ETF Trends
ETF Trends

Market volatility not only creates an environment rife with behavioral errors, it can also rob even the best financial advisors of productivity and limit their business potential.

After decades of working with financial advisors, I have found that during times of downside volatility, advisors typically report lower year over year production as new business slows to a crawl. The start of 2016 is no different.

In what could be an opportunity, a behavioral tendency called recency-bias kicks in and wreaks havoc on both productivity and investment performance as advisors and investors project forward the prevailing down market and throw existing processes out the window.

After the inevitable market rise, the resulting commiseration as to what they did not view as a buying opportunity is rationalized through another behavioral tendency called confirmation-bias, whereby the human psyche is soothed by putting more weight on the information that validates their paralysis and less on the information that did not.

Even some of the most seasoned financial advisors can get caught up in this behavioral trap and spend their time on reactive activities that stall their business growth and can lead to sub-par investor returns.


The best way to combat these behavioral tendencies engrained in all of us is to implement and follow processes to power through those mindsets. One of the biggest problems for financial advisors trying to build and grow their businesses in volatile markets is more of a symptom that I call “Tetris Syndrome.”  You may remember Tetris as a 1980s video game whereby various shapes drop down and the player has to deal with each one by spinning, matching and organizing each piece to create a solid line that disappears.

As the game progresses, the shapes continue to fall at a faster and faster rate as they stack higher and higher until the stack gets too high and the game ends when the player is inevitably overwhelmed. This can be analogous to a day in the life of many financial advisors as they spend more and more time in a reactive mode attempting to educate and calm the nerves of worried clients, while also analyzing the global markets trying to discern if it really is different this time.

These advisors spend little to no time proactively reaching out to clients for additional investments or to prospective clients whose current advisors are busy playing Tetris.

Sure, there are times when even the best clients may have moments of weakness and they need the experience and perspective of a great financial advisor. We also know that expertise does not come without considerable time spent on careful research and due diligence. However, growth and success in practice management and investing also requires an advisor to be proactive and disciplined to stay on track.

Building Blocks of Success

So how do you do it? Over the past two decades, I have had the opportunity to work with some of the best and brightest advisory practices in the country and they all have things in common. The most obvious is a process. The best and brightest typically have set processes and routines that directly support their growth and goals. These processes are non-negotiable and followed precisely by all members on the team regardless of market conditions.

Every task is time blocked and ensures that work activities are scheduled and executed. I know that this sounds like it can be rigid and boring, but without process even the most talented and high potential individuals can get derailed. You as an individual may not embrace something as rigid or organized and you may not be part of a huge team. However, sometimes even the smallest change or implementation of a single simple process can pay huge dividends and its great place to start.

I use Legos. That’s right, those little interlocking blocks that fueled the imaginations of generations. Here is how it works for me: I don’t time block well and my business is in a very high growth phase. When the phone rings I answer it. I need some way to ensure I maximize the amount of time I am spending proactively getting our story told. At all times a stack of a dozen 2X2 Lego blocks sits on my desk. Each block represents an activity that directly impacts the growth of my business. In my case, it’s an appointment set, a conversation regarding new business, or some activity that promotes greater public awareness of my company and our value proposition.

Each day I disassemble the architectural masterpiece I built the day before and start over. When I complete one of the activities that qualifies, I add a brick. It’s simple but very easy to see at a glance how productive I have been, when I need to step it up and when I am having a great day. The three dimensional aspect of building in imaginative ways has helped to keep me on track, reach goals and is an amazing allegory to building the business of my dreams. It’s fulfilling to see each day what I built knowing what I built was my business.

What will you build today?

Jonathan Bernstein, CIMA, is Principal/Director of Sales and Marketing at Stringer Asset Management, a participant in the ETF Strategist Channel.



Any forecasts, figures, opinions or investment techniques and strategies explained are Stringer Asset Management LLC’s as of the date of publication. They are considered to be accurate at the time of writing, but no warranty of accuracy is given and no liability in respect to error or omission is accepted. They are subject to change without reference or notification. The views contained herein are not be taken as an advice or a recommendation to buy or sell any investment and the material should not be relied upon as containing sufficient information to support an investment decision. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements and investors may not get back the full amount invested. Past performance and yield may not be a reliable guide to future performance. Current performance may be higher or lower than the performance quoted.

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