Handling clients in volatile climate

Clients need hands holding more than ever in this market, it is important to establish at the outset that you are there to advise them and not to order take or be a comparison website. My clients should be coming to me for advice and guidance, not to compare every available mortgage. The current market is ruthless and one wrong step could cost your client thousands. Chains are wanting to move fast so the advice needs to be accurate and suited to their needs. I am currently dealing with a client in a chain, their buyers mortgage advisor has submitted them to santander even though their is sickness on several payslips, including their latest one. A good advisor knows this will delay the whole chain and we have been informed that we need to wait 4 weeks for their next payslip without sick pay on it. This is poor from the advisor. Rule number 1, make sure you know your criteria, if you dont and dont have the backbone to tell the client if something doesnt fit, dont be a mortgage advisor

Managing client behaviour in FX volatility matters as much as the risk strategy itself. When currency swings spook clients, our job is shifting them from speculation to discipline. Volatility is inherent to FX. Trying to time tops and bottoms is a mug's game, and we tell clients so. Re-anchor commercial clients to their operational margins: budget certainty through structured orders or forwards beats holding out for the perfect rate, every time. To cut through emotional paralysis and loss aversion, we coach systematic execution, using pre-agreed limits and stop-losses set before major risk events, so emotion never gets a vote. Layered hedging in tranches, pound-cost-averaging, in effect smooths the swings further. Managing volatility isn't really about predicting markets. It's about managing people.

The best time to prepare a client for volatility is when markets are calm. Set the scene at the outset: markets fall, sometimes sharply, but that doesn’t mean the plan has failed. When clients wobble, the conversation focuses on “this is what we planned for”, rather than starting the discussion from scratch.

We emphasise diversification, which helps reduce volatility, while phasing newer clients in can mitigate the impact of a market fall early in their investment journey. Longer standing clients have lived through several market cycles - experience is a reasonably effective antidote to loss aversion.

We remind clients that the stock market is a long run success machine & volatility is the price of admission. The aim isn't to avoid falls, but to remain invested long enough to benefit from the returns markets have historically delivered.

Some of our most valuable conversations end in no action at all. Our job is to stop a temporary emotion turning into a permanent financial decision.

The real work starts before clients invest. We prep them fully on the journey they should expect in terms of the ups and downs with the type of portfolio they're in, and also ensure they have a robust plan for what will happen when markets decline and they still need to draw an income.

This is something we revisit at every opportunity with clients, particularly where we've seen periods of decent returns as it can be easy to forget the pain of seeing life savings seemingly disappear through market dips. This reminds them of what normal looks like, and that plans aren't broken when markets crash.

The worst time to prepare a client for a market fall is after the market has already fallen.”

Managing behaviour starts at the first meeting. We explain that markets will fall as well as rise and that volatility is the price investors pay for the potential of higher long-term returns. When markets are rising, we prepare clients for the next fall; when they fall, we use history, charts and long-term data to provide perspective. But information alone isn't enough. Loss aversion is powerful — losing £100,000 feels very different from gaining £100,000. That’s where an adviser becomes a behavioural coach and, sometimes, simply the person at the other end of the phone. We would proactively call clients that find downturns difficult. The real danger isn't the market falling; it's abandoning a long-term plan at the bottom. The groundwork needs to be done before volatility arrives

Investors should expect periods of volatility, and you should tell them it is a normal part of investing; the extent of those fluctuations depends on the level of risk they are comfortable taking. The key is to keep decisions anchored to long term financial goals, rather than reacting to movements over a few days or weeks. In unsettled markets, it is particularly important to revisit why the money was invested in the first place and ensure the strategy still matches the investor’s time horizon and objectives.