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Markets and Economy: Last Week in Review

US stocks were on a roller coaster ride last week. The S&P 500 Index fell sharply the previous Monday morning, recovered some of its losses by close on Tuesday, dropped even further Wednesday, then climbed back up Thursday, before finishing down by 4.3% on Friday and 15% lower for its worst one-week decline since 2008. The S&P 500 has lost roughly 30% from its February 19 peak.

It’s clear, at least for the time being, that this type of substantial volatility is part of the new normal for investors: A new normal filled with uncertainty about the scope of the COVID-19 crisis and our response to it, with unemployment filings skyrocketing to possibly the highest levels on record, and a social restructuring of how we work, shop, go to school, and take care of our families.

As the financial media focuses on the shrinking American economy and the daily and weekly fluctuations of the S&P, Dow Jones Industrial Average (DJIA), and NASDAQ indexes, we continue to take the long view and remember that while markets are designed to handle uncertainty, to reassess expectations for the future in real time, and to price-in risk, they tend to have a habit of behaving unpredictably in the short run.

Let’s take a look at a recent period of the market’s performance.

Stock Market Performance Chart 1

Past performance may not be indicative of future results. Indexes are not available for direct investment.

We see that the past few years have not been devoid of market pullbacks or volatility. If you removed the Y-axis and zoomed in, the ups-and-downs of short-term volatility would look even flatter. But as long-term investors, “zooming in” on a particular date or time period in the market’s history is the wrong approach. Here is the eagle-eye view of the market’s performance over the past 60 years.

Stock Market Performance Chart 2

Past performance may not be indicative of future results. Indexes are not available for direct investment.

Most recently, in 2008, the stock market was nearly halved in value. At the height of the Great Recession, it was likely pretty difficult to foresee a full recovery that would transform into an 11-year bull market. That doesn’t mean it was a smooth ride — after all, volatility is a completely normal part of investing.

Stock Market Performance Chart 3

Past performance may not be indicative of future results. Indexes are not available for direct investment.

Since 1980, the average year’s market performance experienced large intra-year declines while growing overall:

• The average year saw a stock market drop of -13.5%.
• Despite that, most years still ended in positive territory, averaging 9% gains.

When pundits and talking heads discuss market pullbacks, corrections, and recessions, they rarely give context for the inverse. “When’s the last time this happened?” is the wrong question to ask; rather, we should ask, “How have the markets typically responded to these events throughout history?” That’s not to speculate that we know or can guess how the current COVID-19 crisis will unfold, but as we mentioned in our last letter, we’ve gone through unprecedented crises in the modern era — the dot-com crash, 9/11, and the 2008 financial crisis among them.

We will not know the true economic and market impact of the COVID-19 crisis for some time. Historically, though, we’ve experienced two dozen stock market corrections since World War II, with the average correction taking the market down -14.3% from peak to trough and the average recovery taking only four months.

Market Corrections and Recoveries

Past performance may not be indicative of future results. Indexes are not available for direct investment.

Meanwhile, if performance does remain in pullback territory (drops of 20% or worse), we can see that the average bear market experiences a drop of -35.8% from peak to trough, with the average recovery taking a little more than two years.

Stock Market Performance Chart 4

Past performance may not be indicative of future results. Indexes are not available for direct investment.

There are investors out there who hear the financial media or the political spin and want to react immediately. They will feel the urge to “wait for the bottom” or the start of a recovery. But timing the market doesn’t work. Here’s what it looks like to hypothetically miss the best market days over the past 25 years, using the S&P 500 Index as a baseline.

Stock Market Performance Chart 5

Past performance may not be indicative of future results. Indexes are not available for direct investment.

So, What Can We Control?

We know that timing the market doesn’t work, and that we can’t possibly predict what the future holds. We don’t know for certain how long the COVID-19 crisis will last, and we don’t know how the market will react to negative — or positive — news that arises from it.

Emotions are high, anxiety is prevalent, fear is palpable — these are all normal feelings. But there is a solution to ease the mental toll of the unknown, especially when it comes to your financial picture. Remember that the following factors are within your control:

Fees and Trading Costs: Excessive trading and turnover can result in hefty fees that could have a major impact on your ability to sustain long-term investment growth — growth that is necessary to achieving your goals, whether that’s living comfortably in retirement or funding a college education for your children. So, when you are tempted to move in and out of positions to try and capture the elusive “alpha,” just don’t do it; the costs outweigh the potential short-term reward.

