75. Why frequent "market updates" may scare your client more

I used to conduct quite a number of "market updates" for the agency force, I have minimized doing so for two reasons

First is that it seems to create an assumed need among advisors that the ability to predict short term market volatility is required for a successful financial advisory practice. While being able to explain to clients current market situation and developments adds value to financial advice, it can also lead to the second reason

clients may start expecting advisors to provide regular "accurate" market forecast, inability to do so consistently may affect the advisor's credibility and create some stress in the relationship

For example the client placed some money in a single pay VUL intended for retirement 20 years from now, as VUL values fluctuate and may cause the client to worry, the advisor came up with a very compelling "market update" and is able to convince the client that the current market downturn is temporary and it will recover soon, the advisor turns out to be correct

imagine doing this for every "market correction", we may be right in our initial forecasts, but can we sustain this by providing correct forecasts all the time in the next twenty years?

The key to sustainable long term client relationship is to take the emphasis out on explaining why the market is volatile in the short term, market updates should focus on reinforcing the long term upward bias of the market, and it would help a lot if the single pay VUL is properly allocated from the very beginning 

a simple rule of thumb using time horizon 

so depending on how the market moves (whether up or down now will not matter), review and re-balance the portfolio regularly

all the best my friends!