AdvisorHub's Publisher & CEO, Tony Sirianni, asked top advisors from leading firms their opinions on the dual management of the Coronavirus and market meltdown crises. Read how these advisors are managing one of the most unique challenges we have faced as a financial community.
Here is how Jason Fair, CFP®, CFDA; Senior Vice President, B. Riley Wealth Management, responded.
So we're in a new and challenging dynamic, where not only do our clients need us more than ever, but we must change the tried-and-true way that we have always interacted with them. How are you handling the challenge of working remotely and managing clients?
The most common tool I'm using is email. I find that it is one of the most effective ways to get a message out to all my clients at once in real time. This is critical, because the information flow with this circumstance is so rapid. As an advisor, your own thoughts about the situation change frequently, so email has been the best way for me to stay in touch with all the evolving news flow.
That said, there is no substitute for picking up the phone and calling a client. It's time consuming, yes, but each client is unique and has his or her own situation; so to serve them best, you need to talk to all your clients as often as you can, especially during a crisis like this.
On another note, I have noticed that most of my clients have been easier to get in touch with, and with the quarantine, they have had more time than usual to focus on their financial accounts. That can lead to tougher discussions while things are not going well. There's no doubt that this situation is unchartered territory for all advisors; yet, in some ways, things feel familiar, because any kind of market decline is scary. As a financial advisor, I'm doing the same things I strive to do all the time:
- Remaining in close touch with my clients
- Taking appropriate action on their behalf if needed
- Guiding them through this time of uncertainty
Is video conferencing effective?
It has been effective for me. Video conferencing is something I was already doing with out-of-town clients, but of course, this is different, because now I'm video conferencing with in-town clients who I normally see in person. The inability to meet face-to-face can make things tough, but video conferencing has been a useful stand-in. Clearly everybody is going to be more familiar with video conferencing when this is all over, and I think it will be more widely adapted going forward.
How do you maintain a sense of normalcy personally and professionally?
You have to try hard at it, and it's not easy. There was a moment around the second or third day of the market unwinding where I realized how bad this could be for so many people on so many fronts. It was already getting bad for the markets and the economy. If you think about it generationally, people my age remember 9-11, but in thinking about something of this magnitude that has affected multiple generations no matter who you are, we've not had anything like this since the second World War.
After a couple of days of being really down, I realized that ultimately this crisis has a finite time limit to it. The markets have proved resilient through all other previous disasters, and I believe this time will be no different. That said, I've made a conscious decision to think about things one day at a time - not "the next 30 days that I'm in quarantine."
Every day as a family we try to talk about at least one thing we are grateful for. In the end, I think one of the most important things to arise from this crisis will be a fresh perspective on our lives; one in which we all appreciate the things we have a little more. Those are the things I think about in order to keep my sanity and sense of normalcy: taking everything one day at a time and being appreciative for the things I do have.
People who have never done this job don't really understand how much psychology we do every day; how close we have to get to our clients to get them to tell us about their hopes and dreams and plans, nor do they realize how closely the physical fears of coronavirus and the all-too-real fear of financial ruin are so closely related. How are your clients reacting to the dual threat of covid-19 and the market crash?
Whether it's my client or anyone, by and large, people are scared. While the fear has subsided a little because we've gone from the shock at what this might be to the realization that we might be at home for at least 30-60 more days, every part of our lives that we are used to is completely different.
Clients are scared. As a financial advisor, you have to dig in, have strong conviction about what you really believe in, and, you have to convey that to your clients. Clients must believe that they can trust you to guide them through all these circumstances, and that you know them well enough to do so. Understanding your clients' needs is the foundation of what we do. So yes, it is critically important to know your clients as well as you possibly can. Then you can help them meet their emotional needs in the middle of a financial and health crisis.
I think some people look at our careers and think it's an easy career choice; that we just sit and chat with clients, but when crises hit, it's 12-15-hour days, and talking to clients at all hours. One of the more difficult things I've had happen during this crisis was an evening call that I had with a client who was bawling on the phone with me because she was just so scared. You need to be in a good position yourself to react to that.
What are you telling them?
While the general advice for most investors is to stay the course with a well-conceived investment plan, there is also no shortage of unique situations where a client might need to react and take action in one form or another. When I need to reassure clients, I point to historical events that may have been as frightening as this, e.g. the financial crisis of 2008, and I remind them that not only did we recover from it, but we recovered nicely.
