| Conversation type | What the client says | What the advisor's job actually is |
|---|---|---|
| Drawdown panic | 'I want out. I can't sleep. Just sell.' | Acknowledge -> restate IPS -> ask for 24h cool-down -> document the override if they still proceed |
| Risk reassessment (life event) | 'I just inherited $2M. Should I take more risk?' OR 'I just lost my job. Should I de-risk?' | Distinguish risk TOLERANCE (psychology, unchanged by event) from risk CAPACITY (financial, changed by event); update IPS accordingly |
| Lifecycle transition | 'I retire next year. How do I switch to drawdown?' | Walk through sequence-of-returns risk, bond glide-path, Social Security claiming strategy, Roth conversion window |
| Divorce / death | 'I just got divorced. What changes?' | Beneficiary updates, account titling, possible IPS rewrite (single risk profile now), tax-bracket shift, estate documents |
| Concentrated-position request | 'I want to put 50% in [single stock or speculation].' | Document the disagreement; size the speculation as a play-money carve-out; restate diversification framework in writing |
The single highest-leverage behavioral coaching move is the cool-down clause baked into the IPS at onboarding. Language like: 'In the event the client requests a change of more than 10% of total portfolio allocation outside an annual review, advisor will execute the request after a 24-hour cool-down period during which the rationale will be documented in writing.' This isn't legal protection — it's behavioral protection. Most peak-drawdown panic requests are withdrawn within 24-48 hours; the IPS clause turns the cool-down from a fight into a script.
The asymmetric risk is missing the call. A drawdown panic, a divorce, a terminal-illness disclosure -- each is a moment where the client most needs structured guidance, and each is a moment where 'we can talk next week' permanently breaks the relationship. The cost of a same-day response is hours of professional time; the cost of waiting is the AUM. Build a triage system into the practice so that level-1 (panic) and level-2 (life event) calls get a 24-hour-or-less response.
The three difficult conversations are predictable. The IPS contains the answers if you wrote it well at onboarding. Acknowledge first, educate second, execute third — never reverse the order. Document overrides for both audit and CYA. The advisor who shows up for the panic call is the advisor whose AUM compounds across cycles.
Sit with the ideas.
A client calls in panic during a 25% market drawdown and says: 'I want to go to cash. I can't sleep. Just sell everything.' The IPS says equity exposure should stay at 60%. What is the right opening response?