Advisors Who Warned Clients about the Stock Slump


The stock-market slump may be making headlines, but it wasn’t a surprise for some veteran advisors. More to the point, these advisors took preemptive action before the market dropped — they sent out client notices earlier this summer telegraphing the likelihood of a market correction.

“I told them the first of August that I expected a pullback,” says Marie Moore, a Morgan Stanley advisor in Dallas, whose team manages more than $400 million. She then pared some equity from her clients’ portfolios, took a vacation to Italy, and returned just in time for all the volatility at the end of August. “People were actually calling and saying, ‘You called it,’” she says.

Moore abided by her mantra, “to always keep my clients informed,” so they don’t come to her panicked with urgent questions when markets turn. Still, a few clients have called recently to ask how long she believes the markets will remain this volatile. “I said, ‘I don’t think it’s over yet.’”

Pulling out of the equity markets with some precision was easier for Moore, since she invests clients in individual stocks. That’s not always easy for advisors who go with mutual funds, she says. “They are not able to pick and choose which aren’t really performing.”

Lee Financial, a planning firm in Dallas with $1.1 billion under management, stayed true to its policy of being proactive and not waiting for clients to call in. “We talk about it to all of our client-facing people,” says compliance chief Dusty Wallace. “We tell them to get out to your clients before they get to you.”

The clients who call with concerns are typically responding to the news. “How far down am I,” such clients have asked, according to Wallace. Fortunately, she adds, her clients’ diversified portfolios rarely dip as much as the broad markets people rant about on TV.

Ross Gerber knows all about warning clients about potential market corrections and about the potential traps of advisors appearing on television.

“They tape everything you say,” Gerber — who has appeared on CNBC, Fox Business, and Bloomberg — says about financial-news outlets.

This means people who claim on television they know ahead of time what the market will do — and get it wrong — don’t appear on television again, says Gerber, whose Santa Monica, Calif.-based firm Gerber Kawasaki Wealth & Investment Management manages $375 million. He says he gets asked back on TV shows because he doesn’t make foolhardy predictions.


By Miriam Rosen
http://financialadvisoriq.com/c/1192123/130613

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor. No strategy assures success or protects against loss.

Gerber Kawasaki, 2716 Ocean Park Blvd. #2022 Santa Monica, CA 90405. Contact us at (310) 441-9393.


Schedule a call with an advisor, free of charge.
Read more from this issue
  • For Elon Musk, Tesla’s Impresario, the Latest Act Falls Flat
  • Live Sports Remain Ace In The Hole For Cable Companies Against Cord Cutters
  • Should advisers barter their services?
  • How a Smart Comp Plan Can Boost Firm Growth
  • Like Dividend Stocks? Don’t Chase Performance, RIAs Warn
  • How To Get in On The Big Money In Sports
  • What It Really Costs to Attend Coachella
  • Rise Of Social Media Takes Toll On Traditional Advertising
  • Remind clients that inherited stocks aren’t keepsakes
  • Middle class deserves unbiased advice
  • 10 Financial Things Newlyweds Must Do
  • 12 Habits Of High Earners That Anyone Could Emulate
  • Financial Planning for the New Realities of Marriage
  • Healthy Investing Could Make You Wealthy
  • Jack Dorsey’s Twitter stock buy: PR or true confidence?
  • Despite selloff, stick with tech titans: Strategists
  • Pulling Clients Away from the Panic Button
  • Harsh Reality Of Tech Stocks: Not Everyone Can Be A Unicorn
  • New Apple iPad Pro geared toward meeting advisers' business needs
  • Gaming The Investing Angles Of Virtual Reality
  • 7 Times You Need to Talk to a Financial Advisor
  • Winklevoss Twins call on advisers to get on Bitcoin bandwagon but they're not budging
  • Wells Fargo Pushes for Cross-Sales with VIP Program
  • Star Wars: The Investor Force Awakens
  • Fed Proves Irrelevant in $2.6 Trillion Slice of U.S. Debt Market
  • Prepare Your Portfolio For Iraq War Three: The Death Of ISIS
  • Stock Options & Restricted Stock
  • Four Big Tech Trends for 2016
  • Twitter users dislike Twitter exec exodus
  • Oil-Based Economies Collapsing And That's Great For America
  • Why IPO Investors Are Set Up For Failure
  • A New Wave of Advisor Recordkeeping Tools
  • Pride Month: 3 Financial Tips for LGBT Couples
  • Musk’s SolarCity Bid a Rare Time Investors Don’t Buy Vision
  • Yahoo reports lackluster results as sale looms