You're Guiding Your Clients Through the Virus Crisis, but What About Your Business?

As the COVID-19 crisis continues, it is crucial for those running advisory firms to communicate transparently with their teams, weigh economic decisions for the short, medium and long term, and also think about succession plans, according to David DeVoe, founder and managing director of financial services consulting firm DeVoe & Co.

The crisis “continues to be a roller coaster,” he said Tuesday during the webinar “Navigating Your Business Through the Storm,” pointing to two straight days of good news with the stock market “going up and regaining some of the ground,” inspiring one to be “optimistic” — but then you read that “the New York death count is now at an all-time high.”

The coronavirus is “affecting the health and well-being of individuals and families and everyone across the country and across the world,” as well as “clearly affecting the market, and I expect the virus is affecting the very underpinnings of the economy, too,” he said, predicting it “will reverberate for months, quarters and perhaps even years to come.”

We are in “uncharted water,” and “this is a new beast that we are dealing with,” he said, noting its “magnitude is levels above” the 2008 global financial crisis.

RIAs Are ‘Ninjas’

Right now, advisors can underscore to their clients just how invaluable they are. DeVoe explained: “You’re working with clients. You are holding their hands. You are rebalancing their portfolios quite actively. You’re probably starting to recalibrate their financial plans. You’re doing what advisors, what independent advisors, what RIAs do best in this environment. This is where RIAs differentiate themselves from robo-advisors or wirehouses, even IBD models. This is truly where you shine.”

DeVoe conceded “you guys are ninjas at this [and] there’s not a lot of advice or guidance I can give” on what advisors should be doing right now when it comes to dealing with their clients.

But he urged advisors to “apply the same concept to your staff,” because that staff is “really the success driver for any RIA.” You “should hold their hands” also because “this is a shock to their system” and they face a lot of uncertainty, just like a firm’s clients, he noted.

So, for starters, those running advisory firms should offer their staffs support, and it is a good idea to let them know what is going to be happening with the firm — “the good, the bad and the ugly,” he said.

Then, it is important to let your staff know “what could potentially happen in the future” — both in terms of the firm’s performance, even if the business is doing fine right now, and your succession plan, he pointed out.