Market Drop Opportunity Discovery

Advisor Reference Card

Keep this on the desk. Two pages. Everything needed to run the meeting.

PAGE 1 — THE MEETING

Flow — 45 minutes

	Stage	Min
1	Frame	5
2	Hand over the harmful list · let them read	8
3	The numbers, pre-run in the Quantifier	20
4	Fill in and sign the plan	12
5	Monitor · review date · the ask	5

Stage 1 — The three opening lines

“Declines of 20% or more have arrived roughly every six or seven years. I have no idea when the next one comes, and neither does anyone else. What I do know is that almost everything worth doing has to be decided beforehand.”

“Most advice about declines is about not panicking. That’s fine and it’s incomplete. The bigger problem is that people do things during declines that feel careful and responsible, and that permanently destroy value. Some can’t be undone at any price.”

“There’s also a set of things a decline gives you that are certain — they pay whether or not markets recover. Most people never collect them. That’s what we’re going to work out today, in your actual numbers.”

Never predict. Not once.

Stage 2 — The harmful nine

Hand it over. Stop talking. The reaction to items 5 and 6 is the hook — most people have done one or nearly did.

☐ 1 Selling to cash at the bottom ☐ 2 Stopping contributions ☐ 3 Cutting employer-matched contributions ☐ 4 Waiting in cash for a better entry ☐ 5 Withdrawing from a TFSA — room comes back in dollars, not units ☐ 6 Transferring depressed holdings in kind to a TFSA/RRSP — loss permanently denied ☐ 7 Donating depreciated securities in kind ☐ 8 Permanently lowering the target allocation ☐ 9 Averaging down on one failing company

The through-line: they look like prudence and function as permanent loss.

Stage 3 — Delivering the numbers

Lead with recoverable tax. Say it plainly:

“That’s cash back on tax you’ve already paid. It doesn’t depend on the market recovering. It’s the closest thing to certain in this conversation.”

Then move the slider. “That’s at 30%. What if it’s 40%?” — the client seeing the number respond is worth more than the number itself.

Then the deferred change. “A decline doesn’t create this opportunity. It removes the toll gate that’s been stopping you.”

Two one-liners, not calculations:

Room: at a 30% decline, the same dollars buy 43% more units, and the recovery is sheltered permanently.
Buffer: ask “how many years of spending do you hold in cash?” — under two is the finding that matters most in the meeting. A client who must sell to eat during a decline cannot also be buying.

PAGE 2 — HANDLING, ASKING, BOUNDARIES

The 2022 objection — expect it

“The last bear market broke almost every rule people get told. Stocks and bonds fell together, rates went up instead of down, there was nothing to rebalance into, and borrowing got more expensive. Any plan that assumes rate cuts would have been wrong. That’s why the plan we’re writing separates what pays regardless from what only pays if rates fall.”

Anything rate-dependent — refinancing, consolidation, variable-rate relief — is off the table unless rates are actually falling. Check before recommending.

Three lines that land

“Half the declines that reach 20% never reach 30%.” — for the client who wants to wait for a deeper bottom.

“I tested the most appealing idea I found and it failed.” (Buying options on the recovery at the −30% trigger: four times the money across four events — but a 70% loss if you remove March 2020 alone. Two of four went to zero.) — when credibility matters more than optimism.

“Waiting in cash for a better entry underperformed staying invested in more than 60% of tested variations over sixty years.” — for the client who wants to raise cash now.

Stage 4 — The plan

Fill it in together, in the room. Get the signature.

A plan the client watched being written and then signed is a different object from one emailed afterward. That difference is the entire mechanism. Do not skip it.

Stage 5 — Referrals

Hints — two or three, placed during stage 3, tied to a specific finding. Never criticize another advisor.

“Most people never hear about this one. It isn’t that their advisor is doing anything wrong — it just isn’t part of a standard review.”

“This is the part that surprises people. It’s usually worth more than picking a better fund.”

The ask — after the signature, not before:

“One last thing. You now have a written plan and a number, and most people will have neither when the next decline comes. Is there anyone you’d want to make sure isn’t caught without one?”

Then give the memory triggers — “do you know anyone” is answered no by default:

“Usually it’s someone who’s just retired, or about to. Or a business owner. Or someone who’s changed jobs and has an old group plan sitting somewhere. Or honestly, anyone who’s been nervous about markets lately.”

Then stop talking. The silence is the ask.

Make it easy: “If anyone comes to mind later, the simplest thing is to forward them this” — hand them the branded harmful list.

Never: ask for a number of names · ask for contact details in the meeting · offer an incentive · follow up more than once.

Boundaries — what this process excludes

No leverage in any form. No product recommendation. No suitability determination. No forecast.

This is planning and education. Anything involving borrowing requires a separate process.

Before you leave the meeting

☐ Plan signed, client has a copy ☐ Checklist handed over ☐ Harmful list handed over (the forwardable piece) ☐ Enrolled in the monitor ☐ Annual review date booked

Within 24 hours: one-paragraph email with the headline number, a scan of the signed plan, monitor confirmation.

The client-first test for everything above: would this exchange still be appropriate if the client could see your notes?