Getting Back to Investment Basics: Clearing up Misconceptions, Calming Nervous Investors

Achieving an award-winning investment services status takes a commitment to financial education, consistent and clear communications, and the ability to develop trusted relationships with customers. As a registered representative of TopLine Investment Services and with over 15 years in the business, I have found that clients are most satisfied when they feel that they have made an informed decision about their financial goals and objectives. Unfortunately, many people admit that they have made decisions in the past before they had a clear understanding of the securities markets or individual products. The key is education and helping prospective customers review their financial positions and develop investment strategies to meet their individual goals and objectives. This takes an educational and commitment-free environment that helps to build trust and opens the door to establishing long-term relationships. In addition, it creates an informed and satisfied client. At the beginning of a relationship, I try to clear up financial misconceptions and misunderstandings. Being able to clearly communicate the most basic aspects of investing as well as the most sophisticated financial products is pivotal to developing a financial strategy that my clients are comfortable with. The client’s willingness to share personal information, such as number of children and their ages, college planning needs, aspirations for retirement, income and budgeting constraints, etc., also has a direct bearing on the success of the relationship and the investment strategies. Doing what is best for the client is the cornerstone to developing a positive investment relationship. There are times when potential customers are looking for a “get rich quick” recommendation and may even be inclined to borrow money in order to speculate on equities or other investment alternatives. With the low interest rate environment, home equity loans and lines of credit have been a tempting resource for those who would like to recoup past market losses. It has been my experience that a good solid education on basic investment concepts will typically steer a client in the proper direction and away from unsound investment decisions. The past few years have been difficult in equity markets, resulting in moments that have unnerved even the most seasoned investors. I have received a few calls from clients who wanted to cash in and abandon the potential of equity investments. However most of my clients are just looking for reassurance that the sun will come out in the not-too-distant future. Again, a sound financial education helps curb feelings of fear in hard times. The steadfast nature of today’s investor has served to calm an otherwise stormy market and has helped the turn-around that we have seen over the last few months. Today’s investors are savvy and sophisticated participants who need to have a broader understanding of markets and volatility than generations past. As an advisor, I try to maximize my clients’ knowledge to help them make sound financial decisions in order to weather turbulent times. Leveraging Uniqueness Whether it be starting an account for $20 a month, or providing a large insurance contract that protects against a life-altering event, credit unions have the tools to assist almost anyone in their quest to prepare for or enhance their financial future. Credit unions are well positioned to provide a full-scale assortment of financial products and services to their members through CUSOs. During the wave of bank consolidations and mergers, the “banking” relationship became de-personalized and the customer became lost in automated systems and standard procedures. Fortunately, this trend did not migrate to credit unions. Credit unions have always offered their members attractive alternatives to conventional banking. Today, they are in the enviable position of having loyal members who appreciate the credit union focus on superior products and value-added service. This is the time for credit unions to take advantage of their unique position in the financial services marketplace, by leveraging opportunities to grow.