Help Your Clients Understand the Markets and Their Portfolios
While the markets have seemingly recovered from the early impact of COVID-19, the past few months have been a reminder that unpredictability is a part of investing, and downturns are inevitable. And, with the impending U.S. presidential election, more volatility could be ahead.
Your clients may be feeling understandably uneasy about what has happened and what the future may hold. Investor emotions can have a significant impact on long-term investment decisions and performance. With many investors feeling fearful and seeking protection from future events, they may have questions about their investments, the strategy in place, and how you can help them manage potential volatility.
As an advisor, this is a critical time to ease their concerns, offer perspective, and provide strategic guidance to help them understand what’s happening. Show them how you can help them cut through the noise and potential misinformation and focus on what’s most important regarding the markets and their portfolios.
For example, if your clients understand market volatility, it may help them feel more confident in the long-term plan you built together. BlackRock’s Scenario Tester can help you stress test a portfolio to see how it might react against market events. With recent enhancements, you can now stress test against Market-Driven Scenarios™, including potential COVID-19 impacts, in addition to 30+ other market events, some of which can help illustrate volatility’s impact on portfolio holdings. Market-Driven Scenarios™ show a range of outcomes that could occur depending on how the world may evolve.
BlackRock continues to enhance the Scenario Tester, which is available for Envestnet users who subscribe to BlackRock’s Advisor Center, with new scenarios to address pressing investor concerns. You can use the tool in just three steps:
- Upload a new portfolio into the Scenario Tester tool.
- Stress test against “Pandemic Recession” scenarios or others that may interest your clients.
- Analyze the results and share them with your clients in easy-to-understand, client-friendly reports.
Running the tool every few months is just one way you can use technology to help uncover and address your clients’ concerns. But while technology can enhance a human connection, it cannot replace one. Your clients will rely on you to help them understand the reports and recommended actions. You should look for additional opportunities to expand and deepen your client relationships while reinforcing your value. You may want to spend part of each conversation focused on personal updates, specifically asking about the well-being of family members. You may also want to consider a proactive communication program to ensure that you’re routinely connecting with your clients and aligning with their concerns and priorities.
As we continue to navigate a new normal, find ways to evolve your practice and enhance your relationships. To learn more about how you can leverage our financial wellness platform, including subscription offerings like Scenario Tester, contact your Envestnet sales team at 855-769-0806.
The information, analysis and opinions expressed herein are for informational purposes only and do not necessarily reflect the views of Envestnet. These views reflect the judgment of the author as of the date of writing and are subject to change at any time without notice. Nothing contained in this piece is intended to constitute legal, tax, accounting, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type.
Tools on BlackRock’s Advisor Center are offered exclusively for financial professionals. Certain tools allow for the generation of client reports.
IMPORTANT: The projections or other information generated by certain Advisor Center tools regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Results may vary with each use and over time.
Through a holding company subsidiary, BlackRock, Inc. (“BlackRock”) owns a non-controlling interest in Envestnet’s parent company, Envestnet, Inc. (NYSE: ENV).
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