How to help clients hold on

While high returns may please clients in the short term, they’re impossible to maintain on a consistent basis. To ensure long-term success, advisors should instead focus on building their brands and making sure clients can weather volatility storms.

“Due to the recession, building a good reputation has become even more crucial,” says Richard Peterson, M.D. and managing partner of MarketPsych. “The drivers of business growth have changed.”

Investors now want advisors to protect their money, and in turn, advisors are warning them against chasing yield.

Read: Real (estate) income: A haven from volatility

So, in the changing global environment, how can you achieve long-term success?

Peterson, during a presentation at the CFA’s 2012 Annual Wealth Management Conference, revealed two practices that’ll help advisors ensure clients hold on in tough markets.

1. Client-centric model

Advisors shouldn’t just be salespeople, says Peterson. “They’re wealth managers who should focus on the values and needs of clients.”

If an advisor is constantly pitching, he’ll make his numbers, but clients will become skeptical of any communications.

To avoid this, speak to clients in a simple, consistent, and candid manner. Then, keep any promises you make.

2. Frequent communication

In up markets, being honest with clients and helping them achieve goals is easy. But, when markets are volatile, clients can be erratic.

To keep clients calm and prevent them from making impulsive mistakes, Peterson suggests advisors check in with them weekly during volatile periods, or anytime a client is stressed, such as after she’s lost her job.

By simply emailing or phoning, advisors will stay on their clients’ radars and quickly diffuse any unchecked anxiety or impulses.

Take the long-awaited Facebook IPO. It caused an explosion of activity last week, with many investors yearning to buy the hot stock due to market headlines. However, it had slumped by end of day and the company is now mired in scandal.

Read: Shareholders sue Facebook, banks