2018 Industry Awards Winner 2018 Industry Awards Winner >

How to Help Your Clients With Financial Planning During a Crisis

How to Help Your Clients With Financial Planning During a Crisis

As families all over the nation focus on the health of loved ones, financial advisors play a significant role in helping clients take financial control of their lives. Although our client’s job security, steady income levels, and stock market prices are out of our control, there are several things that we can do. Through crisis comes the opportunity to be more supportive of our clients by easing their financial worries through sound

Here is how we can better serve our clients by navigating them through the coronavirus crisis, so they are ready for long-term success once we emerge from the pandemic.

First, start with a review of your client’s financial plan.

Every five to six years, on average, we experience an economic downturn. As advisors, we never know what is going to cause or when it will impact our lives, but we do know it’s coming. Therefore, it is our job to ensure that our clients have a backup plan for when our economy slows down. Regardless of whether you were able to forecast an economic downturn into your client’s financial plans, there is one thing for sure. We must do what we can to help our clients get through this unprecedented time.

S&P 500 Vs. Recessions Since 1957

Source: S&P

Historically, we have seen higher highs after a pullback in the past. There’s no reason to believe that this crisis will be any different. However, as we experience record unemployment levels and historic job losses over a brief period, our clients can find it difficult to stay mindful of that point. This is especially true as some of our clients face difficulties like job loss, shrinking emergency savings accounts, and continuously changing investment portfolios. As an advisor, there’s no better opportunity to ease fears of the unknown than with a solid plan.

Simply reviewing your client’s current financial situation, where they should be in the future, and what to work toward until that point is enough to reduce their anxiety. How much our clients will need to adjust their plans due to this crisis will depend on their individual situation. Some clients with multiple goals might need to adjust in certain areas, but not all. As stressful as it can be for your clients to make changes to their financial plan, instill confidence that they’ll still be able to achieve their goals. They might have setbacks in the short-term, but with enough planning and consistent work, they can get back on track.

Second, review your client’s budgets and make updates according to their situation.

Second Review your client's Budgets

Source: Gallup

Having an appropriate budget, effectively use your emergency funds, and readying a backup for when your clients use their reserves are more important now than ever before. As businesses start opening back up, there’s hope that the worst is behind us. However, even among the optimism that cases of COVID-19 will suddenly vanish, the truth is that no one knows precisely what will happen nor how long we’ll face this health pandemic. For this reason, it’s necessary to inform your clients of steps they can take to succeed in the short-term.

As a result, there might be some tough conversations coming up. You may find yourself asking questions such as:

  • What are some slight changes you can make to your budget so that you can contribute more to your long-term goals?
  • Are you willing to make smaller payments or eliminate payments that you do not need to make right now, such as with Federal student loans, mortgage payments, and credit card payments?
  • Do you have a backup cash source available to access if your emergency savings fund runs dry?

How much do Americans have in Emergency Savings

Source: Bankrate

While some of your clients might not want to think about these questions, it’s the role of an advisor to prepare their clients for any possible pandemic scenario. Use your position to help your clients consider the short-term and long-term implications of this crisis by reviewing and updating their budget and goals for the future.

Finally, provide the support that your clients need.

According to the Pareto principle, 20% of your clients will need 80% of your focus. When your clientele is a hundred or more people, it’s essential to prioritize who you help each day. Do this by working smarter and not harder.

Start by providing one-on-one time to clients experiencing more significant economic changes or hardships during this crisis. Begin by noticing the people who reach out to you with questions about their situation or concerns with the economy overall. These are the clients you will want to have financial reviews with sooner, rather than later, to ease their fears and help them transition through this crisis.

Next, focus on those that are close to reaching significant major life events. Being close to retirement age, expecting a child, and getting ready to send a child to college are all events that can change financial goals. You’ll want to ensure that these clients receive your immediate attention as well. The better you can help these clients stay on track, the more comfortable they’ll find navigating major financial changes amid a pandemic.

With these two groups in mind, it’s time to focus on everyone else. The best way to do it is to update your website with helpful content, publish content on social media or video sites to stay connected or publish an email marketing newsletter. Your clients will appreciate you answering their most pressing questions, and they’ll know how to reach out if their situation changes and one-on-one assistance is required.

Are you ready to act?

As an advisor, one of the most important things you can do is listen to your clients’ concerns. Changes in financial situations, transitions to different life stages, and adjustments to long-term plans can be stressful enough without a global health pandemic. During these challenging times, the role you play as an advisor is even more significant. You know to ensure your client’s long-term success that surpasses the length of this crisis. It is imperative to be seen as a lifelong, trusted advisor. You can make steps to achieve this through the proactive steps that you take today.

Akhil Lodha Author
Co-founder & CEO StratiFi Technologies

Building the industry standard for understanding portfolio risk through cutting- edge technology at Stratifi.

follow me
Skip to toolbar