Expense Ratios: You likely already know that mutual funds and exchange-traded funds (ETFs) come with a wide variety of costs, which affect the net return on your investment. The expense ratio is one of those costs, and it can give you a very clear idea of what you can expect to pay for an investment strategy. It’s crucial that you pay attention to these costs regularly, as even the smallest increase can actually have a significant impact on your investment growth over time.

Tax-Loss Harvesting and Rebalancing: Tax-loss harvesting is the silver lining of market volatility. Working in tandem with your financial or investment advisor, you can “harvest” investments to sell at a loss, and then use that loss to lower your tax bill for the gains you accrued over the course of the year. This is also the perfect time to rebalance your portfolio back to your target allocation or desired level of risk. Both of these strategies are proactive and will help you work toward the goals that are outlined in your financial plan, regardless of what’s happening in the markets.

Outside of your investment portfolio, you can also retain control over your financial life by choosing to partner with a fee-only, fiduciary financial advisor who prioritizes the importance of financial planning as part of a comprehensive wealth management strategy. Remember that you are investing for goals that are 10, 20, and 30 years into the future. Long-term investors don’t preoccupy themselves with short-term market movements because they know that they can rely on time-tested principles. These principles — coupled with staples like ample diversification and an asset allocation that reflects your risk tolerance and time horizon — will help you achieve a rewarding investment experience, even if it feels like the world around you is uncertain.

Moving on From the Markets: What’s Happening on the Policy Front?

The federal government is working around the clock to help stem the tide of financial panic caused by the COVID-19 crisis. Here is a brief overview of the political and policy responses we saw last week:

The Stimulus Bill

Last Wednesday, President Trump signed into law “phase two” of the COVID-19 stimulus package, which provides free testing for everyone (including the uninsured), expands unemployment benefits, and provides two weeks of emergency paid sick leave for many workers who are being tested or treated for the virus.

On Friday, “phase three” of the stimulus package was introduced to the Senate by Senate Majority Leader Mitch McConnell. The package, which is estimated to top $1 trillion, would give $1,200 to most individuals who made less than $75,000 in adjusted gross income (AGI) on their 2018 tax returns, or $2,400 for any married couple who made less than a combined $150,000 in AGI. An additional $500 would be included for every child within a family. These payments gradually would scale down for individuals with an AGI between $75,000 and $99,000. Individuals who earn more than $99,000 and married couples who earn more than $198,000 would not be eligible for any direct assistance.

McConnell says that these direct payments “would provide some extra certainty in this uniquely uncertain time.” The package would also provide industry-specific bailouts — $50 billion in loans for airlines, $8 billion for cargo air carriers, and $150 billion for hotels, casinos, and other large businesses. It would also provide $300 billion in loans for small businesses.

The proposed package currently faces opposition from both Congressional Republicans and Democrats.

IRS Tax Deadline Extended

After previously announcing that the tax-filing deadline for 2019 returns would not be extended, Treasury Secretary Steven Mnuchin reversed course last Friday and announced that the filing date would be pushed back 90 days — from April 15 to July 15.

The move, which applies to all individuals and corporations, is good news for those who traditionally owe money, allowing them to retain additional liquidity for the next several months.

Secretary Mnuchin is encouraging “all taxpayers who may have tax refunds to file now to get your money.”

Federal Reserve Rate Cut

Last week, the Federal Reserve slashed interest rates by a full percentage point — the largest in Fed history. This reduction, which is intended to entice borrowers and jump-start spending, puts the rate somewhere between 0% and 0.25%.

Key Personal Takeaways

During this time period, it’s important to practice caution and due diligence when seeking help or support networks, as these types of conditions unfortunately bring out people who may not be acting with the best intentions. Watch out for so-called “advisors” who are selling or pushing products that guarantee protection against market volatility or have a history of high fees (think structured notes or hedge funds), as these claims are often too good to be true. If you are looking for a financial advisor for the first time during this climate, rely on trusted resources such as the National Association of Personal Financial Advisors (NAPFA) or Financial Planning Association (FPA) databases, which can help you find reputable advisors who are also fiduciaries.

