“The reason most people do not recognise an opportunity when they meet it is that it usually goes around wearing overalls and looking like hard work” HENRY DODD
Covid19.
It won’t miss anyone.
It is causing uncertainty for many.
Anxiety or frustration for others.
Powerlessness for possibly more than wish to admit it and helplessness for those who believe they have lost their options.
There’s work ahead for advisory firms.
A massive amount.
It will require advice like never before.
Covid19 is also possibly what the advice industry has needed. It might do more than all the financial services inquiries over the last decade to position the value of trusted advice.
For many advisory teams, it is the opportunity to return to the first principles why they do what they do – help their clients live their best financial lives, particularly when they, or those important to them, need clarity regarding best forward steps.
As with most opportunities, there is a difficulty.
As infection curves flatten, our client’s real advice priorities are not as obvious.
Going beyond the obvious is the unexpected path to enduring value for our clients in these times.
The obvious
The obvious initial response to Covid19 is a technical one.
I have lost my job, what do I do?
Do I have enough in savings?
What do I now do with my superannuation?
How can I access support funds?
How am I going to keep going if cash flow keeps falling?
Is it now time to buy?
These questions highlight the usual and obvious role financial planners, advisers, and accountants provide.
Solving technical questions.
But these are not usual times.
The less obvious
The less obvious are deeper issues underneath the surface of the client’s questions.
The uncertainties in our lives can resemble an iceberg, possibly a hierarchy.
At the top are the obvious technical issues.
However, these can be dwarfed by the uncertainties arising from changes in client’s situations, circumstances, and behaviours which lie beneath, deeper within their hierarchy of uncertainties.
Regardless of what is now visible above the waterline in the financial lives of clients, comprehensively serving a client’s best interests in these unique times, requires a deeper dive beyond the technical issues, to ensure best interests are being served.
The consequences of an event like Covid19 cannot be predicted.
Neither can the client’s best next steps without a re-examination of their short-term situations or longer-term circumstances.
The short term
For instance, what are the ramifications of adult children, possibly with their kids, moving back to the family home or needing financial assistance?
What are the consequences of putting retirement plans on hold, or next career steps, or business sales, or the hopes of reducing working hours? Is being stuck in the wrong job at this time, just the price that needs to be paid for the wage security?
What about those whose advice was based upon continued upward momentum in house or business valuations, only now realising possible declining values unconceivable even a few months ago?
What now are realistic workload expectations for those hoping to operate with less staff, working in less connected remote environment, handling additional workloads, and no foreseeable opportunity for respite?
How will partnerships and marriages already under strain cope with additional loads and more heated exchanges? What about when members of family, whether close or estranged, seek support creating new expectations or worse, new tensions.
The adviser’s objective is not to uncover specific new situations. Instead, it is to ensure all the client’s assumptions are tested, to minimise their future surprises and ensure their next steps are in broad best interests.
Unfortunately for some, Covid19 will be anything but short-term.
The long term
Post Covid19 there may be just no more jobs at former pay rates. Even with significant re-training, it may be a shock to realise that peak earning capacity has been passed.
Circumstances may change too for those with livelihoods are connected to the economic health of international clients, employers, suppliers or institutions who may be facing far worse economic conditions than those experienced here in Australia.
Covid19 might be the last thing a pre-existing crisis in a marriage, a partnership, a family, a business, a community, or an institution needed. Chances aren’t good that the pandemic’s distractions, restrictions and uncertainty add to, rather than alleviate, real issues that may now require more money or advice or planning to address.
Few of us will be immune.
If the GFC taught advisers to keep in touch and re-assure, Covid19 will teach advisers to reconnect and not assume.
The task ahead is big.
The answer is not a better financial product. While important, these have been over-valued and over-sold for too long.
What is needed are trusted advisory relationships built with an understanding of relevant uncertainties. Our clients not only need to know the steps forward through their uncertainties, towards their sought-after aspirations, they also require the confidence to take those steps.
These times are potentially the making of the new future for financial advice where more Australians understand and prize the value of their financial paths, not their financial products.
It may look like hard work, but it is nothing more than an opportunity to ensure clients are on their best paths, making their best possible steps, with the hierarchy of their uncertainties best managed via a conflict-free advisory relationship.
Bring it on.
What do you reckon?
Photo Credit: Shutterstock_1410888542
ABOUT JIM STACKPOOL
For over 30 years Jim has influenced, coached, and consulted to accounting & financial advisory firms across Australia. His firm, Certainty Advice Group specialises in developing professional advice firms who charge flat fees for comprehensive, unconflicted advice. He has created Australia’s highest and only ACCC/IP Australia Certification Mark standard of comprehensive advice – Certainty Advice. He is also an author, blogger, and keynote speaker