[November 04, 2008]

Financial advisers try to calm the waters

(Bismarck Tribune, The (ND) Via Acquire Media NewsEdge) Nov. 2--Stay calm, breathe, breathe, let's talk it out. It'll get better, we'll get through this together.

It seems financial advisers are now playing more the role of counselor and comforter for their clients as markets ratchet up and down, flinging around 401(k) and other retirement plans, playing on consumers' worst fears: losing money, assets and future plans.

Area advisers are fielding more phone calls and easing more concerns, reacting to changes in risk tolerance as well as playing educator.

"I think clients are concerned about the market volatility and they're concerned about ... how their investments may hold," said Steve Felchle, financial consultant with Wells Fargo. "They're worried about where the market's going, what to do."

In the last year, the Dow Jones Industrial Index and the S&P 500 have dropped more than 30 percent. October was predicted to be the worst in 50 years. Markets are moving, changing, credit has dried up and consumers are understandably leery of the volatility of the economy in its entirety.

The downturn in the past year can be comparable to the steady decline in the market from 2000 to 2002, only this year's was a fast and furious shock to portfolios. Add constant media attention and nearly hourly updates of where the markets are at, who's merging with what and when and what the Fed is doing and you have a recipe for fear.

"This is certainly an unprecedented financial situation," said Tom Engelhardt, financial adviser with Edward Jones in Bismarck.

Clients for many financial services agencies have become more conservative, but seem to have stopped short of panicking. They're leery but, with the help of their advisers, are able to look down the road at the bigger picture or at least behind them at precedent.

"You know they're watching the news every day and seeing all the news reports and so on, and, yeah, they can become very fearful and rightfully so," Felchle said. "When we sit down with them, they feel a lot better, they feel more comfortable."

Because, as with most financial roadblocks, education and being proactive is key.

"You just try to show them history," said Joel Bird, associated financial adviser with the practice of Roger A. Koski. "People hear comparisons to the Great Depression, and that certainly scares them. You just try to show them history and that things like this have happened before."

And that they can pull out of it ahead.

Investors are already part of the downside of the market, Engelhardt said, they need to stay in to experience the upside. Keep contributing to retirement plans to build quantity in preparation for the market's turn back up.

"Over the course of 10 to 15 years, you'll have twice as many shares in your portfolio, and twice as much money," he said.

As for those retiring soon, cash is rarely taken out all at once, but in livable increments, Bird said, allowing the rest to continue to follow the market.

All in all, investors should be aware that their advisers and brokers are prepared for the frantic phone calls and are ready to react quickly and calmly to their clients' nervousness, Engelhardt said.

"It's important for clients to be in contact with their adviser periodically throughout the year," Felchle added. "When we design a portfolio, I spend a lot time educating them about that. That's very good practice that they have a very good understanding what they're investing in. Makes my life and my clients' life a little easier."

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