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By 
May 13, 2024 at 04:04 PM
Financial advisors build their careers around investing other people’s money. And just as clients should be investing for the long term, advisors seek to build long-term client relationships.
Clients’ largest single investment might be their house, but its price is not quoted publicly every day. Because stock prices are constantly changing and the numbers are visible everywhere, clients get nervous. Part of the advisor’s job is putting things into perspective.
What does that mean? In the 1920s, when margin was less regulated, there were stories of clients, wiped out by market losses, jumping out of windows. Putting things in perspective is reminiscent of the story of when clients call in a volatile market, the advisor asks where they are standing, then says: “Start by stepping away from the window!” Thankfully, far fewer people are taking such drastic measures, but advisors still need to deal with client misbeliefs that can get them into trouble.
Perhaps the greatest one is “Investing is easy.” You need to help them see the full picture, especially when things are not going their way.
Here are 10 client misconceptions and how an advisor might address them:
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