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Marketing Advice or Investment Results?

Today marks the end of the year’s first quarter, a good time to look both forward and backward as we plan for the rest of the year ahead. Looking back, we can see that the strong performance of the markets last year did not carry over into this first quarter of 2014. Did we do a good job preparing our clients (and ourselves) for this less positive trend? How are we going to report to our clients about their investment results and the impact on their financial goals and plans?

Looking forward, we know that markets are not certain and that there are both positive and negative items in the news that won’t make it clear how markets will perform over the next few months. Assuming we worked with our clients to get them to a good place with their financial plans, though, the lackluster market of the first quarter should not be a cause for concern. This quarter end is a good time to remind our clients of this fact as well as to remind them that we need to know about any changes in their lives and financial situations that might affect their plans and our advice.

If we were riding high on last year’s performance, this past quarter’s results should offer a good opportunity to continue to educate our clients about how market performance is but one factor – and not the controlling one – in achieving their financial goals. Clients not only need reassurance about their situation but to understand that a focus on market performance is misplaced and ultimately unsatisfying. As an adviser, you must know that well, since no-one can always beat the market and guess or predict the best investment choices. As a former colleague once said, you are only as good as your last bad performance. That’s a fact of human nature, you can do well many times, but make one bad choice and that is what people will remember.

In your client advice, as in your business, control the items you can control and understand which ones you cannot control. Take an approach that reduces uncertainty and risk and you and your clients will be happier. 

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