Coronavirus-related scams are also on the rise right now, with many identity thieves, phishers, and other fraudsters looking to capitalize on the panic and fear surrounding the pandemic. Last week, the Better Business Bureau® notified consumers of a text message scam that has recently cropped up, in which the texter sends a malicious link offering money for groceries. The link draws users to a website that can steal their email address, password and credit card number, among other sensitive data.

Other states like Nevada have received reports of thieves visiting people’s homes to offer fake at-home test kits and even cleaning products claiming to expunge COVID-19.

Be extra vigilant and wary of any recommendation that has not been verified by the CDC or the WHO. A healthy dose of skepticism can go a long way toward protecting you and your loved ones.

What We Can Do to Flatten the Curve

Beyond the market impact and policy decisions, it’s important to recognize the real, human cost that this pandemic is causing to our neighbors domestic and abroad. We must continue to prioritize the health and safety of our families, friends, loved ones, and community members by practicing social distancing and following the guidelines laid out by the CDC and WHO.

We can assume that there will be periods of volatility moving forward and that more changes are in store on the economic and policy fronts. We are committed to updating you on the factors that impact you and your clients’ day-to-day life and financial situations. If you have any questions or simply would like to discuss some of your concerns about our current environment, please contact us.

The foregoing content reflects the opinions of Equita Financial Network, Inc. and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indexes are not available for direct investment. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful, or that markets will recover or react as they have in the past.

The S&P 500 is a market capitalization-weighted index that tracks the 500 largest companies listed on the New York Stock Exchange or NASDAQ Composite. It is used as a benchmark of the overall stock market’s performance.

Return data represent past performance and are not indicative of future results. Historical performance does not reflect applicable transaction, management or other applicable fees as noted, the incurrence of which would decrease hypothetical, historical returns.

Source for all charts and text contained within graphics: © 2020 Clearnomics, Inc. All Rights Reserved. The information contained herein is proprietary to Clearnomics and/or its content providers and may not be copied or distributed. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information and opinions contained herein. All reports, charts and graphics compiled by Clearnomics or any of its affiliated websites, applications or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and any commentary for any and all markets should not be construed as a recommendation to buy, sell or hold any security – including mutual funds, exchange traded funds or company stock.

The Benefits of Hindsight

2020 has already been challenging on both the national and global stages. The Coronavirus pandemic has quickly sent the world into a state of panic and fear, as businesses and schools shutter their doors, and government agencies advise “social distancing” to prevent the spread of the virus community-wide. It is clear that we are dealing with a health crisis of vast scale and proportion. Our thoughts go out to the families whose lives have been completely upturned by this virus, and to the health care professionals who are on the front lines. Our nation’s health, safety, and well-being are of the utmost importance at this moment, and we hope that developments coming from Washington and the Federal Reserve this week can help ease the burden for those who have been most affected.

Between the pandemic and other geopolitical tensions, such as the recent oil price dispute between Russia and Saudi Arabia, the markets have also been on a rollercoaster ride, with each day bringing more uncertainty. The headlines tell us that we are living in an unprecedented time.

For some of us, it seems like only yesterday that it was 2008, when the stock market dropped in value by almost half. Being a decade removed from the crisis may make it easier to take the past in stride. The eventual rebound and subsequent years of double-digit gains have also helped in this regard. But while the events of the crisis were unfolding, a bright future looked anything but certain.

During that time period, we were used to seeing front-page headlines that read, “Worst Crisis Since the ’30s, With No End Yet in Sight;” “Markets in Disarray as Lending Locks Up;” and “For Stocks, It’s the Worst Single-Day Drop in Two Decades.” For many of us, both investors and advisors alike, simple acts such as reading the news, opening up quarterly statements, or going online to check an account balance were nerve-wracking, dread-filled experiences.

Of course, we know that being an investor today, and during any period, isn’t exactly a stress-free experience. But the feelings of panic and fear felt by many during the financial crisis were distinctly acute. Many investors reacted emotionally to these developments. Some decided they had enough and sold out of stocks altogether.

On the other hand, some investors decided to stay the course and stick to their investment strategy, while chaos and panic-selling ensued. These investors eventually recovered from the crisis and benefited from the subsequent rebound in the markets.

