How Financial Planners Should Talk to Clients About Underperforming Investments

17 September 2026·3 min read

Quick answer: Name the underperformance before the client raises it, explain it against the original strategy and timeframe (not just the number), and separate "is this expected volatility" from "does this change our plan." Silence is what erodes trust here — not the underperformance itself. 📈

Here's the moment financial planners dread 💖: a client opens their statement, sees a number they don't like, and calls in already anxious. The instinct is to wait and see if they raise it. The better move, almost always, is to raise it first — a planner who names the dip before the client does looks in control of the situation, not caught out by it.

What Most Financial Planners Get Wrong

The common mistake is waiting for the client to bring it up, then responding defensively once they do — explaining market conditions in a way that can sound like an excuse rather than context. The second mistake is over-explaining market mechanics when what the client actually wants to know is much simpler: does this change anything about my plan?

The Script

"I wanted to flag that your portfolio's had a rougher quarter than usual — down around [X]%, mostly driven by [general cause]. Here's the important part: this is within the range of movement we expected when we set your strategy for a [timeframe]-year horizon, and it doesn't change our plan.

That said, I always want to check in when there's been a noticeable move — has anything changed on your end, like your timeframe or how comfortable you're feeling with this level of movement?"

The final question matters as much as the explanation — it turns a one-way reassurance into a genuine check-in.

A financial planning practice serving pre-retirees: proactively calls any client whose portfolio has moved more than an agreed threshold in a quarter, rather than waiting for the annual review — clients consistently say the call itself, regardless of the news, is what keeps their trust intact.

A practice serving younger accumulators: pairs the conversation with a simple visual showing the client's own portfolio against their original timeframe, so the current dip is seen in context rather than in isolation.

The Mechanics: Timing the Conversation

Set a proactive threshold — a percentage move that triggers an outbound call rather than waiting for the client to notice. Keep the explanation short and put the forward-look question at the end, not buried in the middle of market commentary.

💡 Proactive beats reactive, every time: a planner who calls before being asked is demonstrating exactly the kind of attentiveness clients are paying for — it's the service itself, not just damage control.

Mistakes to Avoid

Waiting for the client to raise the underperformance first
Over-explaining market mechanics instead of addressing the client's underlying question
Failing to check whether the client's own circumstances have changed
Treating every dip the same way regardless of the client's timeframe or risk profile

Please note: general information, not financial advice — any conversation about a client's specific portfolio must reflect their individual circumstances, strategy and current regulatory obligations.

Frequently asked questions

What threshold should trigger a proactive call?

This varies by practice and client base — some use a percentage move, others a dollar figure. The specific number matters less than having one and using it consistently.

Should this be a call or is email enough?

A call for anything triggering the proactive threshold; email is fine for smaller, expected movements covered in a regular update.

What if the underperformance really is due to a strategy issue, not just market movement?

Be honest about that distinction — conflating a genuine strategy review with normal volatility undermines trust more than the original issue would have.

How do you reassure without sounding like you're minimising the client's concern?

Validate the concern explicitly before reassuring — "that's a fair thing to notice" before explaining context, rather than jumping straight to reassurance.

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Written by

Kate, founder of Chronically Online

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