In a recent conference call, I was asked about how to deal with "statement shock" when clients receive monthly or quarterly statements with bad news.

Let's start by agreeing that with growing access to online accounts, the importance of the statements which clients receive in the mail has diminished. That said, for many clients those regular statements are still the most important written communication they receive from their advisor and his or her firm.My answer to how to defuse "statement shock" was quite simple. The best way to deal with the negative surprise when clients receive statements with bad news is to preempt their concern by anticipating it and communicate before the statement arrives.

For example, when clients are going to be receiving a statement after a tough stretch in the markets, call top clients the week before to say - "You're going to be receiving your monthly or quarterly statement in the next week or ten days. As you likely know, the last while has been a difficult one for the markets. I'd like to schedule a phone call (or meeting if that's appropriate) to talk about where you stand and to answer any questions."

This call does three things - it prepares clients for bad news, lets them know you're on top of the situation and reduces the anxiety they feel, knowing that you've got a scheduled a time to talk.

Chances are you can't do this for every client. One solution is to have your assistant call your second tier of clients the week before they'll be receiving statements to book phone appointments out three or four weeks. Even though clients have to wait to talk to you, knowing that they have a call scheduled reduces their anxiety.

Even if you can't set up phone meetings with all clients before their statements arrive, there are other approaches to letting clients know you are being proactive. One successful advisor takes a different tack for her B clients - She gets copies of statements from head office and mails them to clients with a hand written note - for example, she might write "This is a copy of your most recent statement, I have asked Sarah to set up an appointment for us to talk about this." Her assistant then follows up and books an appointment out three or four weeks.

Another Chairman's Club level advisor invites top clients to a twice yearly luncheon in his boardroom to talk about what's happening in markets and to answer their questions. He then organizes a conference call that he opens up to all clients, to walk them though the material he's prepared.

If one of these calls is scheduled for the immediate period ahead and clients receive bad news in their statements, many will be reassured knowing they'll have a chance to find out more in the upcoming session. (As an aside, there's an advantage to having regularly scheduled calls - the risk if you organize a special call is that clients will either feel things are REALLY bad or have unrealistic expectations going into the call about your ability to make definitive forecasts for the immediate future.)

Whatever approach you take, when clients are going to be receiving statements after a tough period in the markets, consider communicating in advance to minimize the chances of statement shock.