Financial health amidst pandemic worries

It appears risk management is back in financial planning vogue. Investor concern regarding the impact of the COVID-19 pandemic on personal finance has created renewed interest regarding a topic that in a pre-coronavirus world was mundane to some.

A recent “CNBC + Acorns Invest in You” survey reports that 75 percent of Americans admit not seeking any professional financial advice let alone thinking about how to protect their personal assets.

For financial advisors like Andrew Cashman, a former attorney who lives and breathes risk management, the questions his clients are currently asking on the subject are as invigorating as a double shot of espresso. The pandemic-driven trend represents a topic in which he is well-versed and highlights a professional passion.

As a Wealth Management Advisor with Cashman Dickerson Financial Planners based in Quincy, Illinois, Cashman told Advisors Magazine that his clients want to know if their assets are safe and if their portfolios can recover from stock market volatility. He sees clients taking a greater interest in how they can use financial vehicles to protect not just their money and investments, but also their lifestyle.

“Since mid-April – after the initial shock of the pandemic in late February and March – people are reaching out again and their minds aren’t so filled with anxiety, but instead with risk management,” Cashman said. “They want to learn more about using disability insurance and life insurance and in some cases, long-term care insurance. They seem to be more understanding that financial planning has to include that.”

Worry has not gone away.

Unofficially, one can see the worry in the eyes of masked shoppers; one can hear it in the limited conversations at the check-out stand; one can spot it when reading social media posts.

Officially, COVID-19’s impact on finances is documented in several recent surveys.

A “USA Today/Ipsos” survey indicates most people are more worried about their financial situation than they are about actually catching coronavirus. The National Endowment for Financial Education reports that nine out of ten surveyed say they are anxious regarding their finances because of COVID-19. Interesting enough, that anxiety did not decrease in higher income brackets. More people – more than half of all Americans – report they are dipping into their savings more than before the virus hit, according to a poll by LendEDU.

But the financial news surrounding the pandemic isn’t all bad. According to Bankrate, 52 percent of Americans stated they changed their spending habits within the first two weeks of the pandemic and 66 percent of Americans did not pull their investment in the stock market as volatility soared.

Cashman strongly advised clients not to panic and make rash decisions based on the ups and downs of the market. And, he capitalized on their newfound willingness to talk about risk management. It is a topic that garnered more of his attention after becoming affiliated with Northwestern Mutual.

“When I am not engaged in the risk management side of financial planning, I feel as if I am doing my clients a disservice,” Cashman said. “I feel that they are missing out on an essential part of financial planning without it.”

The same sentiment applies to tax-efficient planning.

Cashman said too many taxpayers only pay attention to the amount of taxes they will pay once a year – when it is tax deadline time. That’s not his version of tax planning.

“People need to be looking at reducing taxes over a lifetime, not just one year at a time,” he said. “Looking at being tax efficient in their retirement planning and using tools such as a Roth IRAs/401(k)s or whole life insurance to secure money in different buckets is an efficient option. But, unfortunately, not a lot of people know how to fully utilize those.”

As a finance major in college who then earned a law degree, Cashman has a unique perspective regarding money and planning. As a lawyer, he embraced tax law. He earned his master’s degree in taxation at Georgetown University and began his career as a tax planner with an accounting firm. He worked as a corporate lawyer for 12 years, but the desire to be a financial planning professional was always nipping at his heels.

“The whole time I wanted to be a financial advisor. I was always thinking about the possibility,” he said. Five years ago, that possibility became reality.

Education remains a key factor in Cashman’s professional life. He educates himself about his clients – their current situation, their aspirations, their wants, their needs and their resources – and he educates his clients regarding the making of financial choices, ensuring they know the “what” and the “why” of the choices being made to help secure their financial futures.

“Our process is always trying to educate ourselves on the client in regard to who they are, what makes them tick, what their goals are, and then educating the client on how we can better help them,” Cashman said. “Education is what sets us apart. It is our core value to make sure that clients understand all the different aspects of financial planning and how those operate together.”

To learn more about Cashman Dickerson Financial Planners, visit: cashmandickerson.com