Covid-19 Client talking points
The following responses are some we picked from the responses to the Covid-19 survey we recently conducted. You are receiving this specific page, broken down into individual talking points, because you also filled out the survey.
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Financial Advisors recommendation and outlook to Investors
What are your top recommendations to your clients over the next two to three weeks? What is your outlook on the economy?
1. Stay the course, we have a good plan/investments and this is why we stick with it; outlook: where we are now is not where we'll end up. Expect a rebound
2. Our outlook for the economy is clearly a deterioration until peak "bad headlines" have been reached. Accordingly, we don't think anyone can call a bottom in risk assets, and rather should be focused on slowly rebalancing portfolios.
3. We are here for you! Any questions or concerns we will address them. Regular update meetings continue as scheduled. Rebalancing has already been completed. Be prepared for continued volatility, but we are bullish on the long-term.
4. The economy was strong before the pandemic which was something unexpected and unknowable. Once the good news returns, the economy will bounce back.
5. Stay focused, be safe. The economy is going to take a hit, not sure how deep it will be.
6. Over the next 2-3 weeks, I am advising clients to do nothing drastic or extraordinary in response to COVID-19. Nevertheless, my overall economic outlook is not positive and I have been helping clients build more diverse, low-risk portfolios for the last 36 months.
7. Be sure liquidity needs for the next 12-18 months are satisfied (by having cash set aside). Mostly reminding of this, since we always have this in place. Economic and business fundamentals are bad due to the shutdown, but recent losses have more to do with poor liquidity conditions and arcane factors behind the scenes (forced selling, deleveraging, etc.). Avoid selling into this market any more than necessary.
8. Stay invested, add if you can, reduce withdrawals if possible
9. staying the course for most; taking advantage for strategic repositioning; readying cash
10. Stick to your plan. This too shall pass. I don't make pronouncements on the economy.
11. If in cash stay in cash, we will find great buys in the next 3-6 months. If invested, let's review your positions to see which we want to keep and which we want to sell
12. Fear and panic never lead to good outcomes. This will end, we will recover.
13. If they have cash, get ready to buy. For those who are retired I am telling them to hold back. I believe bonds will continue to struggle, US equities will surge first but we will have a minimum of two negative months of GDP, but most likely three.
14. Rebalance portfolio. Slowly redeploy extra cash into high quality dividend paying equities. Opportunistically tax loss sell.
15. I hope that you and your family are safe first and foremost. We have created a 5 step action plan that we'd like to share with you, and answer any questions or concerns you have. Our outlook is that things will get better in time. Let's not make any emotional decisions, but let's look at your current situation.
16. Hang on, head down, DON’T watch your accounts. We’ve planned for this with your short term positions and in time we will recovery just as your long term assets are positioned for.
17. Stick to your financial plan we prepared for times like these. The economy will recover but it will be longer than most people think.
Have you found any messages and/or communication with your clients right now to keep them calm(er)? What seems to resonate most?
1. Remind them of past performance, our plan/strategy and stick with it
2. The phrases "earn your returns in risky times" and "simply numbers on a page" have allowed us to have conversations with less emotion.
3. Video messaging. Reinforcing our long-term strategy and be available to address any and all concerns.
4. We have been through downturns before and have recovered. Staying the course and focusing on what they can control.
5. That we are here for them, contacting each one to see how they are doing physically, mentally.
6. Most of my clients are HNWIs and keeping them calm has not been an issue. Logical, fact-based decision-making and creative alternative solutions resonate well.
7. Our liquidity (cash flow) needs are covered for the next 12-18 months. Don’t sell into the panic because the prices aren’t reflective of the long-term value of the underlying businesses. Short-term prices are being driven by panic, uncertainty and adverse technical factors.
8. Different messages resonate with different people but one common theme is that to believe the market will not recover is to bet against the odds of history and the ingenuity and creativity of human beings.
9. looping them back to financial planning; giving them actions that empower them to feel control
10. Just the fact that you reach out and talk to them and put this downturn in context with others from the past. Reminding them that they are invested in 100% stocks so their portfolios aren't experiencing what they see on the news.
11. The market is on sale and 2-3 years from now we all will make money on the cash we invest this year
12. We do bi weekly emails and an occasional video from the CEO
13. I tell them they have not lost anything, great companies are on sale right now. No different than Breyers ice cream being 30% cheaper today. Prices will rebound, and keep going up.
