How to talk to clients about inflation
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AS FINANCIAL advisers, we often have clients coming to us with various questions about gross domestic product, unemployment, interest rates, consumer consumption, and how these numbers can affect the market and their investments. I like to be prepared and have the current figures ready for my clients, as well as the context to help answer their questions.
Lately, clients have noticed the rising costs across many of their expenses: groceries and rent, to name a couple. Naturally, they may be frustrated and turn to us to help them understand what’s going on. Why is everything more expensive? What’s causing record-high inflation?
Such discussions require that we have more than a quick stat or two at the ready. There is a lot of context we may need to fill in to explain the current situation. We might have to sit down and explain the many correlations, relationships, and effects of rising prices. What is really happening in the economy right now? How will central banks try to solve it? Can they?
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