Advisor contacts clients early to limit panic in sell-offs

Sarah Martinez, a certified financial planner and founder of Meridian Financial Planning in Austin, contacts clients at the first signs of market volatility. She places phone calls within 24 hours of a one-day market drop of about 3% or when several risk indicators move together, then follows with a short written summary outlining options for each household.

Martinez reviews each client’s target allocation, near-term cash needs and any upcoming financial events such as tuition payments or home purchases during the outreach. If a portfolio has drifted outside target ranges, she recommends rebalancing to restore the original mix of stocks and bonds. When appropriate, she describes potential tax-loss harvesting trades and their tax implications.

Calls are paired with a brief checklist that lists current allocation, cash needs over the next 12 months, planned withdrawals and any tactical steps the firm recommends. The firm schedules group calls for clients who want broader market context and sends a market note to clients who prefer less frequent contact.

“I want to be the first voice they hear,” Martinez said. She tells clients what had been planned for downturns and which actions to consider now, and she clarifies whether the plan has changed.

A client who is a teacher and asked to remain anonymous recalled receiving a call during a recent sell-off and deciding not to sell long-held investments; she added the conversation reduced her anxiety and helped her avoid a reactive trade.

Martinez estimates that a small portion of clients request major changes after these conversations; most either maintain their allocations or make modest adjustments such as increasing cash buffers or shifting some exposure from higher-volatility holdings into bonds.

To scale the process, Meridian segments clients to determine who receives phone calls versus emails and uses prewritten templates advisors customize for each household. The firm documents each interaction and any client decisions and reviews those records quarterly to measure whether the outreach reduced unnecessary trades.

Financial advisors typically maintain an investment policy statement for each client that defines risk tolerance and rebalancing rules. Martinez applies those documents when markets move and uses standard techniques such as rebalancing and tax-loss harvesting to align short-term reactions with clients’ long-term plans.