14. For some, highlight the cash flow their portfolio generates. Particularly for those nearing retirement or those with 10+ year horizon.
15. I developed a Corona Sur-Thrival message. 10 steps of things to do now to stay focused. They seem to appreciate that as well as the phone calls.
16. Clients just want to hear from their advisor, call everyone, I mean everyone!
When clients or prospects ask, what industries or companies are you finding most interesting right now and why?
1. Technology, consumer Staples, strong balance sheet firms
2. We aren't active enough to pick sectors.
3. We do not forecast industries or companies. We believe in buying all parts of the market
4. Blue Chip companies with rising dividends
5. Safe places for the time being. If one must invest, find quality that’s down and buy for long term.
6. Real estate is always receives the most interest Tourism, hospitality, airlines, travel, etc. are of particular interest because of the value during the crisis.
7. Big banks. Backbone of economy and the mechanism through which the Fed implements stimulus. Trade cheap and oversold due to lower interest rates, but Fed will work to steepen yield curve as other fiscal stimulus could push inflation/rates modestly higher. Strong capital bases.
8. We generally suggest we maintain our strategy of a diversified portfolio of index based ETFs. For clients receptive to satellite opportunities we've proposed everything from casinos to technology to health care.
9. We don't recommend specifics
10. I don't select industries or companies - we used diversified mutual funds
11. Currently, computer collaborative stocks like Zoom and Teledoc
12. We don’t pick companies. We provide allocation strategies that survive all environments.
13. Any company with no debt is a great buy
14. Industrials; Internet/Software/Tech; Some large branded consumer companies.
15. Health care and technology. For very obvious reasons. They are very much in demand.
16. Technology and a travel are this two mot asked about. Tech because of what it allows us to do this day and age and travel because it seems the most deeply valued and ripe for purchasing.
17. Videoconferencing because I believe this will fundamentally change they we operate after this
How about business development? Have you found more prospects open to speaking with you in the past few days and if so, what is the main reason they want to talk to you right now?
We have done a very good job of expectation setting and actual/relative performance is quite good given our conservative structure.
They are afraid. They are not getting return calls from their advisor or they are not working with an advisor (DIY)
No as of yet
Can’t say I have. No one.
We are a referral only practice and have no business development, per se, but we have been fielding a 250% increase in calls (last ~3 weeks) mostly because prospective clients are panicking (even the extremely wealthy) and feel as though their current advisors are not reacting as they desire.
All our attention is on clients including clients we were already onboarding.
We tackled clients first, prospects are next
No - most people are not ready to invest and want to sit tight for awhile.
People are staying home and are worried about their health and cash flows. Soon they will worry about investments
These times are when people seek help and advice. Much like 08 we are getting many calls and referrals as a result of our communication strategies
Yes, finding new conversations but no one wants to meet in person. I have picked up two new clients so far due to lack of engagement with their current advisors
13. yes; another opinion, advice
Right now, spending a lot of time messaging, and using social media. People just want to know that they're going to be ok, and are thankful for the conversation, as well as any suggestions
They are not hearing from there advisor and yes that is happening
Yes. They want advice and someone to help them through this. People that were DIY are looking for help
What resources did you find missing during this moment of crisis in the industry, from the technology you had, from your team, from wholesalers, etc. What resources were missing that could have alleviated this experience for you and your clients?
1. Actually was pleasantly surprised with available materials
2. For some time, we distanced ourselves from the old "Wall Street" perspectives and found nuanced value in more fringe commentary. Now, much of that fringe commentary is tainted with panic and the Old Wall (particularly fixed income oriented firms) has been helpful in perspective setting.
3. Media has been horrible. Nobody talked about the future, only the here and now. We used our own tools and our own data to provide a better experience. It's not over, but we have our clients prepared for victory.
4. One long term client felt that company communication directly to the clients such as Kara Murphy's videos should be more often during this time of uncertainty. Kara does a great job and does have a way of calming fears.
5. Being more on social media and live web meetings
6. We are a small group located around the world and other than not being able to travel, the technology we have in place has proven suitable. Both internal and external/client technology has sustained the crisis (so far at least). Not being able to travel freely has definitely been the biggest obstacle since so much of our business is client-facing, in-person.
