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Engage Clients Based on Their Coping Strategies
Article publishedBy: David Richman  |  Article published on:November 15, 2022

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Engage Clients Based on Their Coping Strategies

By David RichmanManaging Director, Advisor Institute

Given current market volatility, how you communicate with clients will likely vary based upon individual coping strategies. While they are nuanced and at the risk of oversimplifying, three common coping strategies are the dragon, the ostrich and the owl.

How to Engage a Dragon

Dragons are quick to challenge and often put you on the defensive, as they may blame you for not anticipating the shifting market sentiment and subsequently reposition.

Seek to make the dragon an active participant in managing the client's portfolio. Empathize with the dragon, knowing that your empathy does not imply an apology or agreement with the dragon.

Sample statement: "While it is natural at times for us to have differences of opinion, it is important to work closely together so you are actively involved and comfortable with any decisions we make. If you ever feel that we are not working as closely together as you would like, please let me know."

How to Engage an Ostrich

The Ostrich uses denial as a shield to deal with financial anxiety and is unlikely to contact you when his/her anxiety is high. If you attempt to remove this shield too quickly without addressing the ostrich's underlying feelings, the ostrich will build an even larger, stronger shield.

To help lower the shield, repeatedly stress that you will maintain contact with the ostrich through good and bad markets—even more so when markets become volatile, like they are today.

Sample statement: "You can count on me to always stay on top of your investments and in close contact with you during good and bad markets as well as throughout your life's journey." 

How to Engage an Owl

Owls tend to remain calm and are open to scenario building rather than blaming you for portfolio losses.

Sample statement: "Mispricing occurs when a singular narrative comes to dominate the consensus, and plausible alternative scenarios drift out of the field of vision. Would you like to explore the possibilities to capitalize upon what we currently perceive to be 'mispriced scenarios'?"

Bottom line: When you understand clients' specific coping strategies, you can adjust your approach to help them manage uncomfortable emotions, increase their personal control and chase positivity—in any market.