Financial Caregivers Need Self-Care, Too

by Rick Kahler, 4/13/20

Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.

These are hard times to be in the caregiving business. Front and center in this crisis are the medical caregivers charged with our physical wellbeing. Those devoted and courageous professionals risk their lives caring for their patients stricken by the COVID-19 virus.

Some have lost their lives.

Those whose work focuses on two other components of wellbeing – emotional and financial – are not risking their lives caring for their clients. Yet their worlds look very different today than they did a few weeks ago.

During times of financial crisis, the workload of a financial planner or investment advisor increases significantly. Buying and selling stocks and mutual funds, rebalancing and loss harvesting that are so mundane in normal markets take on an intensity that demands hour-by-hour monitoring when markets turn volatile. One slip-up could be financially harmful.

In addition to the increased technical workload, there is a surge in contacts from concerned and panicked clients. Financial planners spend much more of their workday communicating with clients by phone, virtually, in person (if practical) and via written communications.

Understandably, with most financial planning firms it’s "all hands on deck" during turbulent market times like we’ve witnessed over the past month. Financial planning often takes a back seat to handling the crush of demands created by the investment crisis. Throw a once-in-a-century pandemic into the mix, and the burden of caring for clients and their financial wellbeing can quickly get overwhelming for the most experienced and prepared practitioners.

Recently, through a national webinar for the Financial Planning Association on the current financial, health, and economic crisis, I surveyed 80 or so planners regarding a number of things. At the time of my survey, the current bear market was a newborn at just 11 days; on average most bear markets last 17 months.

What I learned was that 83% of the planners were experiencing very little emotional trauma from the current crisis. Perhaps that is because only one-third of planners had received calls from more than 25% of their clients, with just 12% having heard from more than 50%. I suspect we will see planners' emotional wellbeing decline in direct proportion to the length of the crisis and the increasing number of clients who call concerned or wanting out of the market.

One of the biggest concerns for most financial planning and investment companies is that their income is tied to the value of the assets they manage for clients. During the 2008 great recession, it wasn’t unusual to see financial planning positions eliminated or salaries reduced by a third as income dropped proportionately with falling markets.

Only 53% of the respondents were sure their companies had sufficient reserves to weather a 20%-30% drop in revenues. Approximately 39% said their companies were or might be contemplating cutting salaries.

The pandemic has added an additional layer of challenge not present in 2008. Over70% of those surveyed had closed physical offices and were working from home due to the demands of social distancing. Of those, 65% found working from home to be almost as efficient as being in the office; 35% did not. About half of the planners surveyed had or intended to hold webinars or virtual town-hall meetings with clients to keep them informed.

Fortunately, 61% of the planners said they have an emotional support group where they could safely talk about their emotional struggles. Still, 39% said they had no one to go to for emotional support, which is concerning.

Those who care for clients' wellbeing, whether physical, emotional or financial, can only do so effectively in the long term by also caring for themselves.

Rick Kahler, MS, CFP®, CFT-I™, ChFC, CCIM , is founder of Kahler Financial Group, a Rapid City, SD-based fee-only Registered Investment Advisor.

Financial Caregivers Need Self-Care, Too

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