It’s been a while since we experi- enced the level of market volatility that occurred in the first quarter of
2018. But the market’s recent volatility
gives advisors a new reason to evaluate
how their technology performs in periods of turmoil.
The first question to ask is how well
has your “dashboard” helped you stay
informed during market volatility? Your
dashboard might gather information
from multiple solutions — such as your
rebalancing system, performance reporting system, risk measurement products,
financial planning tools and custodian
applications — or it also could be sourced
from just one or two primary solutions.
The key question is: Do you have efficient access to the information needed
to help you better respond to the changing market environment? The information may have led you to stay put and
make no changes at all, but your dashboard of information should support
your course of action.
Of course, if you don’t have a dashboard with easy access to information,
you have an improvement opportunity.
You can consider new solutions, especially if you have gaps in the list of products mentioned above. Or maybe you
already have the right systems but are
not using them to their fullest extent.
Bottom line, efficient access to information should not be a challenge in any
market environment. You certainly have
numerous other items that require your
time and attention.
In today’s world of easy access to infor-
mation, volatility certainly has captured
lots of headlines. Many advisors have sent
out client communications, offering their
perspectives on the market environment.
In reviewing your communications,
how are you involving technology solutions? Have you reminded and encouraged clients to review their financial
plan, risk tolerance and investment allocation? Have you asked clients to let you
know if they have questions or concerns?
Your firm likely has spent a lot of
time, effort and money on these technology solutions that are directly used by
your clients. Perhaps the best “return”
for these products from a client service/
retention perspective might occur during a volatile market environment.
How do you know if your clients were
concerned about the market volatility?
Is this based on the number of phones
calls or emails you receive? Both are
certainly good metrics to use.
However, you also should track any
behavior changes in clients’ use of your
technology solutions. For example, did
they log-in more frequently vs. other
time periods? It is not necessarily a bad
sign if your client is logging-in more
often (and not calling you), although,
this is good information for you to know.
You might even be surprised about the
level of client activity.
Market volatility can take place at any
time. Thus, there’s always a chance you
could be out of the office when the next
cycle of market volatility occurs. It is in
these situations when your technology
Can you efficiently access all the
information you need and act when you
are not sitting at your desk? With today’s
technology solutions, the answer should
be “yes.” You might not think that this
is a big deal, but it is best to know the
answer to this question in advance.
Finally, during periods of market volatility it’s important to remain focused
on following your procedures for processing trades, especially when rebalancing. Write them down and rehearse
them during quieter times.
These procedures should help your staff
to be extra careful and ultimately to avoid
making any errors. Unfortunately, a typo in
a ticker symbol, addition of an extra zero
to a share quantity or miscalculation of a
rebalancing parameter can be very costly
when the market is moving quickly.
Dan Skiles is the president of Shareholders
Service Group in San Diego. He can be reached
THE TECHNOLOGY COACH
By Dan Skiles
Volatility & Tech Platforms
How is your technology performing with the return of market ups and downs?