7. We found the resources available to be pretty good.
8. It feels pretty together given the circumstances
9. DFA, Zoom
10. The wholesalers and money managers were slow to react to give us media info to calm the clients. I expected them to move quicker, probably compliance slowed them down
11. The endless "BTD" mentality has tarnished this business. I am new to the UHNW market and while it can be argued it is commoditized, at least at the product level, I am more convinced that this mindset has ruined many lives in recent weeks. The industry needs to frame downside risk and preservation of capital far more than they did. Sometimes even UHNW investors don't need to be in the market. But it's too late.
12. I would like to have a little less "compliance". Doing videos as an example is a great way to communicate. However the steps that need to be taken are very cumbersome.
13. Nothing there has been an abundance of information, dissecting it into talking points has been the most difficult. The biggest question is one we can’t answer which is how long so you think it will take to recover from all of this? I answer simply by saying no one knows for sure but the continuously resignations theme we are hearing from all analysts is to hang on if your long term, invest if you have long term cash laying around and don’t look back.
14. Better esignature to process be clients coming on
Anything else you'd like to share with other advisors or industry experts?
1. Stay calm, don't internalize the performance and be disciplined!
2. Nobody has a crystal ball! Volatility is part of being an investor. Everyone needs to stop claiming they have it figured out. This is an event that NOBODY has ever experienced. Volatility, accordingly, is part of the process.
3. Guidance/planning has always been the most important part of what we do. Money management is important but making sure clients have adequate cash reserves, managing risk properly and goal driven investment decision is the formula for success especially during uncertain times.
4. Let your clients know you care about them and are right there with them, ready to help in anyway.
5. With so much uncertainty and fear, clients need their advisors to be more communicative and level-headed, especially if they are taking losses during the crisis. No fancy words. Keep everything simple and easy to understand. Advisors will employ different strategies and tactics to help their clients through this but a lack of communication is the quickest way to lose U/HNW clients during an event like COVID-19.
6. Just a matter of keeping informed. Being the voice of reason. Avoiding the group-think panic. Making sound decisions, regardless of short-term outcomes. Avoid trying to be a hero, but follow sensible prices and focus on long-term opportunities. Work to understand the underlying factors driving prices (mostly technicals).
7. Interestingly, older clients e.g. 55+ seemed much more sanguine - not happy but not alarmist. a little life experience is useful!
8. Talk to your clients
9. Who ever survives in their industries will be stronger. Some of the competition will not survive and their will be more business for all industries, not just financial services, restaurants, manufacturing, wholesales and retail
10. Some clients are very negative right now, they sometimes can even start to wane on our own convictions, but those convictions cannot wane. We have to be the one optimistic piece of news they get every day
11. Active will show their true value in due time.
12. Stay in communication. People need to hear from us, see messages from us, and know we're here.
13. Its simple, just call your clients!!!!
14. Lead yourself well. Don’t over work exercise eat healthy abstain from drinking
CPA’s and Attorney’s Answers to Questions from Concerned Clients
Biggest areas of concern from clients recently:
When will I hear back from the regulators regarding the audit/investigation/settlement offer? Are they really still working
Response: They are probably working remotely just like us
Insurance coverage for "business interruption" due to COVID19
Response: Provide notice; Have impacted parties pursue outside financing including SBA loans, or consider Chapter 11 with its new streamlined version with higher limits; tender all pertinent insurance claims with concurrent fact investigation; keep abreast of legislation action in various states attacking "virus" exclusions as against public policy; and assess insurance broker liability for policy choices including failures to recommend Pandemic Virus coverage available since SARS epidemic to address Corona Virus claims
Custody and visitation concerns due to COVID (whether to comply with court orders and concerns whether other parent is providing safe environment) and loss of income or support due to downturn.
Response: Be proactive and try to work with the other side cooperatively to ease stress and work on issues as they arise. We can also use zoom and other virtual tools to mediate concerns before tensions rise. People should be compassionate and reach agreements to benefit themselves and their families. I am also pushing people who have the resources to reach out to mental health professionals right now to manage their stress and anxiety.
Barrage of calls from current clients and new clients wanting to get their estate planning documents in place; trying to figure out how the documents can be properly executed under VA law given the current social distancing guidelines.
Response: DO NOT use Legal Zoom or otherwise try to create estate planning documents yourself. Take the time NOW to consult with an experienced estates and trusts attorney to get your estate planning documents in place. Also, make sure your parents have done the same.
Remote working environments/data security
Response: Working from home presents unique challenges, not the least of which is network security. Clients should ensure that remote computing protocols and virtual private networks are secure and safeguarded to prevent against potential unwanted access by a third party.
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