenario.
By Guest |  07-04-20 | 
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Morningstar invites thought leaders from the investment community to share their insights. Views expressed are personal and should not be construed as investment advice.

We are pat in the middle of a crisis which is developing into one which promises to be of gargantuan proportions. The progress of the disease is still having a lot of momentum and this is a worrying factor. Till the virus is active among populations and spreading, lockdowns and social distancing in one form or other will continue. This has brought the economic activity to near standstill which will have huge implications for various countries around the world and for India as well.

Governments will have to loosen up and will have to provide the stimulus to the economy. They will need to prop up businesses, stand guarantee to loans advanced by systemically important participants, infuse liquidity, initiate infra spending, create a market for loans for corporates, stimulate economic activity, take care of the economically vulnerable sections, provide incentives for businesses, ensure there are no job losses, provide tax breaks and put money in the hands of the consumers to incentivize buying, buoy up the sentiment etc.

But, how much the government could do is limited. Their ability is also impaired as they are fighting the pandemic, losing tax revenues, have limits to how much money they can raise and perils of slipping on fiscal deficit areas. But, all said and done, only the Government has to pump prime the economy.

At the time of a crisis like this, we as advisers, have a very vital job at hand now.

Get your communication and the tone right

While clients are panicking, we need to be the anchor for them. Staying in touch more than ever before is absolutely necessary now. The communication can be in the form of mails, video recordings, messages, phone calls, skype calls etc.

The touch points should be frequent and the communication needs to be open. We cannot paint an overtly positive scenario, which may be misleading. We as advisers will need to set the expectations right.

Most people are fine to receive the bad news as it takes away the uncertainty of what to expect. We however also need to appraise them to the perils of a long drawn out economic closure and the difficulties that it may present. But the bad news has to be presented sensitively and we need to be careful not to unnecessarily paint a scary scenario, which will make them worry more.

Along with that they need to know what they should be doing.

Guiding them at this point

Their life has turned topsy-turvy. Stock markets have crashed. They are sitting at home & doing office work, while doing their home chore routines!  Many are finding this hair raising. Some do not have the discipline enough to sit and work at home – the lure of TV is too magnetic!

One the money front, their increments are on hold. Bonus is uncertain. Pay cuts can happen.  Even their jobs may be on the line. They are high strung at this point. They long for a semblance of normalcy. They want someone to tell them that they will sail through this. They are worried about meeting their expenses, their EMIs, their goals...

As an adviser, we talk about portfolios all the time. Clients also talk about portfolios, because we do!

We should focus on what is truly important – their life! If we are able to show them that they have liquidity enough to meet their expenses, EMIs & goals and if we show them what they can reduce & postpone to make it all work, they will be indebted to you.

They are not bothered about how much returns they will make. They are bothered about whether their life can continue as they know it. We have a huge role to play.

Gain their trust and confidence

More than ever, at this point, they need someone to guide them. They are scared. They don’t want the buck to stop with them. They are too psyched out, just thinking about what the fallout of this crisis will be. They need reassurance now that it will all hold up. They need a confidante. If you are that person, they will welcome you with open arms & open out to you.

More than at any other time, they will be open & responsive to those trying to help them. If advisors approach them with empathy & genuinely try to help them in their hour of crisis, they would have a client for life.

We keep talking about wallet share. By engaging with the client at this difficult time, we can own the client. You will be their advisor on everything they have. Also, you will be the advisor of everyone they can influence! Not a bad payoff for being on their side during this time!


Crisis & our enforced confinement can be made to work in our favour. We just need to truly show interest in our clients & act with empathy. We need to communicate with them frequently, lend emotional support & help take appropriate decisions on investments and in other areas.

Done right, you will have more clients who are your raving fans, at the end of the crisis!

Suresh Sadagopan is the founder of Ladder7 Financial Advisories, a fee-only advisory practice.

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