WEALTHTECH INSIDER: How Advisors Can Seize the Volatility Opportunity


In the past four months, investors and their portfolios have been dealt with a blow of volatility—but advisors have plenty of tools to reach out and help them.

In fact, advisors have communications, planning and portfolio management resources they can apply to help their clients through volatility, according to presenters on 3 Proven Tactics to Guide Your Clients Through Market Volatility, a recent webinar from Orion Advisor Solutions.

“We think drawdowns are normal within equity markets,” said Ryan Dressel, Senior Investment Strategist with Brinker Capital Investments.”  Over the past 30 years, the average calendar year return is about 10%, but within that calendar year, the average drawdown is about 14%.”

To begin this year, equity markets were hampered by the Omicron variant of Covid-19, but the sell-off has accelerated as Russia invaded Ukraine, inflation surged, monetary tightening took off and the economy shrank.

Still, Dressel expects that volatility will settle down, eventually. For one thing, even with the Fed’s statutory rates rising, inflation is keeping real interest rates in negative territory—which means monetary policy is relatively accommodative and bullish for equities.

“In the near term, expect further choppiness… but eventually markets will move on and look forward,” he said.

Historically, geopolitical crises have not caused long-term drawdowns, Dressel said, comparing the Ukraine conflict to the Iran hostage crisis, the Iraq war, and the Cuban missile crisis.

History’s lesson to investors? Stay invested.

“Don’t get caught up in taxable mistakes that investors tend to make,” he said. If investors take money out and miss the strongest days in the market, they also miss most of the compounding opportunity within that market. In equities, “those days tend to occur right along-side steep drawdown events.


Volatility makes personalizing client content stand out more amid the noise, said Jake Leise, Director, Orion Prospect, Orion Advisor Solutions. Leise heads Market*r, Orion’s marketing and client communications tool.

“During volatile markets or uncertain times like the pandemic or the volatility we see today, clients have come to expect to see personalized communications in addition to the personalized services you provide,” he said. “It’s not easy to send personalized marketing messaging to each and every client every time there is a market event, or something happens that requires you to reach out.”

That’s why effective client segmentation is so essential, Leise said. Segmenting clients into definable groups allows advisors to send the right messages to the right people at the right time “in a way that isn’t taking up too much of your time.”

In theory, segmentation groups a segment of clients into any number of specific and differentiated groups. Leise said these groups can be built in accordance to distinguishing features like demographics—age or gender—or personal features—risk tolerance, how often they contact their advisor.

Imagine a book of clients broken out into three groups – one, long-haulers, are very risk tolerant, comprising mostly young investors with long time horizons. Another, nervous wrecks, are people approaching retirement and who are “pretty risk averse.” A third, which Leise called engineers, are an older, highly educated group who have a high level of interest in their investments and portfolios and what to be engaged in what happens within them.

Different campaigns can then be targeted towards different groups. Engineers, for example, might respond well to campaigns with market commentary and straight-forward information about what is being done within portfolios.

“The nervous wrecks are a group where, rather than focusing on the details of the markets, we want to focus on the fact that as an advisor we have the tools to help them navigate these uncertain times,” Leise said.


There are three angles that can be taken within financial planning to address volatility with clients, according to Cade DeNazario Akers, Financial Planning Product Manager, Orion Advisor Solutions, and Orion has workflows designed around them.

The first is an analysis of a client’s emergency savings to make sure this simple, but essential, planning step is appropriately accounted for.

Orion also has workflows around risk tolerance, in addition to its robust HiddenLevers portfolio risk tools (more on them later). DeNazario Akers encourages advisors to revisit their client’s risk tolerance, and perhaps even reassess it, during volatility.

“We find that clients are actually comforted by being able to re-take this little test,” he said.

Orion also offers stress-testing and financial modeling for portfolios, and DeNazario Akers encourages advisors to revisit Monte Carlo simulations with their clients.

“The worst fear when we know there’s volatility and uncertainty is the worry that a market downturn will become a full-blown bear market or recession, that’s where everybody’s mind goes,” he said. “We should embrace that as a rational, valid fear, and compare that fear against our current financial position. Monte Carlo simulations are one tool that help us do that.”


Thanks to HiddenLevers, Orion has powerful tools to measure risk tolerance, build portfolios and stress-test those portfolios. Part of that tool is what Orion calls a three-dimensional risk tolerance questionnaire, uncovering a client or prospect’s risk capacity, tolerance, and composure.

Phillip Colling and Clark Jeffries, both AVPs of Business Development, Orion Advisor Solutions, encourage advisors to use these tools proactively with clients.

“The more successful RIAs who leverage our tool are proactive versus reactive,” said Jeffries. “During onboarding as we’re moving on a new client, we’re not only asking what is their risk tolerance, but we’re showing them how does that relate to their investments. We’re not trying to hide the risk of investment, we’re instead trying to align their risk appetite, capacity, and composure with their portfolio.”

Advisors should realize that clients are receiving their daily doses of fear from media sources, said Jeffries, while advisors should present a positive, opportunistic assessment where possible.

But it’s also important to be realistic, said Jeffries.

“To be a fiduciary, we can show that if we move forward from here with a less risky portfolio, you won’t gain as much upside after we’ve de-risked your portfolio,” he said. “That conversation is sometimes lost on the investor, where de-risking a portfolio might fall short.”