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Here's How FAs Can Guide Clients Through Evolving Capital Markets

By Crucial Clips     January 23, 2019
The following text is a transcript of a portion of a speaker's presentation made at an industry conference or during an interview. This transcript solely represents the view of the individual who spoke, and not the view of Financial Advisor IQ or any other group.
Source: FA-IQ, Oct. 9, 2018 

GARRETT KEYES, REPORTER, FINANCIAL ADVISOR IQ: Hello, My name is Garrett Keyes. I'm a reporter for Financial Advisor IQ. And I'm here today with Chris Cordaro, the CIO of RegentAtlantic.

So even amid any future changes in the equities market, or future changes in the bonds market, or changes in interest rates – what are the most important things for an advisor to do to guide their clients through that type of environment or any changing environment?

CHRIS CORDARO, CIO, REGENTATLANTIC: I think there's a couple of key points that advisors need to do, right? One is to talk about validating their feelings. The other part too is, it's about having discipline and maintaining your discipline. You need to know what your principles are in investing and what you stand for, and what your discipline is. And if you can consistently articulate that to clients, clients will finish your own sentence. They know what you're thinking if you've been clear about what those principles are.

And that I think is really important. Because the clients are looking for that consistency, they're looking for discipline. They know what the right thing to do is. And they're looking to their advisor for guidance. And so if I've done a good job, I've clearly articulated, "Here's what we believe. Here's why we believe it." And then clients have heard that story enough. They say, "I know what you're going to say. I know what you're going to –," and they can finish my own sentence.

GARRETT KEYES: So it's all about keeping clients looking at the big picture rather than just a couple of months ahead in terms of the market?

CHRIS CORDARO: Exactly. It's about getting them to focus on what their goals are, what the big picture is. It's getting them to understand that if you have a disciplined process to go about investing, you can feel a lot better about it. And you'll achieve better results because you're not scattered about your decision-making process. You're not being blown around by whatever might be fashionable. You're looking at something that rationally makes sense in a portfolio.

GARRETT KEYES: If clients are feeling stress right now, what can an advisor do to help alleviate their client's stress?

CHRIS CORDARO: Here's one on, I think, what is interesting in trying to help change perspective for clients. So on the diversified side, clients are thinking, well, long do I have to wait? And that's a really difficult thing. It is interesting that the MTA – the subway authority in New York -- their single biggest change to customer satisfaction was not getting trains there quicker, or not having more trains, it was simply installing the TV screens which told you when the next train was coming. And that alleviated rider stress because if you knew when the next train is coming, you're much calmer about it.

And so what clients are looking for is they want to know well, when does a diversification train come in? How long do I have to wait? And so, in helping them through some of that, we can historically look at how long different cycles have lasted. And that can help also alleviate some of the stress that they might be feeling, knowing that, look, this is not the first time this happened. And being diversified -- it is a little bit difficult because it doesn't feel good each and every year. But if you add up all the years and you look at the long term, it is the better solution to increase returns and reduce risk.

GARRETT KEYES: Well, thanks for speaking with me today, Chris.

CHRIS CORDARO: Thanks, Garrett.