Pandemic & Planning

Crisis Consultants

The changing role of financial advisors in the era of COVID-19 and beyond

by James Russell and Matthew Billitti

Mr. Russell and Mr. Billiti are Advisors with Rehmann Financial Network. Securities offered through Rehmann Financial Network, LLC, member FINRA/SIPC. Investment advisory services offered through Rehmann Financial, a Registered Investment Advisor. Visit www.rehmann.com

Every generation has confronted a crisis of one kind or another—the Great Depression, the 1973 oil crisis, and the subprime mortgage crisis, to name a few. Each one fundamentally changed our country’s collective behavior, and it’s safe to assume COVID-19 will do the same.

As financial advisors, it is our duty to anticipate our clients’ current and future needs, while providing proactive solutions to help clients meet their goals. The advice, answers and guidance we provide are meant to take the stress out of the challenges and even crises clients face. We’re there when clients need us—even more so when disaster strikes.

With our nation transitioning to life as we know it amid COVID-19 so too has our role as financial advisors. Some advisors will face unthinkable personal or financial hardships, which impact far more than their professional lives. For others, the biggest changes we will face are largely superficial.

Working Remotely

The first change, for many of us, was the logistical transition to remote work. We learned to adapt to working with children and pets in the background and altered how we approach client service.

We’ve seen a surprising and swift adaptation to the use of technology. While videoconferencing software and messaging platforms have long been available, they were rarely used with any consistency before COVID-19. Embracing available platforms early has been helpful to many advisors in the adjustment process. At Rehmann, we are communicating even more than before with our clients—we are on frequent video calls, sharing ideas and knowledge faster than ever before. We believe over-communicating is essential in serving our clients. There is a dire thirst for knowledge, and we want to ensure all bases are covered.

Many will continue to face emotional questions from clients who want to increase or decrease risk with investments during market turmoil. As advisors, we need to be prepared to help clients make sound decisions and stay on course. Leverage your established relationships to have candid conversations with your clients. Remember, you’re in this together. Encourage clients not to get greedy or overly cautious, even during a pandemic. The market will always fluctuate, and there will be growth and decline. Longevity is the goal in our business: slow, steady growth and planning.

Building Trustworthiness & Perseverance

If you don’t have rock solid relationships, now is the time to build them. Showing trustworthiness and perseverance in crisis is an effective way to lay the foundation for a strong relationship in the future. Offer timely and well-rounded information. For example, we have partnered with Chambers of Commerce in Michigan, Ohio and Florida to conduct webinars across various states and cities, created e-newsletter alerts for COVID-19 announcements, launched a podcast and created a robust COVID-19 resource center. Resources should be available and easy to digest for clients. Focus on mediums where your clients will be best served and have easy access—the last thing anyone needs right now is further confusion or added stress.

In some ways, the stock market crash in 2008 prepared many people for the uncertainty we’re experiencing now. During that time, many struggled with cash flow, struggled to grasp the undetermined timeline of lasting impact and a loss of comfort and trust in the nation’s overall economy. The benefit of our current state is knowing the exact cause of the fluctuations...

It can be a challenge to keep up with changing information. We created an economic response team to stay abreast of new legislation and develop new ways to share the information as quickly as possible. All the information we have developed is available online for worldwide visitor’s needs.

While many of your financial services are the same, the outreach should be different, particularly with business clients. With new government updates being announced daily, listen in real time to a make sure you are giving proper guidance to clients and making informed decisions. Many clients’ needs will continue to shift as updates on the CARES Act and Paycheck Protection Program become available.

Understandably, clients continue to be concerned over the current market. As advisors, we are navigating the new territory as well. It is important to keep clients calm, even though we are not immune to the uncertainty.

Remind clients to stick to their plan—it’s a matter of focusing on long-term success. It is an unusual time, but there is no choice but to leverage the advice of trusted advisors and control what we can control.

Recalling 2008 Crisis

In some ways, the stock market crash in 2008 prepared many people for the uncertainty we’re experiencing now. During that time, many struggled with cash flow, struggled to grasp the undetermined timeline of lasting impact and a loss of comfort and trust in the nation’s overall economy. The benefit of our current state is knowing the exact cause of the fluctuations—the market is a direct byproduct of a global pandemic. Knowing the “why” has helped many of our clients find peace of mind.

As we look to the future, it is still difficult to know what the economy has in store. As businesses begin to reopen, there is no telling what the market will do. As financial planners, we add value by planning for all potential scenarios upfront. Help clients set realistic post-pandemic expectations. Continue to exercise empathy as many clients experience extreme financial and personal hardships. Remind them to prioritize the things they can control, including their personal relationships and their plans for rebuilding.

We are people first, and we are in a relationship-centric industry. Now more than ever, we are amid a shared human experience that impacts us all in different ways. Approach your clients as a person first and remember your shared goals for the future.

The last few months have shaken many to their core. As we rebuild, we will be forced to reevaluate many client strategies as we see what the long-term effects of this pandemic are on the economy. Many will see the value in a trusted financial planner as a guide post for the current happenings. Though it’s hard to imagine now, there will be an end to this current uncertainty and an opportunity to reenergize and reinvest. For now, advisors would do well to stay in frequent contact with clients, keep up to date on changing information, and control what you can control. Brighter days are ahead.