Advice for Advisors as they continue to navigate through COVID-19

Precious few of us were around as eyewitnesses back in 1918 when the Spanish flu pandemic took the lives of 50 million people around the world. The economy suffered as stock markets were sent into a tailspin.

While financial advisors today have helped clients weather other storms such as the 2008 housing bubble burst, the September 11, 2001 terrorist attacks, and the 2000 crash, most of today’s advisors have not witnessed stock market volatility in conjunction with a health crisis such as the COVID-19 pandemic.

Those facts beg the question: How can advisors help clients who have dual worries now – their health and the health of their finances. The answer: Stick with what you already know how to do and have been doing.

Demonstrate Leadership

Jeff PS 7249“This is the time for us to become the voice of reason,” said Jeffrey E. Bush regarding what actions financial advisors can and should take to guide clients through unprecedented times. “We emphasize the original plan that we put in place and the expectation that there will always be market volatility.”

As the managing partner and chief operating officer of Informed Family Financial Services located in Norristown, Pennsylvania, his nearly three decades of experience as a financial advisor has seen its share of the ups and downs of the stock market.

At the beginning of the COVID-19 pandemic in March, Bush said he and his staff reached out to each client to remind them that the emergency planning agreed upon when the markets were not in crisis was already in place and ready to go.

“It was important for us to listen to any concerns our clients had, but at the same time we had to be the voice of calm and reason,” he said. “We have managed through market volatility in the past and we drew on our previous experiences to help navigate through this crisis.”

Engage with Clients Even More Than Before

When you are circling the financial wagons to deal with the threats COVID-19 brought to everyone’s financial security, it is important to not go hide inside the wagon.
Unfortunately, some advisors do take a “duck and cover” approach when challenges come along.

5bbe248f f419 4283 b55d c5bf8de28756But according to Marilyn Suey, principal and CEO at the Diamond Wealth Advisors Group located in San Ramon, California, being proactive is the best approach during difficult times.

When the global pandemic led to shelter-in-place orders, her firm started a weekly Friday at noon call for clients to join in and ask their questions and to hear the firm’s perspective regarding then current market activity and other impacts brought on by COVID-19. They talked about the effect of businesses being closed as well as how to navigate the federal CARES Act (Coronavirus Aid, Relief and Economic Security). The firm named the weekly forum, “Ask Marilyn-Your Money Matters and More.”

“Our clients came away with not only knowledge, but a sense of calmness, even though the information, the unemployment data and the impact of the virus was all around us,” she said. “We have built a following of both clients, colleagues and prospects who feel safe to ask questions, to comment and to add their observations. The engaging level is very rewarding.”

Be Prepared for the “What-If” Scenarios

Financial advisors have this in common with their clients: They need to be ready for the “what-ifs” of life.

Mark Berger, who is principal with the Berger Financial Group based in Plymouth, Minnesota, did not have a heads-up back in January that a major health and financial crisis was coming just two months later. But that did not stop him from doing what he does at the start of every year: run a disaster plan stress test for his own firm.

“Knowing which expenses can be cut is key,” he said, noting that, “Often things like marketing and travel (can be eliminated first) rather than valuable and skilled employees who should generally be the very last resort to let go. Often it might be more appealing to take a salary cut equally on a percentage basis across-the-board as compared to lose valuable colleagues.”

Berger said it is essential to make these decisions well before their implementation is needed. He said that “the emotion of the moment” makes it difficult to make rational plans. Not only is it better to make the plans ahead of time, it is paramount to then share those plans in a highly transparent manner with the staff that would be impacted by the implementation of those plans. He said doing so has shown itself to be not only stabilizing financial for his firm, but it also inspires confidence for his staff in that they know what will happen if certain triggers are pulled.

In Conclusion

Clients will follow your lead. If you as an advisor are feeling concern or fear regarding the financial impacts of COVID-19, be honest with them. But follow that up with the reassurance that you have done their planning in conjunction with their goals. Communicate regularly and be ready to respond to whatever comes along.

And remember … in the past 100 years, there has not been a market downturn that did not rally with an even greater increase.


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