Karma Forrestal, Forum partner and co-founder of the Forum Women’s Initiative, knows that market crises make financial advisors stronger. In the following article featured in the July 2020 edition of FPA Next Generation Planner, Karma recalls her experiences with past financial crises and outlines essential actions for advisors to navigate the ongoing pandemic.

 Article excerpt appears with permission.

Market Crises Have Made Me a Better Financial Adviser

What I Learned from the Financial Crises of the 2000s and My 96-Year-Old Grandfather

By Karma Forrestal, CFP®

Partner, Forum Financial Management

RIGHT ABOUT THE TIME the tech bubble burst, I started working for a financial adviser. It was 2000, and for three years, all I experienced were negative returns at a time when I was just trying to learn about financial planning and investing.

I’ll never forget putting money in my own 401(k) account and watching the balance continue to decline. I thought, “What the heck is this about? Does this actually work?” After that, the markets had five years of positive returns until the financial crisis of 2008–2009.

By late 2008, I was a junior adviser working for an independent adviser. My boss was on vacation on a catamaran in the British Virgin Islands the week that the markets had five consecutive negative days. He was unreachable, and I was the only one in the office to talk to clients who were nervous, scared and only seeing their portfolio values decrease. The phone calls that came pouring in were nonstop, and I was doing my best to keep myself together.

This was absolutely one of the hardest weeks of my life. I was emotionally drained and not sure I truly believed what I was telling the clients (because I was also questioning whether the market would really come back). This period seemed to last forever. It was hard to go to work every day, hearing the same concerns from clients. It made me re-evaluate how clients were invested. Was there too much stock exposure?

Despite our best efforts, some clients tried to time the market. Ultimately, these clients realized they made a big mistake and lost a significant amount of money.

My experience in 2008–2009 made me reconsider the investment approach. I couldn’t sleep well knowing many of our retired clients were losing so much money and large percentages of their net worth. When I decided to leave the firm in 2012 to build my own book of business, many of my decisions were based on my experiences from the 2008 financial crisis.

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This article originally appeared in the July 2020 edition of FPA Next Generation Planner.


About Karma Forrestal

Karma joined Forum in 2012. She was named a Forum partner in 2016. As one of the founders of the Forum Women’s Initiative, Karma is committed to helping women become financially independent. In conjunction with the Wealth Advisor Alliance, she is a mentor for female advisors as they establish and grow their practice. Karma has more than 19 years of experience as a financial advisor working with individuals, small business owners, divorcees and retirees. She describes the client-advisor relationship this way: While expertise is expected, empathy is what people are truly seeking.


We help advisors establish and grow successful wealth management practices. To learn more about how we can help you amplify your life’s work, contact us at team@waalliance.com. You can follow us on Twitter@theWAAlliance and on LinkedIn.

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