Financial Advisers During Covid-19

financial advisor and client wearing masks

Now that we are months into the scourge of Covid-19, businesses across every sector have been turned upside down by shutdowns and stay-at-home orders. Across America countless small businesses have closed down, many of them permanently. Even storied retail chains have filed for bankruptcy over the past few months. In order to stay afloat, nearly every business, including financial advisers, has had to rethink how it will do things going forward.

Clients Need More Attention During Uncertain Times

Understandably, a public health crisis that has the power to upend financial markets would make even the steadiest investor a bit skittish. For this reason, this is actually the perfect time to reach out and engage with your clients. After weathering these types of crises in the past, John Savadjian knows that clients are just as likely to need emotional as well as financial support to help them remain calm. In other words, there is no such thing as too much communication these days.

  • Schedule zoom meetings – Through video conferencing platforms such as Zoom, you can schedule regular meetings in which you can reassure clients and address any concerns they may have. This is also a good time to update their financial planning models and show them how to stay on track to reach their goals even when the market is not cooperating.
  • Launch Your Own Podcast – To improve client communications, you might take advantage of technology to try something different like creating your own podcast. For industry leaders, podcasts represent a great way to deliver valuable financial advice to their target audience. One financial adviser records half hour information sessions over Zoom and then sends the recording out to her clients; she also posts it on her practice’s website. Through this medium, she cover the latest market developments and other relevant issues such as a new stimulus package or the Paycheck Protection Program. As a result, she remains in touch with her clients while giving them valuable advice on issues currently affecting them.
  • Create downturn survival plans – If you have not done this already, this would be a great time to start. As a financial adviser and insurance broker with decades of experience, John Savadjian believes every client needs a downturn survival plan to help them navigate difficult times.  You can start by looking at a client’s annual withdrawal and comparing it to their fixed income. A good rule of thumb is to make sure clients have enough invested in safe cash e.g. CDs or high-grade bonds that will cover the next three years of spending. With this kind of preparedness, they can avoid the trap of withdrawing money from stocks at a significant loss during a market downturn or a public health catastrophe like Covid-19. Moreover, it should reassure your clients that you are looking out for their best interests, especially in the worst of times.

Has Financial Advice Changed Due to the Coronavirus Outbreak?

One of the things that I am seeing is a greater emphasis on planning for long-term financial health over investment returns.  With small business clients for example, financial planners can advise them on how to use their Paycheck Protection Program loans to keep their employees and their businesses afloat. In other words, advisers are using their business acumen more often to provide guidance instead of relying heavily on investment returns as a gauge of their success.

The positive side of this public health struggle is that it has moved our industry forward. Both financial professionals and clients have adopted technology that will make interactions easier and more efficient long after Covid-19 subsides. It has also allowed for a renewed focus on reconnecting with clients and making sure that their portfolios continue to address their needs during both good times and bad.