Fear of the coronavirus outbreak is fueling volatility in the markets that has concerned even the most veteran investors. From its February 25 high of 29,551 to its March 11 close of 23,553, the Dow fell 20.3 percent. This officially marked the end of the 11-year bull market that started in March 2009.
While most investors expect some degree of market fluctuation, the past several weeks have been an exceptionally wild ride.
There are a number of Envestnet tools you can use to help calm your clients’ nerves as they ride out the current volatility, reinforcing your value and deepening your relationships.
Analyze Portfolios in Minutes
With BlackRock’s 360° Evaluator, you can provide clients with comprehensive analyses of their portfolios in just minutes, identifying potential areas of risk exposure.
With straightforward, client-friendly reports, the tool makes it easy to capture and interpret the findings and understand how a portfolio is aligned with desired client outcomes.
These insights can help increase client confidence and enable important conversations about their goals. You can augment the analyses with your own research and insights.
Engage Clients Through Digital Collaboration
In these times of social distancing, the power of digital collaboration can help you engage meaningfully with clients.
The Envestnet Client Portal empowers you to connect with your clients through a cloud-based suite of communication and document-sharing tools. With face-to-face meetings not currently an option, schedule virtual meetings to reassure your clients and assess their financial goals and wellness.
Gain the Benefits of Beta Investing and Portfolio Customization
To improve after-tax and risk-adjusted performance, Envestnet offers Quantitative Portfolios (QPs). Using a research framework, construction techniques, and portfolio management experience provided by PMC’s Quantitative Research Group, this cost-effective suite of asset class-specific investments blend the benefits of “beta” investing with the portfolio customization of managed accounts.
Envestnet offers three varieties of QPs:
- Market Series QPs provide low-cost access to important market segments
- Factor-enhanced QPs offer the potential for excess returns
- Impact QPs focus on companies with priorities on ESG
Stress Test Portfolios
Using BlackRock’s Scenario Tester, you can stress test a portfolio to see how it might react to market events. The Scenario Tester helps you demonstrate how you account for risk by comparing your client’s current holdings with your recommendations.
You can also address your client’s biggest concerns by sharing reports that illustrate how their portfolio might perform under the scenarios that concern them the most.
Because Scenario Tester runs holdings-based analyses on the securities in the portfolio rather than on an asset-class proxy, you gain better insights into your client’s portfolio.
Harvest Gains and Losses
During the current drawdown, you may be rebalancing portfolios and harvesting tax losses to mitigate some of the pain your clients are experiencing. Envestnet’s Tax Overlay Services enable you to manage your clients’ taxes while minimizing the effect these client-specific customization requirements may have on their investment portfolios.
This discretionary, holistic tax management solution can help reduce tax exposure and optimize risk, while freeing up your time to focus on other important aspects of your client relationships and practice.
Estimate Capital Gains Taxes
If you’re rebalancing client portfolios as a result of recent market volatility, BlackRock’s Tax Estimator can help you estimate the capital gains taxes due on your clients’ transactions, analyzing over 7,000 funds.
Using this tax information, you can engage with your clients about the current state of their goals and how their portfolios support them. And if you need to make changes to client plans, you can apply them directly in Envestnet | MoneyGuide.
Proactive analysis and the opportunity for potential savings position you as a trusted advisor looking out for your clients’ best interests.
Reaffirming Your Commitment to Your Clients’ Financial Wellness
The kind of market turbulence we’ve encountered recently has rattled investor confidence. Using the tools and approaches outlined above, you can calm your clients’ nerves, deepen your relationships, and reaffirm your commitment to their financial wellness.
LibertyFi can help you apply the power of these Envestnet solutions. Don’t hesitate to reach out with any questions. Contact us at firstname.lastname@example.org.
 Kimberly Amadeo, “How Does the 2020 Stock Market Crash Compare with Others?” The Balance, last accessed on March 29, 2020, https://www.thebalance.com/fundamentals-of-the-2020-market-crash-4799950.