Markets are beyond our control, but advisers play a huge role in helping investors stay on track to reach their goals.
It is during these times, that advisers can add tremendous value for their clients through behavioral coaching.
This is something you can be doing proactively at all times, laying the groundwork, setting expectations and reaching agreements right at the beginning of the client relationship. Then, you coach in the moment when clients are reacting to market news.
Turbulent markets can tap into behavioural biases and bring emotional reactions. Common biases clients are likely to be experiencing at the moment are loss aversion (the fact that losing a pound hurts a lot more than the joy of gaining a pound) and herding (following the crowd, for fear of missing out).
There may also be a perspective of “this time it’s different”, so it warrants a different reaction to past drops in the market. But advisers know that this is unlikely to be the case.
The way you can address this in the moment, having laid the groundwork right at the beginning of the relationship is mainly around education. Key messages here, which you can support with evidence, would be:
Firstly, markets have proven resilient over time. If you zoom out and look at bear markets in the context of market growth over time, the effects seem far less significant.
Next, good and bad market days tend to cluster together. What this means, is selling out can really mean you're very likely to miss a recovery. And building on this, you can look back at past bear markets and evaluate costs of getting it wrong - which is often going to be considerable.
We have long maintained that periods of uncertainty, like those we’ve seen so far in 2025, really are the “moments that matter” for clients.
Our client-friendly coaching aids are designed to support you in those conversations, and they are available to download for you to use in client discussions or to give to clients when the time is right.