We’re facing a similar moment in history now. It is important to remember that the financial crisis of 2008 was not the first in which periods of substantial volatility have occurred. In the chart below, you will see the performance of a balanced investment strategy following several crises, including the bankruptcy of Lehman Brothers in September of 2008, which took place in the middle of the financial crisis. Each event is labeled with the month and year that it occurred or peaked.

If you had a globally diversified and balanced investment strategy, you would have suffered losses immediately following most of these events — but the financial markets did recover, and you would have recovered along with them, as you can see by the three- and five-year cumulative returns shown above.

Before we are faced with periods of discomfort, it’s essential that we prepare ourselves with a long-term perspective, appropriate diversification, and an asset allocation that aligns with our risk tolerance and goals — these tools help us remain disciplined enough to ride out the bumps along the way. As your financial advisor, we also play a critical role in helping you work through these issues and in counseling you when things look bleak.

As we mentioned earlier, there is no questioning the emotional, physical, and mental toll that the Coronavirus pandemic has caused, particularly for those with family members and loved ones affected by the virus. While we participate in social distancing, maintain strong personal hygiene, and follow the guidelines outlined by the CDC and WHO, it’s important to “keep calm, and carry on.”

We must apply the same mindset to the financial markets. Predicting future events in the markets correctly — let alone predicting how the markets will react to them — is difficult to do. However, what is certain is that market volatility will always be a part of investing. To enjoy the benefit of higher potential returns, investors must actually stay invested long enough to see the other side of the storm.

The foregoing content reflects the opinions of Equita Financial Network, Inc. and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.

Equita’s Favorite Financial Podcasts and Books

At Equita Financial Networkwe’re constantly sharing resources, advice, inspiration, and support so we can run our firms better and succeed. So when we told our member firms that we wanted to write a blog post about the best reads and listens on finance, business, leadership, and creativity, they jumped on board and sent us their recommendations.  

If you’re looking for your next weekend read or podcast for your daily commute, look no further than the tried-and-true list below, approved and curated by our Equita Financial Network communityHappy reading/listening!

Podcasts:  

  • Eye On The Market J.P. Morgan, hosted by Michael Cembalest 
  • Odd Lots  Bloomberg, hosted by Joe Weisenthal and Tracy Alloway 
  • Masters in Business — Bloomberg, hosted by Barry Ritholtz 
  • Planet Money — NPR, hosted by Amanda Aronczyk, Mary Childs, Karen Duffin, Jacob Goldstein, Sarah Gonzalez, and Kenny Malone 
  • Secrets of Wealthy Women —The Wall Street Journal, hosted by Veronica Dagher 

Books: 

Websites: 

TED Talks: 

Do you have any favorite podcasts, books, websites, or other resources that didn’t make this list? Let us know! We love receiving recommendations from our community. 

Ways We Can Fight for Gender Equality This International Women’s Day 

This March 8th is International Women’s Day (IWD), a “global day celebrating the social, economic, cultural, and political achievements of women — while also marking a call to action for accelerating gender equality.” This year’s IWD theme is #EachforEqual.

How We Can Promote Gender Equality in Business 

When you think about how to lead the charge for gender equality in your own business, take a page from these suggestions compiled by UN Women:

Fight for an equal work culture

  • Fight for equal representation of women in leadership and boardrooms, equal pay for work of equal value, and education courses on gender equality. 

Push for ways to make professional life easier for parents

  • Advocate for strong parental leave policies. Fathers should also take parental leave when it’s available to destigmatize the issue.
  • Offer reentry programs for stay-at-home parents to make it easier for them to rejoin the workforce. 
  • Offer flexible work schedules. 
  • Provide mentors or advocates in their profession. 
  • Teach negotiation skills and other skills that professionals need to succeed. See Bridget’s recent article in Advisor Perspectives on the importance of negotiating.

Combat sexism and harassment

  • Speak up when you see inappropriate behavior and get help from others, especially if it’s an unsafe situation.

Support gender-equitable companies and causes, and shop responsibly

  • Check out Equileap’s annual list of the world’s 100 most gender-equitable companies, based on the Women’s Empowerment Principles. Here’s their 2019 report. 
  • Pick a gender equality topic you care about and find a group or campaign dedicated to it. No step is too small — attend a townhall meeting, share a news article, and if you can’t find a group working on your issue, consider starting one.

