The Questions Clients Ask During Market Selloffs

The Questions Clients Ask During Market Selloffs

September volatility can turn ordinary market noise into panicked client calls. The best response isn’t reassurance. It’s evidence, context, and a clear framework for deciding when risk has actually changed.

The Headlines Feel Worse Than the Market

A client sees three ugly headlines before breakfast. Treasury yields are rising. Oil is moving. Stocks were down yesterday. Someone on television says recession. Another says inflation.

Then the phone rings. “Should we sell?”

Here’s what makes these conversations difficult: the client is usually asking about the market, but the advisor first has to determine whether the problem is actually the market.

• Has the client’s income changed?
• Does the client suddenly need cash?
• Has the time horizon shortened?
• Has nothing changed except the account balance and the headlines?

Those are very different situations. And sometimes the most useful thing an advisor can discover is that the market itself isn’t behaving nearly as badly as the client believes. That is exactly what happened when we asked DeepVest AgentLab to prepare an advisor for a selloff conversation.

An AI investment platform for RIAs should do more than summarize market news. It should help the advisor determine what is happening, what could make it worse, what evidence would change the conclusion, and how to explain all of that to a worried human being.

In this case, the first finding was unexpected:

The “selloff” was largely in the mood, not the market.

The Prompt We Put Into DeepVest AgentLab

I am a Registered Investment Advisor preparing for client conversations during a sharp market selloff. I do not want generic reassurance. I want an evidence-based briefing that helps me separate normal market fear from a genuine deterioration in the investment environment and gives me clear, defensible answers to the questions clients are asking right now.

Clients are asking: Why is the market falling? How much worse could it get? Should I sell now? How long do corrections normally last? What normally happens after the market falls 10%, 15%, or 20%? Is this selloff different from previous corrections? Are we heading toward a recession? Are bonds still providing protection? Should I raise cash? And could this decline eventually create opportunity?

Using current market data and historical S&P 500 (SPY) evidence, build an advisor-ready selloff briefing around one central question:

Is the current decline primarily a normal repricing and supply/demand event, or is the evidence showing a more serious deterioration in fundamentals that should change how an advisor thinks about risk?

Analyze the current environment using specific numbers for interest rates, inflation, earnings and earnings revisions, valuations, credit spreads, volatility, market breadth, liquidity, economic growth, unemployment, and any other indicators that materially distinguish an ordinary correction from a more dangerous bear-market or recessionary episode.

Then backtest historical S&P 500 declines of at least 10%, 15%, and 20%. For each threshold, show:

• How frequently these declines historically occurred
• Median and average decline
• Average and median time from the initial decline to the market bottom
• Average and median time to recover the prior high
• Forward returns after the decline at 1 month, 3 months, 6 months, and 12 months
• Median returns
• Win rates
• Best subsequent rebound
• Worst subsequent outcome
• Sample size and important statistical limitations

Do not stop at the historical averages. Explain why markets can move violently in both directions during selloffs. Analyze the supply/demand mechanics behind panic selling, forced deleveraging, margin calls, systematic and fund flows, hedging activity, short covering, liquidity withdrawal, seller exhaustion, and buyers returning after prices fall. Explain how these forces can cause prices to temporarily move further than fundamentals alone would justify.

Also explain the behavioral side. Show how loss aversion, recency bias, action bias, and fear can lead clients to want to reduce risk only after prices have already fallen, and explain the financial risk of making a permanent portfolio decision in response to a temporary emotional state.

Also explain the behavioral side. Show how loss aversion, recency bias, action bias, and fear can lead clients to want to reduce risk only after prices have already fallen, and explain the financial risk of making a permanent portfolio decision in response to a temporary emotional state.

Then make the analysis decision-useful:

1. Rank the five most important facts an advisor should communicate to a worried client right now.

2. Identify the five signals that would make this selloff materially more dangerous than a normal correction. Separate signals that are currently present from signals that aren’t.

3. Identify what evidence would make the outlook improve. Tell me what numbers or conditions I should monitor rather than simply saying "wait for things to get better."

4. Answer the five questions clients are most likely to ask during the selloff. For each question, provide:

• The direct answer in one sentence
• The numbers supporting it
• The important caveat
• A plain-English explanation an advisor could actually say to a client

5. Clearly distinguish three different situations:

• A client reacting emotionally to falling markets
• A client whose financial circumstances or time horizon have genuinely changed
• A market environment where the underlying evidence has deteriorated enough that risk deserves to be reassessed

End with a 10-minute advisor meeting-prep brief containing:

• The first thing I should say when the client calls
• The three numbers the client should understand
• What I shouldn’t say
• The questions I should ask before discussing any portfolio change
• The evidence that would justify reassessing risk
• The evidence that argues against reacting to the selloff
• A concise advisor-ready conversation script
• A short follow-up email I could send after the meeting

Use specific numbers, historical base rates, and current evidence throughout. Explicitly distinguish fact from inference and base rate from forecast. If the data is mixed, say so. If the sample size is small, say so. Challenge the client's premise when the evidence doesn’t support it rather than simply validating the fear.

