I've been through a few of these market downturns over the last 30 years so I felt obligated to share my experience. Call it a crash thread if you will. Here's what I know.
1) When you view a correction in the rear view mirror of charts/graphs, they look eerily similar. The simplistic/repeatable way the market melts up, blows out and whipsaws before trudging higher - looks like history repeating itself. In the moment however, they all feel different
2) Every time it happens you feel the jolt. There's fear, both external and internal. Adrenalin surges, your focus intensifies and every thing slows down. Or everything speeds up and you are paralyzed. I can't tell you which one you will be, but the best advisers embrace it
3) There's an art to taking action and an art to justifying inaction. Regardless, you'll learn more about your process, your people, and your clients in a down market than you'll ever learn in prosperity. Make mental notes are you go through it. You'll need to better next time.
4) In the early 90's one of our first jobs during a market decline was to notify. Our clients literally didn't know it if we didn't tell it to them. It was an enormous responsibility to deliver the news but also a tremendous opportunity to craft the message.
5) Today, by the time we make contact with our clients they not only know the news of the day, but often have already developed their own theories and game plans. Today's calls start with a question. We have to feel them out - what do they know? what are they thinking.
6) what we do today is to provide context, a different perspective, empathy tied to experience. Sometimes we have to give a little to get the client in a more receptive place. Good advisers do that. Other times we have to be more firm and strong but in a way that is non-combative
7) You also have to exhibit patience. You'll never get it right in one session. You have to keep an open dialogue, respectful boundary on communication and transparency of both the known and the unknown. You are both learning together.
8) Experience doesn't eliminate fear. You are scared shitless every single time. Move forward through the fear of disappointment, the fear of letting down your clients when they needed you most, fear of not being good enough, not being prepared enough. Fear increases with AUM
9) More people looking toward you. More capital at risk. The easiest money to risk is your own, next is a strangers, the hardest is capital of friends/family. There's a special responsibility that fiduciary doesn't quite cover. It will hang over you and crush you if you let it
10) Market corrections are strange. You'd never really wish for one. But they are necessary. Nothing is a better teacher than the convexity of failure followed by an expectation to try again. It's humbling, invigorating, and challenging - doing it right builds pride/confidence
11) There is no standard definition of success. Is it getting out and reallocating capital - losing less? Is it standing strong in the face of adversity and holding steady despite the losses? Is it taking tax losses and tactically shifting to monetize the bad news? Well Yes or No
12) As the adviser you aren't the sole architect of a successful outcome. Your client is in this too. Your job as an adviser is to know what a successful outcome looks like to them and perform to that, while you also mold that for the next battle. Add some arrows to their quiver
13) During tough times, clients aren't looking for genius. That's a greed thing. No. Clients look for connection, hope infused honesty, concrete reminders that it will be okay, all clear signs they can look for, an honest post correction assessment, a better plan for the next one
14) So good luck to you all. This is your time. These aren't dollar signs with faces. These are living breathing human beings who need guidance, professionalism, understanding, and skill to make it through. Do it right and everybody comes through better for it.
15) Anybody who says it's easy, probably hasn't had to look someone in the eyes who was truly financially petrified. Facing the fear the dreams they counted on might not be the slam dunk they thought. You'll know the look, you'll know the voice on the phone, tone of the email.
16) You'll see it in your staff. Crisis is contagious. Here is where the value is. Face that fear, reset that vision, change the death spiral narrative, be a stalwart. Join your client in the fight in the capacity that they most need. This is what you signed up for, why you exist
17) Anyone can be a planner. Can you be a leader? Can you change the trajectory of the lives and the decisions of your clients while involving them in the process even as you direct it? Can you do that? I hope so. Cause that is the game - at the end of the day that is the game.
18) Good luck to all my #fintwit brethren old and new. Hope some of this resonates and motivates. Lots of hearts beating inside chests depending on your wisdom and effort. Time to give it up to them. Let's do this 👊
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