How an Independent Financial Advisor Can Take Advantage of Market Volatility

The Independent Financial Advisor and Market VolatilityLook on the Bright Side: How an Independent Financial Advisor Can Take Advantage of Market Volatility

As the saying goes, we’re supposed to start the New Year with a bang—well at least the right kind of bang. But at the very start of the 2016 financial trading year[1], the only thing booming was the sound of leftover, half-price fireworks being set off in the streets—because the stock market certainly wasn’t booming. To say that the major indexes got off to a bumpy start in 2016 would be the understatement of: not the year…not the decade…not even a lifetime. In actuality, it would be the understatement of market history. Read it and weep, because it’s true: in January 2016, the stock market suffered its worst opening EVER to a new year, with the major indexes falling by more than 10 percent over the first two weeks of the trading year[2], briefly putting the market into correction[3] territory. While that staggering, plunging loss was reigned in to 5 percent by the end of January, February has also been worryingly tumultuous—with that loss rate figure ping-ponging back and forth between a 5 and 10 percent range over the course of this month.[4] So what’s an independent financial advisor to do in this turbulent market economy?

As every independent financial advisor is probably experiencing right now, the phone is ringing off the hook, angry and worried client emails are coming in faster than your computer can process them, and your clients are highly emotional and scared, often suggesting impulsive, uninformed, and emotionally-based (rather than fact-based) options. Unless you are a true adrenaline junkie with the disposition of a hostage negotiator, it’s certainly not the most “fun” time to be an independent financial advisor; but that doesn’t mean it can’t be an effective and productive time to be one. If you choose to rotate your perspective 180 and look at the bright side/the glass half-full, you’d be able to see that you can actually take advantage of this current market volatility.

The following is a non-exhaustive list to tips to help you refocus the plunging, chaotic market into something productive for your business:

  • It’s all about reframing. Instead of panicking or viewing the bear market as a 100 percent negative thing, think about the sense of accomplishment you may get through helping your clients through these difficult times. Remember, this is when you are needed most. This is your final inning in Game 7 of the World Series—it’s your time to shine through the cloudy financial forecast. Practice what you’ve been preaching. Take action and take control. Your clients—your team—is depending on you be the captain here.
  • After all, your advice is most needed (and thus most valuable) when times are rough. When the market is tumbling, it’s your prime time to share you time-tested and hard-earned wisdom with your clients.
  • By hand-holding and helping your clients weather the storm, they will see your true value and increase their trust and rapport with you. Use this tumultuous time to strengthen your relationships with your clients. This can most certainly lead to more referrals and the ultimate expansion of your business in the future.
  • During such times of market volatility, you’re constantly reaching out to clients and talking about potential lines of actions. This constant topic of conversation can really force you to analyze your own investment convictions and take a step back to discern what you did right and what you did wrong on past investment choices during previous times of market corrections. Then hopefully, you can apply this “been there/done that/seen this” bevy of knowledge toward helping your clients make the right decisions in this volatile market.
  • While they are definitely not the easiest and most pleasant of conversations and client meetings, remember that you have likely significantly increased the amount of your day spent on client-facing activities. As discussed in more depth in the previously published Summit blog “Independent Advisors Need to Focus on More Client-Facing Activities”, you should do everything you can to boost the amount of client-facing activities you partake in at your business. After all, client-facing activities are what will ultimately maximize your clients’ satisfaction, increase your client retention rates, and boost your business to its full potential.
  • Also, there is nothing like crisis mode to fine-tune your effective communication skills. And with every client calling you, emailing you, texting you, meeting with you, and even sitting outside your office door trying to get a word in with you, you’ll have plenty of practice.
  • Instead of mouth-agape gawking at the crazy markets, help your clients reframe and put the recent downturn into perspective. In a lifetime financial planning context, this bad news market with a 5 to 10 percent loss is small in the greater scheme of things. The challenge of this temporary loss is small when compared to the huge, lifetime challenge of putting an all-weather financial plan in place and planning your financial life in a way that will see you through retirement. We’re talking two difficult market months out of the next 20, 40, 60, even 80 years of your life. Make sure to hone this point in to your worried clients who are having great difficulty seeing past the short-term.
  • The advice you’ve been giving to clients all along—for example, to maintain an emergency fund, be conservative about investment return expectations, keep sharp eyes on fees and taxes and their constantly changing ways—has all of a sudden become more poignant. Now, it will be given the intense focus it has deserved all along.

Whether the market is bull-ish or bear-ish, sinking or surging, static or chaotic—when you join forces as an independent financial advisor with independent broker dealer Summit Brokerage Services, you’ll never have to go at it alone. Voted as the number one boutique independent broker dealer firm in the country, you can feel confident that we are 100 percent dedicated to providing you with accurate and timely solutions to your business needs so you can focus on the needs of your clients. Remember, we are in the business of your success! For more information, visit or contact us at (800) 354-5528.


For more information on Summit Brokerage Services, visit or contact us at (800) 354-5528. Let Summit Brokerage Services show you why they are ranked the No. 1 Independent Boutique Broker Dealer in the Country.

Summit Brokerage Services is part of Cetera Financial Group, RCS Capital Corporation’s (NYSE: RCAP) retail investment advice platform.

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[1] The stock markets began the 2016 trading year on Monday, January 4, 2016 after the New Year’s Day holiday  (1/1/16) and the weekend (1/2 – 1/3/16).


[3] As explained by CNBC, a “correction” is “a decline or downward movement of a stock, or a bond, or a commodity or market index. The amount of the decline is at least 10 percent and a true correction exceeds that amount. In short, corrections are price declines that stop an upward trend.” See


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