Market corrections are a fact of life in the advisory world. The key to surviving – and thriving – means not giving in to the fear.
Seems pretty likely that we are due for a market correction—world politics, natural disasters, and Congress’ inability to pass meaningful economic legislation all have an impact on market conditions. Plus, we know most of all that what goes up must, at some point, come down. That’s, for sure, been a trend in recruiting as well, leaving many advisors scratching their heads as to whether deals will ever come back up to what they once were.
As a financial advisor, I imagine each and every one of you grapple with how to protect your clients from downturns in their portfolios in the event of a significant market correction. You make sure you are building portfolios for the long-term, meant to withstand market gyrations: capture significant upside and weather meaningful downside. Likely, what you don’t do – even if you are super-convinced that a market correction is coming soon – is move everyone into cash or other safe havens.
Certainly, you have no way of knowing for sure what lies ahead for the market. You base your decisions and plans on your experience, knowledge, client goals and of course, key market indicators.
Likewise, advisors who come to us for counsel on their careers and business goals will ask us a series of questions about where we think the industry landscape – the “opportunity market” – is headed.
“Do you believe that the big firms are going to pull out of the Protocol?”
“Will firms eliminate their retiring advisor programs?”
“Do you think firms will mess with payout and move to a salary-bonus model?”
“Will transition deals ever come up again?”
Of course, any and all of these things are possibilities. But like building a portfolio for a client based solely on the “what ifs” and “maybes” is unlikely to fulfill their goals, planning your business life on fear, “what ifs” and unrealistic expectations will not lead you any closer to fulfilling yours.
If fear is your driver, you’re probably going to head down a path that’s not going to make you very happy.
Our advice to any advisor considering his future is never to act solely out of fear. Said another way, you shouldn’t consider a move if the only reason to do so is because you’re being driven by “what could be”—that is, those things that may never come to fruition.
I recently wrote an article entitled, “Beginning with the end in mind,” the whole premise of which is based on defining a strategic course for your future. Much like building your clients’ portfolios based on their long-term goals, you should likewise have such a plan for your own career. That is, one based on understanding your own needs and goals.
Truly knowing yourself and understanding your goals will help you to better weather the storms that will inevitably appear, and enable you to base your decisions on a pre-determined destination, rather than reacting to things beyond your control as they unfold. Likewise, looking back and hoping for an “opportunity market” that once was will not serve you. Instead, let fortitude be your driver, and the path to your destination will be a far less stressful one.