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Be A Leader, Not A Manager

Last week, the market corrected and that morning I was speaking to a room of advisors. Their reactions to the financial news were both predictable, and in some respects, regrettable. Regrettable because none of their clients should have been left feeling vulnerable.

“Let me understand this,” I said. “We have been living through the longest bull market in history, one that started way back in 2009, and nobody was preparing their clients for this inevitable correction?”

Leading is telling people what’s going to happen. Managing is telling people what just happened. There is a difference, and one is required and appreciated more than the other.

Hindsight …

When things are really good and have been really good for a long time (ie. the longest bull market in history), then you should remind your clients that this kind of market won’t run forever, and that when everything breaks weird and the financial commentators flip their desks and televise coordinated freak-outs, complete with terrifying language and graphics, that your customers should keep calm. That’s because you (the advisor) have already planned for this.

In fact, you have been waiting for it and that is why you spend so much time harping about balance and diversification, so that when the inevitable happens and the world loses its mind, your clients don’t have to.

The correction was baked into the plan.

Advisors earn their money when things are choppy, not steady and climbing. When a bull run is in full charge, all of us look like geniuses.

Don’t get me wrong. Sometimes, it’s really handy to have someone explain to you what just happened. It’s just that it’s better to hear about it ahead of time.

Lead them.

 

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