Wealth manager: "Do nothing" often best advice to edgy clients
By Andrea Hopkins
(Reuters) - Tina Tehranchian has seen what volatile global markets are doing to Canadian investors.
"I had a client who was quite nervous. She came into my office last week and she wanted to bring down the risk level in her portfolio," said Tehranchian, a certified financial planner with Assante Wealth Management in Richmond Hill, Ontario.
Adviser and client talked it out, revisiting the woman's asset allocation, her long-term goals, the history of market downturns. The woman eventually left without changing a thing.
"Once I went over the choices with her in terms of moving to cash, increasing bond exposure, selling some of the equities. Even though she was very nervous with the market, she decided absolutely not, she was not prepared to sell any of the equity portion of her portfolio to move to cash or bonds. She decided to stay the course."
Typically in volatile markets, Tehranchian tries to reach out to her clients before they even think of calling her, but the stereotype of the angst-ridden investor panicking as European debt crises roil markets isn't far from the truth.
"There are clients that are certainly picking up the phone and asking 'Why is the situation in Greece or Italy affecting the market in Toronto and how is that affecting my individual portfolio?'" said Katie Walmsley, president of Portfolio Management Association of Canada.
"There is an increased awareness of the impact of global economic events," said Walmsley, whose organization represents more than 150 portfolio management companies watching over C$800 billion ($790 billion) in assets.
Helping investors - whether individuals or giant pension funds - limit their losses by staying the course amid volatile global stock markets is top priority for wealth managers around the world right now. Continued...