There may be whispers in your office or tension after your last client call because everyone is wondering the same thing—will this be as bad as the last one?
A recession can have plenty of opportunities scattered between temporary economic downturns. But fear of the unknown can have clients scared and financial advisors halting their business development plans.
Don’t wait until clients' or colleagues' fears have run wild before addressing them. The best way to bring about leadership in the face of adversity is by facing it head-on, even if you don’t have plan A-Z established.
How to Prepare for a Recession
Talks about a recession can have people doing all sorts of crazy things. Cashing out on long-term investments early, pulling savings plans, and selling your home out of worry of a market crash are just a few examples.
Extreme actions are often rooted in fear of the unknown and making impulsive decisions based on the safety of right now rather than the projection of what’s to come. Since we don’t have a crystal ball, there’s no clear roadmap on how to react in a recession—but there are some best practices you can implement to keep you and your clients aligned with your goals.
1. Communicate often.
Technology has been a safe place throughout isolating incidents in the past decade that allows people to come together online when they’re struggling to find community. It’s also been one of the fastest breeding grounds for misinformation.
There are plenty of attention-grabbing articles that will keep fear at the forefront in order to keep readers engaged. This is a great time to pick up the phone and call your clients or schedule an in-person (or even virtual) meeting. You can squash any rumors about what’s happening in the current market, remind them of their plan, reassure them, and put on your coaching hat that allows them to feel safe expressing their fears.
You can also use this time to schedule monthly emails that will give them a brief overview of what’s happening, so they feel educated while other friends/family members are speculating on what is to come.
2. Focus on your existing clients.
It's more costly and time-consuming to acquire new clients than it is to maintain existing ones. True, even in the most ideal of situations, but because of the recession, it's even harder, especially when it comes to convincing someone to try someone new with their financial security. As a result, it's more important than ever to focus on your current customer base.
Building relationships now while navigating difficult times can lead to life-long loyalty and an abundance of referrals. Your present customers will likely know someone who could benefit from your services. When the economy slumps, it's the perfect time to go out to past clients, ask for testimonials, and find out if any of their family members are worried about their financial futures. Your job is to turn that worry into hope for a better future.
3. Empower your community.
Empowering your community is the best way to stay top of mind and help others overcome confusion and misinformation. There are a number of ways you can share your knowledge that could lead to a possible new client connection.
- Post what you know on social media consistently.
- Write bi-weekly blogs that people can depend on.
- Inform others through a monthly e-newsletter.
- Speak at local networking events.
Empowering your community can start small and snowball into several opportunities along the way.
Tips for Coping with Stress in a Recession
What’s more important than taking care of your clients? As the old saying goes, you can’t pour from an empty cup. Taking care of yourself first is crucial in light of a recession. Financial advisors are stressed because they’re in the thick of all the misinformation and handling fear-based decision-making from their clients.
Here are three routines you should establish to eliminate and cope with stress during a recession.
1. Establish a support system.
If you want to get somewhere fast, go alone. But if you want to go far, you go together. It can wear on your mental health when you’re handling objections, high emotions, and the unknown. It’s essential to establish a support system that not only focuses on business but other aspects of life too. After all, you aren’t just a financial advisor, you’re a whole person.
This can look like establishing a local group of runners to keep you healthy, phoning a colleague whenever you’ve just learned new information that may change your clients’ projections or a coach that helps you decide what to do next to grow your business.
2. Limit negative influences.
News outlets can easily become an algorithm for disaster. Everything is going wrong, and it’s all going wrong right now. In order to keep yourself in a positive mindset and help clients focus on hope, you’ll want to limit negative influences. This can include:
- Establishing boundaries around negativity. This could mean that you ask friends/family/colleagues to keep the fear-talk at a minimum and interject when it’s become the main topic of discussion.
- Putting your cellphone away at night. Checking your phone releases dopamine into the brain, so it can easily become addicting. But when your algorithm is pushing negative news stories at you, it may be time to turn it off and read a breezy novel instead.
- Start your day with gratefulness. Before you check your phone, or even brush your teeth, keep a notepad beside your bed. Every morning, think of 3 different things you are grateful for that are different than the day before. By starting your day with gratitude, you’ll be more open to all the positivity that is within reach.
3. Design your day-to-day.
What does your day-to-day look like? Is it filled with obligations? Any me-time? What about time for your health? If your calendar is looking out of balance, it’s time to make a change. You should be designing your day-to-day activities to bring you closer to your short-term and long-term goals, including family/me-time and something that will boost your health.
When are you at your peak? This is when you should set aside 3 hours of deep work to put away your phone and focus on tasks that will bring you closer to your envisioned future.
A financial advisor isn’t just the person you hire to manage your money. They often become life-long friends or respected influences that help guide decision-making processes. During a recession, an advisor's job is more challenging than ever. By communicating often, focusing on what matters, and taking care of yourself, you can thrive in any recession.
Simon Reilly is a consultant, speaker, and author with Leading Advisor and a contributing columnist for Advisor Today.