Challenge gender stereotypes early

  • Encourage girls to speak out and assert themselves. Fight toxic gender stereotypes that discourage boys from expressing their feelings and communicating openly.

Support Women on IWD and Beyond 

As the International Women’s Day website states, equality is not a women’s issue — it’s a business issue. Gender equality is essential for economies and communities to thrive. 

The fight for gender equality is a year-long mission, not just a one-day event. Let us know how you’re supporting women and fighting for equality — in boardrooms, government, media coverage, workplaces, sports coverage, health, and wealth.

Top Resources You Need to Succeed as a Financial Planning Firm

When you first launch a company, you’re siloed: You’re going through this exciting — but isolating — experience, and your friends and family might not be able to relate or give the advice you need.

That’s why it’s so important to have a support group of like-minded professionals. Having someone to bounce ideas off of, to share ideas with, to lean on, to celebrate the highs and commiserate the lows with, makes running a company so much easier.

When Katie Burke and I launched our own financial planning firms around the same time, hers in 2015 and mine in 2016, we became each other’s support system. Even though I’m in California and Katie’s in Pennsylvania, our weekly calls and email exchanges made a world of a difference. We all know we need the standard resources to run a business, but we often forget how much we need community to succeed.

The Seven Resources All Female Founders Need 

As two female founders, we’ve discovered that the following seven resources are essential to successfully running firm. 

 1. Business Coaching

To grow your firm, stay on track, and stay accountable, consider investing in a business coach. Your coach can provide the outside perspective, expertise, tools, and training you need to keep operations humming smoothly, while growing into the future. They can also answer the business questions that keep you up at night, from hiring to cash flow. 

 2. A Support Network

When running a company, you don’t only need funding (financial capital) and skills training (human capital) — you also need “social capital” in the form of powerful support networks. Whether it’s a formal network of finance professionals or an informal support group of entrepreneurs, find your tribe who’s there for you.

3. Efficient Technology

A solid technology infrastructure is crucial to the long-term sustainability of your business, and to the service you provide your clients. Some of the technology you will want to have in place for you and your clients include a CRM system, streamlined billing features, a financial planning software subscription, electronic client invoicing, and 24/7 IT and tech support. 

4. Marketing

To build brand awareness and scale your business, you will want to hire a marketing coach or consultant. This person serves as an outside advisor that supports you in creating a marketing plan, developing and implementing marketing strategies, defining your business’s brand voice and message, and ensuring you are promoting your business to the appropriate target market of potential clients. 

5. Compliance Coverage

The compliance process can be time-consuming, leaving you little time to focus on other areas of the business. You will want to hire someone to do compliance oversight for registration, compliance documents, marketing, and more.

6. Errors and Omissions (E&O) Insurance

You will need robust E&O insurance that covers the biggest claim issues in the industry, such as cybersecurity and wire fraud. 

7. Portfolio Management Solution

You will need access to portfolio management resources, portfolio implementation support, and custodial relationships to help support the service you provide to your clients.

Join Equita Financial Network Today

At Equita Financial Network, we provide quality resources that allow for the best financial planning, the best portfolio management, and the best coaching and growth for each woman’s autonomous brand. If you’re interested in joining our network, reach out to us today. 

Why Community Matters 

There are countless studies and statistics out there on the benefits of having a strong support network, but today, we’d like to talk about why community matters coming from our own personal experiences. 

Why Community Matters to Equita Co-Founder Katie Burke 

The story of why I left my previous job and started my own planning firm, Method Financial Planning, is a story I hear again and again from other women in our industry: you work incredibly hard for a decade working your way up the ladder, but you still find yourself underpaid and unacknowledged. The environment is so unwelcoming and toxic that you have to leave the industry altogether, go to another firm hoping it will get better, or launch your own firm.

It is crazy how similar so many of our experiences are because when it is happening to you, you cannot imagine there are others going through the same thing. But so many women financial planners are having the same experience. They just don’t have a place where they can talk about it, and they don’t know what they can do to change it.

It is crazy how similar so many of our experiences are because when it is happening to you, you cannot imagine there are others going through the same thing. But so many women financial planners are having the same experience. They just don’t have a place where they can talk about it, and they don’t know what they can do to change it.

