I’ve been through enough market downturns with enough clients to know one thing with certainty: the call you dread most is the one you should have made before the client made it.
When markets crash, the adviser who calls first wins. Not wins in a competitive sense — wins for the client. Because the adviser who reaches out before the client’s anxiety peaks gets to set the frame. The one who waits for the client to call is already responding to panic, which is a much harder conversation to have.
This matters more than any technical skill an adviser possesses. 61% of investors leave their advisers due to breaches of trust rather than poor portfolio performance.(Source: AdvisorHub) Market downturns are not primarily an investment management challenge. They’re a communication challenge. And communication, more than performance, determines which clients stay.
What’s actually happening in the client’s head
Before we talk about what to say, it’s worth understanding what you’re dealing with.
Behavioural finance has documented this thoroughly: during a market crash, clients are not processing information rationally. Loss aversion — the well-established finding that losses feel roughly twice as painful as equivalent gains feel pleasurable — means that a 20% portfolio decline causes psychological distress that bears no relationship to the client’s actual financial position. The numbers don’t matter. The feeling does.
Research shows that when clients hear data during periods of emotional distress, their rational mind might accept the facts but their emotional brain isn’t fully convinced. A few days later, they may call again — still feeling unsure, or even ready to pull their investments altogether.
This is why the standard adviser response — data, historical context, long-term projections — often doesn’t work, even when the data is accurate and the client nods along. You’ve spoken to their rational mind. Their emotional mind, which is doing the actual decision-making in that moment, hasn’t been reached.
The sequence that works is: emotion first, reasoning second, logic third. Acknowledge what the client is feeling before you explain why they shouldn’t feel it. This isn’t therapy speak — it’s the prerequisite for the rational conversation you actually want to have.
The language that helps
There are specific things that work and specific things that don’t.
What works: naming what’s happening plainly. “Markets have fallen sharply. You’re probably watching your balance and feeling concerned. That’s entirely understandable.” You’re not pretending the situation is fine. You’re not catastrophising. You’re naming reality, which builds trust, and you’re normalising the client’s emotional response, which reduces their sense of isolation.
What works: returning to the plan. Not a lecture about the plan, but a brief, clear reminder that the current situation was anticipated. “This is exactly the kind of scenario we built your portfolio to withstand. Let me show you where you are against your goals.” The plan is your anchor. It’s also theirs. Connecting them back to it is connecting them back to the reasons they’re invested at all.
What works: context without minimising. “Since 1926, the S&P 500 has recovered from every correction — typically within months rather than years. We’ve planned for this.” Context matters. But it only lands after the emotional acknowledgement.
What doesn’t work: false reassurance. “Don’t worry, it’ll come back.” Clients have been told this before and watched portfolios decline further. The phrase produces the opposite of its intended effect.
What doesn’t work: overloading with data. Charts, tables, historical drawdown analysis — all valuable, but not in the first five minutes of a call with a frightened client. Information overload during emotional distress increases anxiety. Save the data for after the connection.
What doesn’t work: disappearing. The adviser who becomes harder to reach during a crash sends one unmistakable message: I’m not here when it matters. That message sticks for years.
The practical framework
Over twenty years, I’ve developed a simple framework for navigating these conversations.
Before the call, review the client’s position relative to their goals, not their peak portfolio value. The question that matters is not “how much have they lost from the top” but “are they still on track for what matters to them.” Most clients who feel financially ruined during a correction are not financially ruined. Getting clear on this before you call allows you to be genuinely reassuring rather than performatively so.
Open the call by asking, not telling. “How are you feeling about all of this?” sounds simple. It’s not trivial. Research on self-persuasion shows that when people actively participate in reasoning through a decision, they’re far more likely to believe it — and act on it — than if they were simply handed the information. (Source: Kitchen) The client who articulates their own concern, and then works through it with you, reaches a different conclusion than the one who is simply told what to think.
Clarify before you advise. Is the concern about the portfolio itself, or is it about a specific cash need? Is there a real liquidity event — a property purchase, school fees, a business commitment — that changes the picture? Most panic-driven requests to sell are not grounded in genuine liquidity needs. But occasionally they are, and you need to know.
Revisit decisions in writing, not on the call. If a client is inclined towards a significant change — reducing equity exposure, moving to cash — don’t execute it on the phone during the crisis. Suggest a 48-hour pause. “Let’s speak again in two days. If you still feel this way, we’ll review your strategy together.” More often than not, the impulse dissipates. The decisions that survive a brief cooling-off period are the ones worth making.
Follow up. A single call during a crash is not enough. Check back in. Repeat the key messages. Remind clients what their plan is for. Volatility that persists for weeks tests clients in a way that a single phone call cannot immunise against.
The real value proposition
Vanguard has estimated that the behavioural coaching a good adviser provides — simply preventing clients from making panic-driven decisions — adds roughly 1.5 percentage points of net return per year. Over a twenty-year relationship, that’s transformative. More than asset allocation. More than tax efficiency. More than investment selection.
The irony is that the value advisers add during market crashes is almost entirely invisible in the record. There’s no line on a performance report for “prevented panic selling in March 2020” or “talked client out of moving to cash in 2022.” The best outcomes are the ones where nothing happened — where the client stayed invested, the plan held, and the goals were met.
That’s the work. It doesn’t get celebrated. It doesn’t make headlines. But it shapes financial futures more powerfully than almost anything else an adviser does.
The next crash is coming. The best time to prepare for it is now.
