2024 has been a year of elections. The World Economic Forum reports that around the globe, more than 2 billion voters were predicted to visit the polls in this year alone.
Perhaps the biggest political events of the year have been the general elections in both the UK and US. Happening on 4 July and 5 November respectively, the outcomes of these elections are likely to have an impact on the economic landscapes of several countries going forward, along with influencing market movements.
The most recent example of this was Rachel Reeves’ Autumn Budget, in which she put several tax levies into place that could affect your clients’ wealth.
And, after Donald Trump was elected as the 47th President of the United States, your clients might wonder how his presidency may affect the value of their investments in the years to come.
The presence of these political anxieties means that as an IFA, your role is more important than ever. Along with managing your clients’ wealth, your input could help to assuage their worries and encourage them to make informed decisions.
Keep reading to discover how to soothe your clients’ political anxieties and why this matters.
Build a communicative bond with your clients
Although your clients might currently have politics on their minds, life is full of ups and downs. Come the new year, a different event might be all they think about – be it a personal event like a divorce, or something in the news that clouds their thinking.
So, remember that being able to soothe your clients’ worries goes beyond Rachel Reeves or Donald Trump. Look deeper, and you’ll realise that forming a long-term, trusting bond with your clients is essential to tackle any obstacle that comes their way.
You can start building this relationship today by:
- Sending regular email communications that reassure your clients
- Taking the time to learn about them as a person, their family history, and their all-important goals
- Being available for a chat when your clients need it, even if it’s just for five minutes on the phone
- Making it clear that their best interests come above your fiscal objectives.
Of course, you’ll have implemented many of these tips in line with Consumer Duty in the last year or so. But beyond meeting these all-important regulations, there lies another incredible benefit: earning the ongoing trust of your clients.
Remind your clients that market turbulence is par for the course
You’ll be aware that throughout the last 50 or so years, market turbulence has been near constant. But your clients, faced with market volatility as a result of world events, could feel overwhelmed and forget that short-term fluctuations are entirely normal.
Moreover, when you talk with your clients, it could be useful to demonstrate how previous world events have had an impact on markets – and crucially, how markets have always recovered in the past.
Take a look at this graph representing the performance of the US S&P 500, for example.
Source: Macrotrends
As you can see, the index has experienced a journey of highs and lows but follows an overall upward trend. The X axis shows the years between 1927 and 2024, and the Y axis demonstrates the share price. Showing your clients graphs like this one could put their mind at ease if they’re worrying about the value of their investments rising and falling.
Crucially, a short conversation with some visuals to demonstrate your point could save your clients from potentially making costly errors where their investments are concerned. Panic-selling, de-risking, or moving investments last-minute could potentially be detrimental to your clients’ progress, and you could be the key influence that helps to prevent their wealth from coming to harm in this way.
Be specific about how you can help
If a client comes to you with issues that are keeping them up at night, it’s easy to dismiss the severity of their worries and brush them off with a few platitudes.
However, this could frustrate your client further, making them feel dismissed. To avoid this outcome, remember to be specific about how you can help.
Imagine your client approaches you about their estate plan, having learned that Inheritance Tax (IHT) nil-rate bands were frozen until 2030 in the Budget, and pensions are set to be included starting in 2027. They’re worried that their children will inherit less than planned.
Here, you have the opportunity to demonstrate your skills as an IFA and comfort your client. You could respond with ideas about how to reduce the value of their estate over time, such as forming a gifting strategy. And, you could open up the floor to questions from their beneficiaries about how the new rules might affect their inheritance.
Simple actions like these may make your client feel seen, heard, and valued.
Keep your clients’ eyes on the prize
Clients who become easily bogged down in the here and now might be more likely to make rash choices when they watch the news, scroll on social media, or talk to friends and family about politics and world events.
If you know your clients tend to do this, make sure to remind them that their ultimate goals are still achievable. Although their financial plan may need a tweak or two following the Budget, for example, most clients will still be on track to meet their goals and live the life they want.
Keeping their eyes on the ultimate prize could make clients feel less anxious about short-term events that affect their wealth.
Become part of a growing network of independent advisers
Here at Corbel Partners, our mission is to ensure that advisers have the time, space, and resources to connect with their clients and form long-term relationships.
If you’re not a part of our network already and would like to learn more about the benefits of joining us, get in touch today.
Email hello@corbelpartners.co.uk or call 01925 637891.
Please note
This article is for general information only and does not constitute advice.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate estate planning or tax planning.
The value of an investment (and any income from them) can go down as well as up and investors may not get back the full amount they invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with an investor’s overall attitude to risk and financial circumstances.
