The Next Market Downturn Could Save Your RIA Firm

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If you own an investment management firm or RIA firm, you sweat out weeks like the ones we’ve had since the beginning of October. Running a business where a vast majority of your revenue is calculated as a function of the value of the investments you have under management leaves you acutely exposed to the next market crisis.

For pundits, they like to talk about the October curse. But, this time, it’s more than that. We have Ebola threatening a pandemic health crisis, the Eurozone barely treading water and geopolitical threats coming from Russia, ISIS and beyond. The deck is stacked against growth and investor confidence, so the party is over, right?

I’d argue for those firms squirming under the increased pressure coming from all things robo (just about every significant custodian has jumped in the game of late, like recently Schwab announced here), the next great market crisis might be their best shot at long-term survival – if handled right.

The market drops 350 points and your clients panic. They call or email your office. What do you do? In the age of robo, you better be prepared to call them proactively, discuss how the situation makes them feel and be prepared to talk about how their investment allocation is tracking against the goals they’ve shared with you. Suffice it to say, most robo-advisors are not equipped to handle much call volume, never mind market panic attacks.

The reality is this is just one example of how to recast the image of your firm around the client experience. Expert advice combined with human-to-human communication creates the most important deliverable of an advisor’s relationship with their client: peace of mind about their financial life.

If you haven’t embraced a content marketing strategy, get one ready now. Your ability to share your thoughts in real time on a wide scale can help you tackle the myriad of client communications that pop up when a market crisis hits. It’s not just about creating a blog, but providing rich, shareable content that your clients hear as an extension of your voice. Having your message in place before a downturn will help them feel at ease hearing from you via this channel when the correction hits.

There are other steps you can take in order to differentiate your RIA firm from your competitors (both traditional and robo). If you’d like to hear some other ideas on this, send me a note here or read my recent post on the subject here.