Keeping Clients on Track for Retirement


It’s no surprise that the impact of the COVID-19 pandemic is far from over. Although June and July reported positive job reports, the labor market is starting to slow. Last February, Americans had 13 million more actively employed workers. This economy had a positive first quarter contracting 5%, but the second quarter declined a record-breaking 32.9%. However, the equity markets have managed to hold their ground while most indexes finished with positive results in July. On the other hand, the stock market has continued to go up and down, seemingly dependent on the virus’s spread and who’s impacted from day-to-day. Our government is in a difficult spot trying to balance the economic effects and the health of our culture.

Retirement is not as simple as it once was. The National Retirement Institute’s (NRI) April survey stated that investors having more than $100,000 in assets no longer believe that they are secure even if they manage them correctly. Investors are worried about being blindsided at any point. There is a substantial emotional impact from an event such as a worldwide pandemic that can outlive those who lived through it. As this pertains to retirement, people are timid about their next investment options.

What then does one do to retire as planned? We have gathered information from multiple sources to list four tips every investor should consider to survive COVID-19.

Think About the Long Term Explain to clients how a long-term plan can help them meet their goals during different phases of their retirement plan. Things worth focusing on: • Accumulation • Retirement income • Legacy planning • Diversify across asset classes • Tax-diversification (taxable, tax-deferred, and tax-free) investment accounts

Remind your clients they have time. Remind clients about six months after the Swine Flu outbreak in 2009, and the global markets increased by 40%. Six months after SARS in 2003, the markets increased by 23%. After the big Crash of 2008, the markets recovered in four and a half years.

Protect Retirement Income and Portfolios As it stands, younger investors have much more time to account for economic disasters. These investors can still buy when the markets are low and make money over time by long-term compounded growth strategies. The older clients that are close to or already in retirement need a more elaborate plan. Our advice is to listen to your older clients’ concerns, who might already be making withdrawals out of their retirement accounts. This pandemic has left the masses, regardless of age and experience, feeling its uncertainty. Investors are looking for downside protection and guaranteed income solutions exclusive of Social Security and Pensions. With record drops in the market and the new intense volatility, most investors have recognized the need to use annuities for protection of their investments and retirement income.

The goal as a financial advisor should be to create a feeling of knowledgeable confidence in your clients. Trust happens by putting holistic plans in place, listening to their specific needs, and planning accordingly. The right kind of annuities can be a core component for managing market risk while also offering a guaranteed income during retirement.

Understanding Client Concerns At this point, advisors and financial professionals have moved to the top of the list of most trusted sources during the Covid-19 pandemic. Trust is so hard to earn and so very easy to lose. According to Financial Advisor, a nationwide study on the impact of cognitive trust, affective trust, and emotional trust found that trust alone could predict an investor’s motivations when deciding on an advisor or financial professional. The most crucial factor for affective trust is empathy.

Investors realize they need help to manage their finances, and the top three concerns that keep coming up are:

  1. Losing their life’s savings
  2. Being unable to afford health care
  3. Being able to afford to retire

Some great questions to ask as clients and build empathy: • How were you affected by the coronavirus? • What are your long-term and short-term goals? • Are you worried about how the pandemic might impact your long-term financial goals? • Has your comfort level changes around risk? If so, how?

Harness Technology for Human Connection In this new world, there is absolutely no way to manage clients without technology. Especially in this remote environment that has become the new office. Building relationships is still an essential factor in the financial realm. FaceTime, Zoom, Skype, and the like have become the way humans connect during this new social distancing era. It is so important that these tools get used to enhance the client experience, not frustrate it. Advisors need to know how to troubleshoot tech and walk clients through muting and unmuting, how to turn the video on and off, adjusting settings, and things that were never even a necessity one year ago. If used correctly, technology can bring people closer, build more trust, and allow a lot more contact with clients.

There is so much uncertainty these days. Helping clients stay out of an emotional state of mind and feel safe and secure is the end goal. Listening to their needs and educating them on options as well as technology is very important. Clients need and want a financial advisor to help today more than ever. Show up, be consistent, listen, and offer safe solutions. Taking steps to prepare today will benefit you and your clients now and in the future.