ESG and Managing Client Relationships in a Volatile Market

By January 7, 2019Impact Investing

The current market downturn and volatility we are experiencing is obviously a big change from the behavior of the market over the past 10 years.  In my 28 years of experience as a financial advisor, I’ve found that the most important thing to do during a down market cycle is to call my clients before they call me.

The reality is that more clients leave their advisor due to lack of communication and service, as opposed to market performance and return.  Calling your clients first lets them know that you are not hiding or panicking.

There are 5 things that I have highly recommended to all of the advisors in my firm as we navigate the ups and downs of the current market cycle:

  • Take a deep breath. It is vital that you do not panic during challenging market cycles.  Fear is contagious, but so is confidence, and whatever you portray to your clients is going to have a great effect on them.
  • Pick up the phone and call your clients before they call you.
  • Assure them that market cycles are normal. While every client might hope the market never drops, every advisor knows that that the market does not continually go up forever, but over the long term, the trajectory of the market is upward.
  • Review your client’s risk tolerance in light of the current volatility. For many clients, risk tolerance in a bull market differs greatly to risk tolerance in a bear market.
  • Rebalance their portfolios when appropriate.

Hopefully, the portfolios that you’ve designed were appropriate for your client’s risk tolerance when the markets were going up, and are still appropriate now given the market volatility that is currently taking place.

If you would like to learn more about our ESG (Environmental, Social, and Governance) focused portfolio strategies, and/or would like a complimentary analysis of your current strategies, please feel free to contact Penelope Jackson at pjackson@GittermanWealth.com or 828-707-2079.

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Author Jeff Gitterman

Jeff Gitterman is a co-founding partner of Gitterman Wealth Management, LLC, and a thought leader in the field of Sustainable, Impact, and ESG (Environmental, Social, and Governance) Investing. He is the creator of his firm’s SMART (Sustainability Metrics Applied to Risk Tolerance)® Investing Services, which offer investment opportunities for individual clients, as well as research and investing services for other financial professionals in the Sustainable, ESG, and Impact arenas.

Noted as an “ESG expert” by Financial Advisor magazine, Jeff has also been featured in the past in Money Magazine, Barron’s, Morningstar Magazine, The Wall Street Journal, CNN, and Affluent Magazine, among many others.

Jeff deeply believes that the migration of investor capital towards more Sustainable, Impact, and ESG investments is one of, if not the most effective way to help realize the United Nations’ Sustainable Development Goals (SDGs), and he is committed to helping both investors and other financial professionals navigate the rapidly growing Sustainable, Impact, and ESG Investing landscape.

More posts by Jeff Gitterman