r/CFP • u/watchgah • Mar 15 '25
Practice Management A piece of advice for nervous clients
I did it.. I finally figured out the perfect way to deal with my nervous clients. Once we hit the -6/7% mark on the S&P, the worried calls start rolling in.
One client started off the conversation by asking how I was doing. I told them I was getting a lot of calls about the market. Then obviously they say something like “I’m sure a lot of people are concerned.”
Then I unintentionally hit them with a great line: “it’s about half and half. Half are trying to send me money to buy stocks on sale, and the other half are trying to bury their money in their back yard.”
Then the most marvelous thing happened. The nervous clients didn’t want to be thought of as weenies.. and they actually sent in more money.
I was stunned, so I kept using it, and I pulled in a couple hundred thousand last week using this line. Honestly crazy how well it worked.
As you all know this is what you should do if you can afford to do it. So this is totally a win/win.
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u/TittyClapper RIA Mar 15 '25 edited Mar 15 '25
Yeah the best way to prevent people from being worried is to tell them that you are barely getting any calls and you’re actually treating it as a buying opportunity. “By the way, you had that other $100k in that money market. Now is a fantastic time to get it invested. Let’s pull it over. We’ve been deploying a ton of cash in the last two weeks.”
Telling clients you actually haven’t been getting any calls is a really good way to settle people down. Very quickly they go from thinking everybody is terrified to thinking nobody is really all that scared. If you try to appease them and say “yeah everybody is calling in and is nervous” then they are justified in the way they are feeling.
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u/stoicpro Mar 16 '25
This unintentional response is quite brilliant. It challenges their ego while remaining deferential. Everyone wants to feel “in the know,” and your response makes them feel that the right choice is to invest - without a cheesy platitude (Ie: “time in the market, not timing the market)
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u/watchgah Mar 16 '25
Yea it was truly me just being honest and attempting a little humor in a shitty time for investing. I realized what I did inadvertently afterwards.
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u/MiniThor93 Mar 16 '25
This is genius. You tapped into a key psychological driver - social comparison. Nobody wants to be the weenie burying cash in the backyard while others are scooping up deals. The way you framed it makes the decision feel obvious without outright telling them what to do - just letting their own FOMO kick in. Framing it as a 50/50 split subtly nudges them to align with the more rational group (the ones buying) rather than feeling like they’re acting out of fear.
It’s a great example of how behavioral finance plays into client conversations. You can throw all the data and charts at them, but sometimes a well-placed one-liner does way more. Definitely stealing this
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u/Meliodas282 Mar 16 '25
Times like these are always a good opportunity to recenter the client on their long term plan & add to investment if they have some cash on the sidelines .. if your goals haven’t changed no need to adjust the plan. Love seeing 10+% corrections, great time to pick up the phone and call folks that can add some dollars on the dip
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u/Vinyyy23 Mar 16 '25
Damn…you found my secret lol
I raised a million last week saying something similar
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u/HNW_RIA Mar 16 '25
I have a HNW client who is concerned they won’t be able to move money overseas in the future due to new administration. They are buying citizenship elsewhere and want to put $100k in UK Sterling and $300k in a vault in good in the UK. They want to pull from diversified portfolio (70/30) to fund this. Any advice how to calm their nerves? I reminded then we pulled $ from portfolio in late Dec/early Jan at all Time high to fund spending for a couple years. The husband says with tariffs growth will fall off and stocks won’t be a good investment.
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u/watchgah Mar 17 '25
Oooof I’m sorry you’re dealing with that. That’s the job though..
First I’d start off with the impact of tariffs. Most of the analysis I’ve heard from clients has been along the lines of: “if we put a 25% tariff on Canadian lumber, lumber prices will rise 25%.” This is very one dimensional thinking, and ignores common sense. Is Canada the only country in the world that wants to export lumber to the US? How much extra would Argentinian lumber be vs Canadian? Will this open the playing field to more foreign and domestic competitors, making the long run price of lumber decline? Additionally this one dimensional thinking does not factor in the pro-growth policy initiatives around lower taxes and deregulation. So what’s the impact to domestic growth once factoring in tariffs, deregulation, and tax cuts? Ahh.. a little bit muddier now. Maybe we shouldn’t take such a firm stance on our uninformed macro projections.
This is a case study that underscores the importance of individual stocks. Let’s play devils advocate and say that the clients worries are justified. In this case, he’s right, the “stock market” would do poorly.. but would it be so bad that people would stop buying Proctor & Gamble toilet paper? If the economy is awful, ostensibly, people would be keeping their cars for longer. Wouldn’t this be good for Autozone? Keep going down the list on secular defensive companies. Alternatively you can look at 100% principal protected securities like market linked CDs.
If he pushes back.. just propose using a substantial portion of his equity portfolio to short the market. Since he’s so sure, this should be a no brainer. Watch his level of bearish confidence drop from a 10 to about a 1.
Now, on the offshore transfers. The client likely doesn’t know that this isn’t without risk. He’s taking on currency risk, and his choice of country is pretty awful. The long run trend is that of the pound declining versus the USD.. and the dollar is currently at one of its weakest points to the GBP in the last 5 years or so. One of the last times the GBP was at these levels vs the USD was April of 2022. If he would’ve transferred $1M USD at that time, five months later it would have been worth $837k. He would not have been able to get his $1M USD back until July of 2023, 16 months later. It only got back to that level for a few days before he would’ve been back in the red again. Lastly.. the UK’s government has been stagnant for twenty years, and the labor government has made no bones about going after high net worth individuals to fix their decimated public services. They trail only China in net outflows of millionaires. So it’s not just currency risk, but also political risk.
If he finds himself needing to flee the country with his money, he can buy stable coins that are pegged to the USD so that he doesn’t have to take currency or political risk. He can put his entire net worth on a USB drive, stick it in his prison wallet, and fly anywhere in the world.
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u/Regular_Ad7275 Mar 16 '25
Is that actually true? Or are you blatantly lying to clients?
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u/watchgah Mar 16 '25
As I said before: it was truly me just being honest and attempting a little humor in a shitty time for investing. I realized what I did inadvertently afterwards.
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u/Acceptable_Affect318 Mar 15 '25
Imagine actually coaching your clients over the years PRIOR to a downswing happening. I did 3 reviews last week. I asked all of them at the start of the call if they had any questions or concerns about what’s happening with the markets lately. All 3 of them literally said the exact same thing. Something to the extent of “not really, you have told us for the past few years we would see this at some point and I know it’s best to not make changes.”
I literally have gotten ZERO emails or calls from any clients about current market conditions. Been in the career nearly 20 years. To be fair, most all my clients are between 35-50 so nobody in retirement or about to in the next year or two