The goal isn’t to predict the exact market bottom. The goal is to give an advisor the evidence, framework, and language needed to help a client make a rational decision when markets and emotions are both moving quickly.

Do not make any specific investment recommendation.

The Response DeepVest Produced

Schedule a demo with DeepVest to see how AgentLab can turn market data, historical base rates, risk signals, and client psychology into a meeting-ready briefing.

The Most Useful Answer Was “That Is Not What the Data Shows”

There’s an important lesson buried in this exercise: DeepVest didn’t accept the premise. The prompt said the advisor was preparing for a sharp market selloff.

DeepVest looked at the numbers and said, essentially:

No. Not yet.

SPY was only 1.22% below its 52-week high. The VIX was 14.10. Credit spreads were near their tightest levels of the past three years. Breadth remained broad. That’s a very different starting point from “The market is crashing. What should we do?”

Good analysis should occasionally disagree with the question. Otherwise it’s just a more sophisticated form of confirmation bias.

Give the Client a Dashboard, Not a Prediction

Clients want to know what happens next. Nobody can reliably provide that answer.

But an advisor can provide something arguably more useful:

What would have to change for us to become more concerned?

DeepVest identified five places to look.

• Credit spreads
• The yield curve
• Employment
• Market breadth
• Volatility

Now the conversation becomes measurable. Instead of saying, “I think everything is probably fine,” the advisor can say:

“Here are the indicators I am watching. They’re not flashing today. If they change, our assessment changes with them.”

That’s psychologically powerful because uncertainty becomes observable. The client no longer has to react to every headline. There’s a scoreboard.

Why This Matters During September Volatility

Volatility has an unusual effect on time. A 1% market decline can feel enormous at 10:30 in the morning. By the end of a 20-year financial plan, it may be almost invisible. Clients experience the first clock. Advisors have to manage both. That’s why the question “Should I sell?” usually needs another question before it needs an answer:

“Has anything changed for you?”

If the client lost a job, needs cash within 12 months, or has discovered that the risk in the portfolio was never tolerable, the plan may need to change. That deserves attention regardless of where the S&P 500 trades. But if the only thing that changed is fear, treating the emotion as new financial information can turn a temporary market move into a permanent portfolio decision. The distinction is simple. It isn’t always easy.

What an AI Investment Platform for RIAs Should Do Before the Client Calls

An advisor could build this briefing manually.

• Pull SPY data.
• Check the VIX.
• Review credit spreads.
• Look at breadth.
• Check Treasury yields.
• Review inflation.
• Read the payroll report.
• Analyze the yield curve.
• Test historical 10%, 15%, and 20% declines.
• Calculate forward returns.
• Study stock-bond correlations.
• Decide which signals matter.

Then translate all of it into language that doesn’t sound like an economist reading a spreadsheet to a frightened client. That’s a lot of work for one phone call.

DeepVest compressed those pieces into one decision-oriented workflow. However, speed is only part of the value. The more important part is hierarchy. It distinguished what looked scary from what was actually deteriorating. It separated present risks from absent ones. It identified what data was stale. It admitted which requested statistics it couldn’t calculate. It gave the advisor thresholds that could change the conclusion, and it produced language the advisor could use with a client. This isn’t another claim that AI makes advisors more productive. This came from a real client question. DeepVest calculated the real numbers, created a decision framework, and a conversation that can be had with the client.

The Question Behind the Question

During a volatile market, the client asks:

“What is the market going to do?”

But that’s rarely the only question.

Underneath it may be:

• “Am I going to lose what I worked for?”
• “Are we still on track?”
• “Do you see something I don't?”
• “Are you paying attention?”

That’s why data alone isn’t enough. The advisor has to translate evidence into confidence without pretending certainty exists.

The strongest line in the entire briefing may therefore be the first one:

“I'm glad you called. Let's look at what the numbers actually show before we touch anything.”

There's reassurance in that sentence, but it isn’t empty reassurance. It tells the client there’s a process, there’s evidence, there are conditions that matter, and someone is watching them. That’s what clients need when the market gets loud.

Schedule a demo with DeepVest to talk with our team about how DeepVest can help your firm prepare for difficult market conversations with data, context, and advisor-ready analysis.

For questions, contact: [email protected]