I launched my own firm in 2015, moved out of San Diego, and moved back to the East Coast, where my family is from. I was so jaded by my prior experiences in the industry that at first, I welcomed the quiet and the pace of doing it all myself. Fast forward a couple of years in after meeting Bridget Grimes, who was also in financial planning, and I realized there was a better way of working.

Bridget, who I had met in San Diego through business, reached out to me after hearing I had launched my own firm. She was doing the same, and she said she’d love to hear about my experiences. I of course said, “Yes!” I couldn’t wait to hear other stories of women branching out on their own.

As we continued to work with each other, Bridget and I decided to co-found Equita Financial NetworkEquita is a way for like-minded women to not only share resources and run the business they want for less expense than they would pay on their own, but also to share ideas on everything from best practices to help with questions regarding client issues.

Running two businesses can be challenging, but having a support system makes it so much easier. We’re all doing our own thing all day long; we’re focused on our businesses, but we’re there to help and support each other and keep each other accountable.

Why Community Matters to Equita Co-Founder Bridget Grimes 

Like many women in financial planning, I found myself grossly underpaid relative to my male peers, unable to negotiate more for myself regardless of my attempts, told I was too aggressive and too ambitious, and eventually realized that moving to another firm would just be more of the same. I had no mentors, no advocates. 

I wanted to get paid what I was worth, and to have the flexibility to spend time with my family without sacrificing my client service. I wanted to build a thriving, successful practice, but working more wasn’t rewarded. In the end, I could not find a firm that would afford any of this. After extensive due diligence, I realized I had to launch my own firm. 

In 2016, I launched WealthChoice. It was one of the most nervewracking things I have ever done. To go from having a consistent paycheck to nothing, to walk out the door into the complete unknown financially, is incredibly stressful. I had two kids, one who was in college and the other in high school, a large mortgage, and plenty of financial obligations. While I had remarried several years before, my income was critical to the financial security of my family. I can see why women in my situation — a very common situation for women in our industry — decide to either leave the industry, or stay as marginalized employees. However, one year after making the decision to launch, I walked out the door to my own firm. I remember thinking, “I wish I had the guts to do this years ago.”

I reached out to Katie Burke, who had also recently launched her own firm. I knew of Katie from working with her in the financial planning industry in San Diego. Katie and I became sounding boards for one another — we shared wins, best practices, financial planning solutions, and challenges. We had what few womenled planning firms had: a network of others just like ourselves. 

Katie and I became sounding boards for one another — we shared wins, best practices, financial planning solutions, and challenges. We had what few womenled planning firms had: a network of others just like ourselves. 

After years of working with each other, we built Equita so other women could also have the resources and support network to run their own firms and be successful at it.

Want to Join Equita’s Network? Reach Out to Us Today 

We want women to not only stay in financial planning — but thrive. We want them to leave the firms they are in where they are marginalized — where they have to choose between family and career, where they are underpaid — and help them build the business they want. And if they are already out there as solo firm owners, we want them to have the bluechip resources they cannot afford on their own, and to have a network of others like them to share best practices, be supportive, collaborate, and perhaps even find a successor down the road. 

We want to empower women to stay in our industry and succeed. If you’re interested in joining Equita Financial Network, contact us today. 

Client Onboarding: 5 Common Mistakes to Avoid 

When seeking new business for your firm, first impressions matter. And sometimes, that “first impression” can last three months. 

According to InvestmentNewsit can take anywhere from two weeks to three months to onboard a client. This time period is arguably the most crucial time because it sets the tone for the entire relationship. You want your clients to feel welcomed, confident that they made the right decision, and trust your services. And if they have a positive onboarding experience, this increases the chances that they’ll stay a client for years to come.  

To make your client onboarding process successful, here are some common mistakes to avoid: 

1. Running your business by the seat of your pants.

When you don’t have a consistent, systemized onboarding process in place, it will cause your clients a lot of worry, stress, and uncertaintyIf you worked with your clients at a prior company, and they know you’re still adjusting to your role at your new firm, they may be more understanding and lenient, but that won’t last forever. Not having a system in place will not only stress out your clients, but they might also be hesitant to refer you to others 

2. Not managing client expectations.

As Truelytics notes, consider onboarding to be an orientation. “Client onboarding is essential in setting expectations, clarifying any areas that may be fuzzy to the client, and laying out a communication plan.” You don’t want any surprises during the onboarding process.  

