This is an extraordinary time. As advisors, you are a port in the storm for worried clients, confronting a double whammy of an economic meltdown and a credible threat to their health. Many of your clients are retired, placing them at greater risk of complications from Covid-19.
You’re unlikely to confront a more challenging confluence of events in your lifetime.
Here’s the good news: You’ve trained for this moment your entire professional life.
Don’t believe the pundits
The pundits may say you’re highly stressed and need extensive assistance. I don’t agree.
When Tiger Woods steps up to the tee, he doesn’t ask his coach what to do next. He spent thousands of hours practicing for this moment.
So have you.
The rehearsal predicts the play
As an evidence-based advisor, you structured the portfolios of your clients to anticipate market meltdowns.
Your clients likely have a sufficient allocation to short-term bonds so they won’t have to sell stocks in a down market. You previously told them not to take any more risk than necessary. They are reaping the benefit of your sage counsel.
This preparation makes it easier to explain why “sticking to our plan” makes sense.
One advisor told his clients: We planned for this, in an unemotional way, a long time ago. We are prepared and ready. So are you.
That’s a comforting message.
The power of hope
There’s a lot we don’t know about Covid-19, like how many Americans will be infected, how many will suffer complications and possibly die, whether the health care system can withstand the burden, whether we will have the equipment to treat the sick, and when a vaccine or an effective treatment will be available.
Just like the market dislikes uncertainty, so do your clients. It increases their anxiety and stress.
Unfortunately, the media plays up the negatives, because that is what keeps eyeballs on their networks.
Here’s a valuable role you can play: Provide a balanced view of the crisis. Here are some examples:
- The infection rate in Wuhan, the epicenter of the virus, was 0.7% .
- About 80% of people who get infected will have mild symptoms requiring no medical treatment. Only 5% are likely to require hospitalization – mainly the elderly.
- Social distancing works. Only 116 new confirmed cases were reported in China on March 20, 2020. Reports from South Korea, Japan, and Singapore are also encouraging.
There’s reason to believe, if we follow the recommendations of the CDC and engage in similar social distancing practices, the present of these countries will be our future.
Consider applying your research skills to getting the latest updates on Covid-19 from credible sources like the CDC and the World Health Organization in order to convey all relevant information to your clients.
They’re unlikely to get it elsewhere.
Resource of the Week:
I recommend this article which cautions against overreacting to the current crisis.