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Manulife and BEworks team up to keep clients invested during turbulent markets

By The IJ Staff | May 16 2019 01:30PM

Photo: Freepik

Manulife Investment Management is taking a page from behavioural economics in an initiative aimed at helping advisors keep their clients invested during times of market volatility.

Partnering with consulting firm BEworks, Manulife is providing a toolkit to advisors to provide them with information to better understand investor behaviour.

At a preview of a Manulife documentary called “Upside of Down” in Toronto, Catherine Milum, Head of Wealth Sales, Wealth and Asset Management, Canada, said advisors know that staying invested during market downturns makes sense.

While they tell their clients this, some insist on moving into cash with the result that when the market comes back they have lost out and can never make back their money, said Milum.

“What we’ve been doing lately on my side of the business is showing a lot of charts to people and we’re showing the power of staying invested, giving them a lot of math. [But] it’s not working. People don’t understand. We’ve been using a lot of logic and statistics when really we need to be looking at people’s behaviour.”

David Lewis, chief client officer at BEworks, said there are a number of tools that advisors can use to help their clients.

One is to get clients to make a pre-commitment to stay in the market unless it drops by a certain, substantial amount. Another is to encourage clients to put a certain portion of their money into savings regardless of the markets. “This can actually de-sensitize them to volatility” and encourage clients to stay invested, said Lewis.

Remaining invested is crucial as people live longer and as more companies shift to defined contribution pension plans away from defined benefit plans, he said.

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