Also, long-term investment plans are developed with the idea that these kinds of events can happen. So, as long as you've planned appropriately in terms of risk, the advice is mostly to stay the course. There is a thing we as advisors always hear in times of crisis, which is, "this time it's different." Yet, it's always the same at the end: recoveries happen. While the market declines feel terrible right now, history has shown us that there is always a rebound. As such, there is no substitute for a good, well-conceived investment plan, and sticking with that plan, even in the face of what feels like an impossible circumstance.
What about your business? Are you just "maintaining" or are you growing?
I'm mostly maintaining, but I have had some new client money come in. I'm not out there prospecting new clients right now, mainly because there just is not time for that. I have brought in some assets, however, because there are always clients sitting on cash who understand the kind of opportunity that a disaster might bring.
Is there an opportunity to build your book because other brokers are afraid to pick up the phone right now?
While I'm not actively seeking such opportunities, I did talk to a client today who was with her friends discussing how happy she was because we've been in touch. Her friends mentioned they had not heard from their advisors, and they were disappointed by that.
Obviously, the right thing to do is to stay in close touch with clients. There probably are advisors who have crawled under a rock, unfortunately. They are afraid to call clients because they know they are in pain right now, and the conversations might be tough.
With anything you do, however, it's imperative that you're in touch with your clients. There will doubtless be industry fallout from this. Marginal advisors will not survive, nor will advisors who fail to do the right things for their clients. Given that our business is already facing a bit of an advisor shortage, it's too bad.
Things are down, but somebody must be making money. Where do you see opportunity in the market?
I think there is a lot of opportunity. I am repositioning some clients, mainly into some higher quality growth names and funds that are down but haven't declined terribly. I think the parts of the market that were stronger coming into this crisis are the ones that will rebound most quickly. While there are some compelling names in the value part of the market that have gotten clobbered, especially in the hardest hit industries like energy and leisure, you have to be very selective because there are obviously going to be businesses that don't survive this. I think there are also some nice opportunities for income-oriented investors with preferreds, and in certain parts of the fixed income market, particularly municipals. But again, you must be selective.
Do you have any sense of where to invest post-crisis?
I am investing right now, intra crisis. I believe that on the back side of this, the parts of the market that were already favorable will continue that trajectory. For instance, technology has not been hit as much as the rest of the market, and it will likely rebound better. Many companies will benefit from the "work from home" evolution. I am sure there will be some big winners there.
What's been the most useful piece of technology or advice that you could suggest to other advisors who are trying to cope in these circumstances, particularly some technology or business practice that you have discovered or rediscovered during this crisis that you will use in your business going forward?
What I've realized is that videoconferencing is a tool I can use moving forward because it's a huge time-saver. While there is no substitute for being together face-to-face, time has become so critical for everyone. For some of my clients with high-profile and time-consuming jobs, videoconferencing is a great alternative, because they might not have two hours to leave their offices and meet with me. I am looking forward to integrating video conferencing into various parts of my business going forward for sure.
I've got a feeling that we are getting to know each other a little better these days. Whether we hear kids and dogs in the background of a conference call or see some interesting choices in clothing and grooming on Zoom, we are "getting real" with each other in an out of the corporate world type of way. I'm seeing the best advisors create truly holistic experiences for their nervous clients. They're helping folks in ways above and beyond what a "traditional" financial advisor would normally do.
For me personally, I start with my passion for estate planning. As a result of this COVID-19 crisis, older people are feeling more vulnerable, and some younger clients have brought up estate issues too, because they are examining their mortality in ways they never did previously. You never know what circumstance can change your life in an instant, and I think clients are starting to feel that a little more now.
On a more positive note, one non-traditional way I have let my older clients know I was thinking about them was to send out jigsaw puzzles from Amazon to give them something to do during the quarantine.
What's happening in your world during this crazy time that you will take with you into the post COVID-19 world that will help you grow your business and deepen your client relationships?
This pandemic will influence us all for the rest of our lives. Hopefully we will learn from it, and when it's all over we can put it in the rear-view mirror and focus on the good things we do have. Understanding that there are some positive things happening through this crisis has helped me to cope, and I think it's helped my clients cope, too.