It’s important to speak with clients about the potential for market downturns in order to manage performance expectations — for both the client and advisor, says Philip Richmond of Richmond Goodman Wealth Management at Richardson GMP in Toronto.

Richmond and his business partner Douglas Goodman welcome market declines as an opportunity to remind clients that markets don’t always go up. They suggest that advisors can put their clients at ease by explaining the strategies that their advisors have put in place to protect their client’s capital.

Here are four tips on speaking with clients about market downturns:

1. Start the communication plan early
Richmond believes that if you effectively communicate your business strategy at the beginning of the client relationship, you’re much more likely to bring that relationship to a positive conclusion.

A successful client relationship begins the first time you meet with clients, adds Goodman. “That first meeting allows you to structure all future conversations in an unemotional manner, even when the markets get emotional,” he says.

The team at Richmond Goodman Wealth Management provide a presentation to all prospective clients to make sure clients understand exactly how their advisory team will react to various situations. “The client, therefore, can see consistency, and know we’re not using a shoot-from-the-hip approach,” Goodman adds. If you plant the seed early, clients will feel more secure in your ability to build their assets responsibly over the long-term.

2. Demonstrate consistency
Goodman and Richmond reiterate their bottom line across a range of marketing materials, such as blogs and newsletters. Their messaging is consistent: their priority is to safeguard their clients’ money.

Richmond suggests adding a visual component to presentations and marketing content so that clients will have an image to remember you by. Your goal should be to ensure that your clients’ hard-earned investments are safe and protected, so an image, like an umbrella, helps to convey that idea.

3. Revisit goals
Speaking with clients about a downturn in the market is also an opportunity to reiterate goals, says Richmond. Personalize what the market downturn means for your client, and frame the market drop in terms of their individualized investment policy statements and goals.

4. Provide a personal touch
Email and social media can lead to misunderstandings, says Richmond, who firmly believes in communicating personally with clients, either by phone or in person.

“It’s really important in tough times to build trust, and let clients know that they’re dealing with a human being,” Richmond says. More importantly, one-on-one conversations give you an opportunity to truly listen to what your clients are saying. If you don’t give your clients an opportunity to give feedback, then you can’t properly address their concerns, he adds.