How to help clients keep calm and carry on

Most of us have been taught to stay calm in an emergency. But when money is involved, that’s easier said than done. In recent weeks, tariff threats, recession forecasts and geopolitical tensions have given investors plenty of reasons to fret.

Advisors are ideally positioned to help their clients keep calm and carry on, despite the unnerving news cycle.  

“Sometimes clients just need someone who can help them make sense of the things that they can’t make sense of themselves,” said Dave Lee, senior wealth advisor with Scotia Wealth Management in White Rock, B.C., in an interview.  

“And ultimately, that’s a big part of what they hire us for.” 

Listen to client concerns 

U.S. president-elect Donald Trump’s recent threat to impose sweeping tariffs on Canada, China and Mexico is a prime example of an alarming news story that could end up having no material impact on a client’s financial plan. Still, by staying up to date on these developing issues and taking the time to discuss them with clients, advisors have an opportunity to deepen relationships.

“Being available, being accessible and being able to explain things in ways that clients get and understand is really essential,” said Lee, who fielded client concerns during both the Covid-19 pandemic and 2008 financial crisis. 

Darren Coleman, senior portfolio manager with Portage Wealth of Raymond James Ltd. in Oakville, Ont., agreed. He said advisors should listen to their clients to assess how realistic their concerns are and then figure out how best to respond. 

“Some of the things, you may smile or think it’s odd or curious or funny, but if the client’s articulating it, they actually have a concern. And I think they have a right to be heard,” he said. 

Coleman, who runs a cross-border practice, said he answered calls from Canadian clients who wanted to move to the U.S. and U.S. clients who wanted to do the opposite after Trump was re-elected. But most of these clients did not consider the potential difficulties of such a move, such as the immigration process or tax implications.  

“Advisors should first listen and try to separate out what’s just an emotional response, what’s panic and what’s a problem,” he said. 

If a client is overreacting to news, Coleman said he’ll entertain the hypothetical situation they’re anxious about and what they believe they should be doing in response. 

“Sometimes I’ll just take it down the crazy road. We’ll see where it goes. And pretty soon they’re like, ‘Actually, that doesn’t make any sense, does it?’ Like, no, not really,” he said. 

At the same time, if there is “a substantive change to policy that might be coming that we should be paying attention to,” Coleman said he will discuss next steps with the client.  

Brent Vandermeer, managing partner and senior portfolio manager with CrossPoint Financial, which operates under iA Private Wealth, in Ottawa, consoled a client worried about tariffs as recently as Monday. 

“You have to really have a solid relationship with your clients, where you talk through these types of issues and wrestle through them and hear each other,” Vandermeer said in an interview.  

“I’ve taken on many clients who have said, ‘My advisor never listened to me. They just said, stay in, buy and hold, you’ll be OK.’ And what I ended up hearing [from] the client is they didn’t actually trust the advice.” 

Advisors need to acknowledge how politically charged the world has become and how this can impact client attitudes, Vandermeer said. The U.S. presidential election, for example, stirred up a range of emotions among both Americans and Canadians. 

“The weight feels heavy to people, [and] I think advisors should be really, really conscientious and aware of that,” he said. 

How to get clients to trust the process 

No one can predict the future, but good advisors strive to build diversified portfolios for their clients that will hold up in various economic conditions. Even better advisors will communicate this approach to their clients so that they trust the financial planning process and become more mentally prepared for whatever comes their way. 

“Uncertainty in the world is not a brand-new idea or concept to any of my clients, because it’s something that I’ve talked about from the get-go,” Lee said. 

“Every time we take on a new client and we’re talking about a portfolio, we’re talking about the many different ways that the world could change and be very different down the road than what we can possibly see. … I’m very honest about what we do know and what we don’t know.” 

Lee noted that his firm often publishes reports that analyze the impacts of various policies, “so we’re trying to stick to solid forecasting numbers” when making decisions.  

Similarly, Vandermeer said he and iA Private Wealth at large analyze long-term trends and historical data to guide their financial planning and investment decisions. Explaining this process, he said, has helped to instill client trust in the process.  

“I think you have to be humble in saying, ‘We don’t know the future, but this is my educated advice that this is the best way to go,’” Vandermeer said. 

For example, he suggested explaining to clients concerned about a second Trump term that company fundamentals and economic fundamentals, such as inflation and interest rates, have a greater impact on markets than elections or tariff policies, and using historical data to showcase this. 

As well, he advised against making knee-jerk or emotional responses. During an election year, money-market funds tend to see large inflows because people are risk averse, which Vandermeer said “has historically been a very excellent buying opportunity for long-term investors.” 

“Becoming too risk averse is an emotional response, and usually in investing, that’s not the right response,” he added. 

With newer clients, Vandermeer recommended spending ample time with them to explain how their long-term financial plan will hold up in different conditions. 

“Really spend time with them and try to remind them of the long term, the plan that you’ve built, that you’re trying to stick to, how we’ve seen events like this before that cause us to worry, and then offer some form of hope,” he said.  

“It’s trying to instill that [hope] back into them, to say there is something to hope for, to build for and to look forward to. And your portfolio is one part of that.” 

Coleman shared similar advice. 

“As I say most of the time, the right answer is going to be, ‘You know what, we’ve heard it, we’ve reflected on it, we’re actually not going to change anything,’” he said.  

“And historically, that’s actually turned out to be the best thing to do — nothing — which is also interestingly, the hardest thing for people to do. That’s what the advisor is there for.”