Wunderlich Securities Inc. financial adviser Jason Fair got a call in recent days from a client spooked over the volatility in financial markets.

Specialist Frank Masiello is reflected in his screen on the floor of the New York Stock Exchange on Aug. 24, when U.S. stock markets plunged in early trading following a big drop in Chinese stocks. 

(AP Photo/Richard Drew)

Advisers like him anticipate these kinds of calls and can even roughly pinpoint when their phone will start ringing. It goes hand in hand with helping clients manage and invest their money – you're equal parts financial couch, counselor, even a bit of a psychologist.

On this particular day, Fair's client got to the point.

"Jason," she announced, "I'm calling because I'm just nervous."

They talked for about 20 minutes. As Fair recounts it, his client wasn’t calling with a series of panicked demands. It was more of a check-in to, in her words, "just make sure there's nothing I'm supposed to be doing."

"I just talked to her, and she appreciated the reassurance," said Fair, who has been with Memphis-based Wunderlich since 2009. "That's what we're here for. That's what we're being paid to do. To give them some direction and context and hopefully help them make the right decisions for their long term."

Countless conversations like that one were likely sparked by the recent market swings, which analysts at Bespoke Investment Group have been describing as “all or nothing days.” That’s a reference to the increasing frequency with which most of the SP 500 companies are rising or falling together.

On the down days in that scenario, it leaves investors with almost nowhere to hide. And the aftermath of such volatility provides the opportunity for more than one object lesson.

For one, advisers across Memphis and beyond have been responding in their own way to different versions of the same call Fair received. They reassure clients, for example, that the best decisions an investor can make in response to some externality that sends them into a panic are actually the decisions made before that day.

They’re the decisions made in the initial consultations with an adviser, in their conversations around risk tolerance and how much exposure to the markets they'd like to have.

Jason Fair of Wunderlich Securities 

(Daily News/Andrew J. Breig)

The volatility also illustrates the multi-disciplinary nature of life as a financial adviser. Such money pros have to be good at not only helping manage a person's assets, but also, well, managing that person.

“I probably manage people almost as much as managing money in the job I do,” Fair said. “There’s a fine line you walk, because you can give them the best advice you know how to based on years and years of market history and experience. But, at the end of the day it’s still their money.”

Fair estimates he spends a couple of meetings on the front end just getting to know his clients – who they are, family backgrounds, where they came from. That’s also when goals are set, so that when stomach-churning surprises materialize down the line, he can help them not lose sight of their long-term objectives.

Nancy Knous, CEO of Benchmark Wealth Management in Germantown, takes a similar approach.

“At the heart of things,” she says, “I think I get paid to ask the right questions, listen and then ask more questions until folks come to their own moment of truth and recognition of how they feel and why they do what they do.”

Advisers come back to the primacy of serving as a sounding board and keeping an open line of communication with clients. It’s the kind of thing that allows Andrew Buzan, an investment adviser representative at Kelman-Lazarov Inc. in Memphis, to put his psychology minor to use.

A financial strategy, Buzan says, is only as good as a person’s ability to follow it, which is why he says understanding a client’s psychology and behavioral tendencies are paramount.

“Stock market declines, especially those that occur quickly like we've seen recently, can trigger a fight or flight emotional response in any of us,” Buzan said. “Few of us make good long-term investing decisions when we're driven by emotions such as fear of further declines – or greed in taking excessive risk in an attempt to recover losses too quickly. For this reason, we try to address this situation in advance.”

For newer investors, Buzan thinks it's important to help them think through situations in advance by, for example, asking how they’d feel if they lost certain sums of money (“in dollars, not in percentages.”) Having a conversation like that, he says, helps reduce an emotional reaction later because the client has already visualized and processed the situation.

Lance Hollingsworth, an adviser with Summit Asset Management in Memphis, points out that even with abundant education and planning, clients often overestimate the amount of volatility they can withstand.

Once that threshold is reached, that’s when his phone starts to ring.

“Usually all they have seen is the latest quote of a stock price and the headlines on CNBC and in the paper,” Hollingsworth said. “The first assumption is that this is only the beginning and that the markets have nowhere to go but substantially lower.

“We spend a great deal of time in the beginning of a new relationship with a client on the education aspect of both what we are doing for them and how the markets can behave. We want them to understand what can happen, both on the upside and the downside, before it does so they are better prepared emotionally to handle whatever does happen.”

When the surprises come, he said his job involves reminding clients their portfolios are built in a way to meet their planned liquidity needs without being forced to sell good investments at inopportune times. That also includes shifting the client’s thoughts to where opportunities are being created so the short-term pain can possibly be taken advantage of for longer-term profit.

“In the end, I think a lot of times clients know they should be staying the course,” Hollingsworth said. “They just want to talk over their concerns with someone they trust.”