The Emergence of Holistic Planning

(COVID) Crisis Management

How advisors can prepare their clients for a long and slow recovery

by Basam Malik

Mr. Malik is a Retirement Plan Advisor at Rehmann, a tax and advisory firm. Visit

In July, The Wall Street Journal published its monthly Economic Forecasting Survey, an important temperature check for the United States economy. Of the 60 U.S. economists polled, a vast majority believed that the economic recovery would take a “Nike swoosh” shape, indicating a sharp drop followed by a long and slow recovery period.

While it is too early to know the true shape of the economic recovery, financial advisors, plan participants and clients have been forced to ask the question “How do we adjust in order to move forward?” The answer: a holistic approach to personal finances, retirement planning and income planning will be more necessary than ever for long-term success.

Reinventing Face-To-Face

From the very beginning of the pandemic, standard operations and the ways that financial advisors interacted with plan participants and clients had to change. Financial planning—a traditionally personal and private matter—has often been conducted face-to-face. This tried and true approach has given advisors the opportunity to build a rapport and a sense of trust with their clients. Integrating video calls in place of these in-person meetings was discussed within many organizations over the past several years, but the concept received pushback from many in the financial community. Once the coronavirus pandemic took hold and businesses around the world began moving to remote operations, financial advisors needed to do the same. The world was changing, and an entire industry based on these face-to-face interactions had to change with it. The move to online meetings was not without its hiccups, but both financial advisors and clients have found success conducting business this way.

Of course, adapting to online platforms was relatively low on the list of obstacles to address. The economy and the needs of clients have been ever-changing, and clients were in need of clear guidance amid rapidly evolving times.
For plan participants and clients that looked at their financials annually and planned reactively, the pandemic brought a need for change. The economic outlook at the beginning of the pandemic was dire, and many individuals were making reactive decisions—tapping into retirement savings early, impulsively selling shares or making disruptive changes to their financial plans—that would negatively affect them for years to come.

As cities went into lockdown and the unemployment rate began to increase, participants and clients were quick to turn to advisors, seeking guidance on what steps could be taken to protect themselves in both the long- and short-term. As if overnight, annual and reactive planners began moving to a proactive approach to financial planning. However, while the downturn was short-lived and the economy began to bounce back, the need for a proactive approach has never faltered. There are still factors that remain unseen—such as the upcoming election, international trade relations and the ongoing pandemic—bolstering the need to plan ahead and remain proactive in financial planning.

Establishing Emergency Funds

Throughout the pandemic, income planning has emerged as a need for individuals looking to ensure stability in both the immediate and long-term. The first consideration in income planning is calculating and managing the client’s household cashflow. As an advisor, you must provide plan participants and clients with income planning counsel that ensures longevity. During any national crisis, employment may be at risk, so having solid footing on household finances is imperative. Given the circumstances, individuals and families may be put in a position where one or both sources of income can be lost.

Once the coronavirus pandemic took hold and businesses around the world began moving to remote operations, financial advisors needed to do the same.

nsuring that participants and clients have emergency funds set up with enough to provide for one to three months without incurring additional debt is critical. While advisors know the need for income planning, the uncertainty brought upon by the coronavirus pandemic adds an extra emphasis for many clients on the need for this approach.

Before the pandemic, many plan participants and clients were receptive to the holistic approach, but now, they are being forced into this proactive model. In order to deliver value and sound financial advising, all financial advisors should adopt this approach or risk being left in the dust.

A Deep Dive Into Budgeting & Planning

The holistic planning approach requires plan participants and clients to do a deep dive into budgeting and planning, including, but not limited to: discretionary spending, income planning, retirement savings and college savings accounts. The pandemic has made everyone much more aware of every dollar they spend, especially as it pertains to discretionary spending, and those spending opportunities have become more scarce for a vast majority of individuals. While in most years people would spend money on vacations, experiences and materials items, many have been left with additional resources in their pocket. Instead of finding ways to spend these funds, many are using a holistic approach to invest them into another part of their financial plan, such as opening a 529 college savings plan or paying off past debt.

Holistic approaches are different for everyone, so advisors need to know the client and the demographic that they are working with. For older participants, this could include social security planning. Younger participants may need a more long-term approach with additional contributing factors. Plan participants and clients will be looking for and expecting holistic solutions that cover all aspects of financial planning, and providers will need to meet the demand.


To help individuals weather the storm, the CARES Act allowed eligible participants to tap into retirement savings—including 401(k)s, 403(b)s, 457s and Traditional IRAs—without incurring the 10% early withdrawal penalty. This allowed individuals to withdraw up to $100,000 from their retirement funds with no penalties. While financial advisors braced for plan participants and clients to go this route—one that is reactive and could hamper long-term success—very few actually resorted to accessing retirement funds early. According to Vanguard and its “How America Saves” report, less than 2% of participants withdrew from retirement accounts as part of the CARES Act. Of those that did, 30% took less than $5,000 from retirement savings.

As advisors, it is important to ensure clients believe they can approach you with transparency—including what hardships they are facing and how they intend to use their funds—if they wish to tap into retirement savings. With this information, advisors can provide alternative solutions. Financial advisors have access to resources that clients may not have or even be aware of. These resources and an alternative perspective can provide financial support in both the short and long-term. At the end of the day, retirement planning is a journey, and funds need to be maintained in order to enjoy a healthy and on-time retirement.

The pandemic has changed the way that many are looking at finances, and a comprehensive solution is the key to long-term financial success. Now is the time to retrospectively look at the past several months—it has become clear that a reactive approach will not provide financial security, and a proactive and holistic view continues to be necessary. Providing participants and clients with the advice and resources that they need to navigate the pandemic will further instill their trust and confidence. No financial plan is resistant to the effects of a crisis, but with sound planning, clients can weather this storm and thrive for decades to come.