Business Development How to manage client expectations during market rally

How to manage client expectations during market rally

Read on to find out how these advisors are managing their client expectations in the current market rally.
Daya Ragunathan Aug 11, 2017

Investors are often clueless about their risk appetite. Especially during market rally, investors get more optimistic and insist on investing in high risk instruments in the hope of making quick bucks. As a result, advisors see more inflows in mutual funds.

However, when the market corrects itself, these investors get surprised. The only solution is to coach them to be more cautious.

We spoke to a few advisors to understand how they manage their client expectations during market rally. Let us see that they have to say.

Ram Barcha, Vikalp Finvest, Rajkot

The best way to set the expectation right from the beginning is to let the client know performance of the funds during bear markets. I make them understand what kind of downside returns they can expect if something goes wrong with the rally. Many clients may back out their decision of taking strong position in equities during market rally after understanding the downside risks. I also dissuade them from choosing high-risk funds.

Umesh Shukla, I Can Financial Solutions, Valsad

Irrespective of the markets, I give utmost importance to asset allocation. I spend a lot of time with my clients gauging their risk profile. I insist that all my clients have a little ‘fall back’ money. I educate them on how portfolio diversification helps sustain market cycles.

In my 33 years of experience, I have learnt that markets cannot be trusted. I urge my clients to exercise caution and to be prepared for the worst.

AK Narayan, AK Narayan Associates, Chennai

Irrespective of the market conditions, I coach my clients to have conservative expectations from their investments. At any given point in time, I ask them not to expect more than 12%-13% tax free return. If they insist on investing a large amount, I ask them to invest in liquid funds and do an STP for 6 to 9 months instead of investing lump sum.


Let us know how you are managing your client expectations.

ekt · 9 months ago
whatever is the market condition make your client understand that their investment is for the purpose of long term financial goal. When market gows down , was that the period when you need money , if not then dont be panic and just follow one simple rule of investing "CONTINUITY" . its not advisable to move your structure of investment plan so frequently.
Prabir Sharma · 9 months ago
Irrespective situation of the market I suggesting most, stick to their Asset Allocation and keep re-balancing time to time.
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