The world has turned on its head this past month and the financial markets are experiencing wild volatility.  It is during these times that clients lean heavily on their financial advisors for advice. Traditionally, advisors often rely on historical data and averages accumulated over long investment periods to determine how best to allocate their clients’ portfolios.   Despite periods of volatility and inevitable bear markets, properly managed portfolios generally perform over time.   

These past few weeks have caused significant stress on everyone. Not only are we dealing with a global pandemic and the related effects on our day-to-day lives, but we’re also watching our collective net worth go on a wild roller coaster ride.  As all of us do our part to ‘flatten the curve’, we are hoping at some point soon that a new normal will set in, and all modes of volatility – whether it be market, emotional or stress-based – will start subsiding. At this point, we hope that we can settle into and adjust to a new normal’ for the next weeks or months until we make it through to the other side. 

 Transitions and Opportunities

During this transition period as we wait for the corona crisis to pass, there may be opportunities for advisors to further solidify their relationships with their clients. This recent market turbulence has likely increased your clients appreciation of you, and has made them realize how important you are to helping them achieve their life goals. Perhaps take this opportunity to address various planning initiatives. Examples include: 

  • Everyone’s health is front of mind right now. Does your client have a living will? A healthcare power of attorney? Do they need to be updated? Who is named as agent? Does that still make sense? Do you and your client know where these documents are? Remind your clients to locate them, know what they say, and make sure other family members know where they are and how to access them. Does your client have college-aged children? Do they have appropriate HIPAA waivers to allow parents to have access to their children’s medical issues and care decisions? 
  • Cybersecurity is extremely important during this time when everyone is at home, often alone. It’s important that your clients be extremely vigilant during this time, as cyber-scams and phishing expeditions are on the rise in an effort to take advantage of people during this time. These include messages that appear to be from the CDC and WHO. Everyone should ‘think before they click’ and avoid opening attachments to text messages and emails.  If they’re from someone they know, they should call that person and confirm before opening.  
  • Lower asset valuations as a result of this recent market volatility may provide significant planning opportunities. These lower valuations – coupled with the current favorable tax laws, estate gift tax exemptions and historically low interest rates – may provide your clients with unique windows for, among other things, gifting assets to children, creating Grantor Annuity Trusts (GRATs), and refinancing loans to family members.   
  • All of us are doing our part by social distancing and complying with our local shelter-in-place ordinances. Many of your clients may want to do more, but are struggling with how to help make an impact. Check out National Center for Family Philanthropy for ideas. Perhaps also identify local causes that your clients can contribute to, whether it be through their time, talent or treasure. Remind them how important it is to support their local small businesses.  
  • Remind your clients about the recent extensions to tax filings and how that may benefit them.  

Hopefully these examples are helpful and allow you to offer some silver linings to your clients during these difficult times.  We continue to send you and your families our best wishes. Stay safe and let us know how Genivity can continue to help you and your clients navigate these new and unchartered waters.