In February, Dave Stolz, CPA/PFS, was able to tell a delighted client that she had sufficient investment resources to retire. Two weeks later, the global stock markets began a roller-coaster ride that continues to this day, ravaging many retirement and other investment accounts. Stolz, however, was able to reassure his retiring client that nothing had changed, since her plan was based on assumptions about average returns over time.
In periods of stock market turmoil, CPAs may be contacted by clients who are anxious about the potential impact on their finances. Those anxieties may be magnified now, when market gyrations are driven by worries about the global economic impact of the coronavirus, a threat that’s not yet fully understood.
How can CPAs deal with client anxieties during a time of uncertainty? The best steps include preparing them for unexpected events before they happen and acknowledging their concerns.
Mark Astrinos, CPA/PFS, principal and founder of Libra Wealth in San Francisco, proactively educates clients while the market is up, so they are prepared when it takes a tumble, advising them to expect market swings and reaffirming the value of long-term planning. This ongoing education effort “is a mutual commitment throughout the duration of the relationship,” he said, and can include regular client progress meetings, email, phone calls, and sharing various educational resources.
As a result, his clients seem prepared to sit tight for the time being. The only questions he has received recently are about making new investments, he said. “They understand that when the market goes down, it’s not a time to sell, but a good opportunity to buy,” Astrinos said.
Stolz, president of Stolz & Associates in Tacoma, Wash., said that CPAs can also offer anxious clients some perspective by reminding them markets have bounced back from the Great Recession of 2008 and other crises, so any retrenchment isn’t necessarily irreversible.
Keep in touch
Even if clients aren’t calling you with their concerns, it’s still a good idea to reach out to them. Astrinos sent out a communication when the stock fluctuations began, reminding clients that the recent declines are less jarring in the context of a lengthy bull market and that they are built into the firm’s planning. “I also presented the downturns as a good time to make the most of tax loss harvesting and portfolio rebalancing, as appropriate,” he said. The communication received an overwhelmingly positive response, with many clients expressing thanks for his reassurance.
As health and market concerns escalated, Stolz and his team created a short video on the virus’s market impact, covering technical information and offering reassurance. “Even if people aren’t too nervous, they appreciate knowing that you’re here for them and you’re on top of the situation,” he said.
The communications that CPAs can provide “don’t have to be complex or technical,” Astrinos said. “Just short and sweet and thoughtful, a reminder that we’re working hard to support their future goals.”
Lend an ear
When CPAs do receive worried calls from clients, “it’s important to acknowledge their concerns,” Astrinos said. “You will alleviate their fears by being sensitive.”
Even amid busy season, “if you take a few minutes with a client who could use reassurance, it will go a long way,” Stolz said.
For more news and reporting on the coronavirus and how CPAs can handle challenges related to the outbreak, visit the JofA’s coronavirus resources page. Listen to this podcast on helping clients in a volatile market, featuring Lyle Benson, CPA/PFS, and Bob Keebler, CPA/PFS, courtesy of the Personal Financial Planning Section.
— Anita Dennis is a New Jersey-based freelance writer. To comment on this article or to suggest an idea for another article, contact Ken Tysiac, the JofA’s editorial director, at Kenneth.Tysiac@aicpa-cima.com.