The Advisor Institute: Coach's Corner
How are you delivering advice?

Practical messages intended to help you elevate the success of your practice.

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      By David RichmanNational Director, Eaton Vance Advisor Institute

      How you deliver advice today is important not only for managing your client's risk, but for how you manage your own risk as well. The real question here is: "How do you work with clients in this kind of environment?" There are three things to think about when having conversations.

      First is candor. Be willing to say you don't know. These are completely unchartered waters; no one knows what they don't know. Your clients do not expect you to have a crystal ball or a sense of certainty about when the pandemic will be over — they want honesty from you.

      Second is clarity. Clarity means you, as an advisor, need to have an opinion. Even though your clients are not looking for you to be a soothsayer, they are looking for clarity. You don't want them hanging up the phone wondering, "What did he/she really say or mean?"

      Even if we do live in a world of probabilities and scenario-building, you need to articulate what you believe is the most prudent course of action based upon the scenario that you have ranked as having the highest probability. You might consider saying something such as:

      "This is our base case, but we are also closely monitoring a scenario on this side of the base case and a scenario on the other side of the base case. We are monitoring these scenarios closely and if we see signals that suggest our base case is wrong, we will be able to pivot to a different scenario if we think that probability appears more likely."

      To me, this is the perfect way to pivot to a collaborative work effort.

      Third is collaborating consciously. So many advisors say, "Well, I'm a collaborator," but are you really a collaborator or are you just trying to sway someone into seeing your view? If you collaborate consciously, you could share both your optimistic base-case scenario and your conservative one. Then step back and pose the question, "How do you feel about my base case or are you more comfortable with one of my other scenarios?"

      That, to me, is a much better way to manage your risk and make sure that your clients come along with you versus clients saying, "Well, I'll just do whatever you think," which may feel appealing, but in the long run, in an environment like this, that may be fraught with peril.

      Bottom line: Blending candor, clarity and collaboration may be the perfect recipe for client conversations in this moment.