One Monday morning in 2009, I was sitting at a boardroom table with a couple of other Investment Executive (IE) editors discussing ways to cover the financial crisis that had sent markets plummeting and locked the global economy into what came to be known as the Great Recession.
The managing editor at the time was aghast at the pessimism and fear being expressed by media outlets and pundits.
“Well,” I said, in defense of my own pessimism and fear, “it’s because we’ve never been through anything like this before.”
How wrong I was, and how wrong I was made to feel. I gleaned from the ensuing tongue-lashing that all recessions, to the uninitiated, seem like something we’ve never been through before. And, I was told, recessions are followed by recoveries. Eventually, those words proved true.
Eight years earlier, I was working on special coverage of the 9/11 attacks for the October 2001 edition of IE. On the front page there was an undramatic — but memorably heartbreaking — photograph of people lining up in front of St. Andrew’s Anglican Church in downtown Toronto to pay tribute to Canadians lost in the World Trade Center attacks. We had never been through anything like that before, either. But despite the tragic loss of life and the fear and uncertainty that gripped the world, we recovered.
Today, as we grapple with the coronavirus crisis, two contradictory, but arguably true, assertions come to mind: We have never been through anything like this before; and we have been through similar crises and recovered.
A crisis such as this is the true test of your value as a financial advisor. Clients will be coming to you for reassurance, and when they do, your role is not necessarily to provide answers to questions like “How low will markets go?” and “When will the recovery begin?” but to allay their fears.
Without minimizing the seriousness of the pandemic and its effects on financial markets, remaining calm yourself will help relieve clients’ anxiety. If clients are fearful to a point that seems unreasonable to you, don’t dismiss their emption as misguided. Express empathy and understanding. This is where those articles you read on active listening come in.
If clients want to withdraw funds, explain the hazards of panic selling, especially when markets are down. Remind clients of the conversations you had about risk early in your relationship, and the benefits of remaining invested over the long term.
Don’t wait for clients to contact you. Send out an email assuring them that you are monitoring the markets and their portfolios. Urge them to remain calm and follow the advice of recognized health authorities.
If you have a staff, allow team members to work from home to avoid exposure to the virus. If you have a business continuity plan, this is exactly what it was created for. If you do not have such a plan, do what you can to arrange for staff to share files through a secure network or through email.
Talk to your team members about how they feel. Like your clients, they will be turning to you for leadership and reassurance. Be flexible in letting staff adjust work hours, work from home and handle responsibilities such as child care while schools are closed.
Your clients and your staff rely on you to stay on top of developments about the financial markets and the pandemic. There’s lots of information — and misinformation — circulating. Rely on legitimate media outlets and health authorities for news updates and advice.
If you have been in the business for less than 10 years, talk to an older advisor who has been through 2008-09, 9/11 and perhaps even Black Monday 1987. How did they manage those events and how are they handling this crisis?
And don’t become overwhelmed. Give yourself an occasional break from the markets and the news. Watch a favourite movie with your family. Go for a walk in the park. Read a book. Plan your next vacation (but don’t make reservations). Contact any seniors you know to see if they need assistance. If you know someone who is self-isolating, offer to shop for them. And if you see any toilet paper, let me know.