3. Not having a CRM system in place.

Given how time-consuming and work-intensive it can be to onboard a client, you don’t want to reinvent the wheel each time. With a CRM system, you can make the onboarding process as repeatable and automated as possible, saving you hours and hours of workCRM systems let you easily track client information, interactions, sales data, birthdays, and more.  

4. Either customizing the process too much (which is time-consuming) or automating everything too much (which can be impersonal).

You need to find a balance between being efficient and being personal. Think of some things you can customize for each client that show you care. As Vanessa Oligino of TD Ameritrade Institutional notes in InvestmentNews, “For example, around the holidays vendors give me chocolate all the time, and I don’t eat chocolate. That tells me they don’t know me very well.” 

5. Putting the relationship on autopilot once the accounts are funded.

Just because you’ve reached the end of the onboarding process, that doesn’t mean you should go on autopilot. After onboarding is over, why not survey your clients to see how things are going? This invaluable feedback could show you any blind spots you had during the onboarding process, strengthen your client relationships, and smooth out the process for future clients.  

Provide the Best Client Experience with the Help of Equita 

Your client onboarding process can make or break your business. An efficient, streamlined process creates more trust, gratitude, retention, and peace of mind not only with your clients, but also within your team. As Kitces’ blog notes, “Processes help when a team member leaves and you need to reallocate tasks to other members of your team, when you need to add a replacement team member, or when you grow your total team and need to adjust the flow of who does what. Processes act like an operations manual.”  

So, today, take inventory of the processes you have in place. What do you need to do to create the best experience for prospective clients?  

If you’d like to improve your firm’s client onboarding process, reach out to Equita Financial Network today for tools and resources.  

Female Entrepreneurs Need Access to All Forms of Capital — Particularly Social Capital 

Did you know that we could add $5 trillion to the global economy if we supported women entrepreneurs 

Yep, you read that right — $5 trillion. That’s what new analysis by Boston Consulting Group (BCG) has found. If women and men participated equally as entrepreneurs, global GDP could rise by approximately 3% to 6% (boosting the global economy by $2.5 trillion to $5 trillion) 

Companies globally are underutilizing a huge opportunity. 

But the benefits of supporting women’s entrepreneurship go far beyond boosting global GDP. Closing the gender gap in entrepreneurship and fueling the growth of women-owned enterprises will unleash new ideas, services, and products into our markets. And ultimately, those forces may redefine the future,” BCG writes. 

So How Can We Support Women Entrepreneurs? 

Yes, we need to support female businesses through funding (financial capital) and skills training (human capital), but one critical, overlooked area? Their lack of access to “social capital in the form of powerful support networks.  

In their research, BCG found that networks are a critical factor for small business success. In low- and middle-income countries, they studied how knowing at least one other entrepreneur (a proxy for entrepreneurial networks) impacted women-led businesses.  

BCG found that stronger and broader networks are linked to smaller gender gaps in business sustainability and improved access to a variety of funding sources. Research by other groups, such as the Asia Foundation, has found that peer-to-peer networks encourage women to set higher aspirations for their businesses, plan for growth, and embrace innovation. 

How a Robust Support Network Like Equita Financial Network Helps 

BCG’s research is pure validation of Equita’s mission and the value we provide to Member Firmsa supportive, experienced network, resources, events, and more. We provide a way for like-minded women to not only share resources, to run the business they want for less expense than they would pay on their own, but also to share ideas on everything from best practices to help with questions regarding client issues.  

Equita is so much bigger than just Bridget and I. Before we founded Equita, we thought that there had to be someone else that was already doing this, already focused on women-led financial planning firms. But after careful research, we realized there was no such place. We set out to build a firm that encourages women to make the leap, gives them the solutions to make the leap, and supports them to grow a successful practice. Equita is here to disrupt the industry and let women know that there is another way, a better way, to build the business you want and build the life you want to live.     

If you interested in joining our network and getting access to the social capital needed to bring your business to the next levelreach out to us todayWe look forward to hearing from you.