In a crisis, financial advisers also need a hand

Star Tribune (Minneapolis) (MCT) - Brian Wagenbach, Minneapolis branch manager with investment firm Charles Schwab, thinks his hairline has receded a good 2 inches since the summer.

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"It's an awful time," said Wagenbach.

With the Dow Jones industrial average down 37 percent from its October 2007 peak, advisers across Minnesota and the nation have been spending their days consoling clients, keeping tabs on the latest news from Wall Street and crossing their fingers that the worst is over.

But who's advising the advisers when the fear and worry creep in?

From hourly conference calls to weekend pep talks, financial services firms and professional organizations have been busy helping their advisers to keep calm _ so they can keep the clients they have and perhaps attract new ones.

That's meant long days and a lot of phone time for most local professionals.

"The time we're in is really when (advisers) earn their pay," said John Greiber, vice president of Ameriprise Financial.

He recently conducted a calling campaign where he and his staff contacted the 1,130 advisers on his team in five days to "reinforce with them the messages they need to communicate with clients" such as sticking with the financial plan unless their goals have changed. The concern is that the noise coming from cable TV market news and the Web will drown out common sense.

Alex Barned, market area manager for UBS Wealth Management, spent last Sunday morning at work, checking with advisers to make sure they have what they need. In addition to going over specific client situations, Barned asked them how they're personally dealing with the market's moves. Advisers are also investors, after all, and it's tough to counsel a client to stick with the plan if the professional has lost faith in the model.

That's why financial adviser Rick Epple tries to stay cool.

"That's not to say I don't feel stress ... I'm in the same boat, my accounts are going down as my clients' are, so I certainly feel that way, but want to remain positive," he said.

Part of an adviser's job, said financial services consultant John Comer, is to keep the faith in the market, because "there's nothing holding things up except people believing things are going to be OK."

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Most local financial companies _ Ameriprise Financial, Thrivent Financial for Lutherans, and UBS Wealth Management among them _ have beefed up their market commentary so advisers counseling clients can discuss the news of the day with confidence.

For example, UBS has a regular morning conference call that takes listeners from the floor of the New York Stock Exchange for perspective from a trader to the company's offices in Asia and London for a global opinion on the credit crisis.

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Recently, insurance company Securian held a telecast detailing its financial situation for advisers, who after the fate of big insurance company AIG, want to be able "to say (our company) is financially sound" when suggesting products it underwrites, said spokeswoman Maggie Jensen.

Professional groups have added resources for advisers too. The Financial Planning Association, for example, held two conference calls recently addressing all sides of the financial crisis, including how to best serve clients. Chat rooms at the National Association for Personal Financial Advisers are buzzing with questions and solutions from peers.

These resources are critical, said Schwab's Wagenbach.

"You can confidently talk to clients when you feel you've got some information that has value," he said. "The client doesn't want to hear 'just stay the course.'" Wagenbach urges his team to get specific, explaining the new FDIC limits and money-market safety if it applies to a client's situation, and reevaluating their risk tolerance. That way, clients won't feel like a number _ and won't be so quick to blame the adviser for their losses and end the relationship.

If market losses continue, financial advisers would be wise to talk to Susanne Jones, University of Minnesota communication studies professor, whose research area is "comfort communications," or dealing with sensitive topics. In a business such as financial advising, which relies upon ongoing relationships to maximize profits, Jones said the adviser should listen and ask questions such as "what concerns you right now?" and "how do you feel?"

Don't play defense. "If they become defensive, the customer becomes more anxious and feels alone," she said. Instead, empathize with the client, which shouldn't be tough for any adviser who eats his own cooking.

Fidgeting and avoiding eye contact also give the impression that the situation is not good. So as hard as it may be, Jones says it's critical for advisers to relax, which in turn may relax clients. "We're like a flock of birds; we adapt to each other's behavior."

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© 2008, Star Tribune (Minneapolis)