Four Ways to Drive Performance and Maintain Client Confidence During Market Volatility

The recent U.S. stock sell-off, which sent Wall Street “fear gauge” (the Cboe Volatility Index) to a three-month high, represents an opportunity for advisors to re-examine and better understand the way they approach driving performance and client confidence in periods of volatility, of which there have been no shortage over the past few years.

When advisors pivot the way they think about market volatility, framing it as a powerful chance to prove their undeniable value to their clients rather than a storm to be braced for and duly weathered, they open up the door for more impactful client experience that drives both retention and referrals.

Let’s take a look at four ways advisors can harness market volatility to maximize returns while increasing client trust and confidence:

Diversification

The cornerstone of any sound investment strategy, diversification is particularly critical during uncertain market conditions. In the example above, the stock sell-off represented the broader market’s vulnerability to weakness in Big Tech, underscoring the importance of spreading investments across asset classes, sectors, and geographies to mitigate risk and smooth returns over time.

At Helios, our robust model ecosystem allows for the creation of highly diversified portfolios that reflect each client's unique needs and risk tolerance. This not only reduces the impact of any single investment's poor performance but also provides a balanced exposure to various market opportunities.

Regular Rebalancing

Market movement causes asset allocations to drift from their target weights, potentially exposing clients to unintended levels of risk. Periodic rebalancing helps reduce risk and can improve returns by: 

• Making sure no single asset class dominates overall portfolio allocation, which helps reduce volatility and can offset losses from one type of investment with gains from another type of investment.
• Forcing investors to buy low, when prices have fallen, and sell high, when prices have risen. Compared to holding onto certain assets without making adjustments when markets rise or fall significantly, this helps improve returns over time.

Quantitative Investing

Quantitative investing, or the process of using mathematical models and algorithms to identify investment opportunities, reduces the likelihood of emotions and biases clouding investment decision-making. That should translate to a more rational and consistent approach to investing, which could drive better performance overall, particularly during periods of market volatility.

At Helios, we incorporate advanced quantitative models that combine an advisor's expert investment philosophy with rigorous analytical methods, helping advisors and their clients navigate volatile markets with confidence.

Proactive Communication

Research shows that 9 out of 10 clients value frequent updates, so reach out proactively to clients during periods of market volatility, when they may be feeling uneasy about their investments and financial goals.

Our weekly and monthly research reports, which can be whitelabeled to each advisor’s firm, provide in-depth market analysis and leverage data to illustrate the historical performance of various asset classes during periods of volatility. This empowers advisors to help clients better understand the importance of diversification and maintain a long-term investment perspective. 

Helios: Your Partner for Navigating Volatility

With Helios, you get the expertise and resources of an entire investment department at your fingertips, without the associated costs. From our rigorous investment research to our quantitative approach to our robust client communication tools, we empower advisors to turn market volatility into opportunity for driving returns and maintaining client confidence.

Ready to learn more? Schedule some time with our team today.