The cascade of bad news in March surrounding the domestic spread of the coronavirus is taking a big toll of advisory clients, the American College of Financial Services reported last week.
The college conducted a follow-up survey of retirement advisors in late March to find out how clients’ sentiments had changed since the first poll was conducted earlier in the month.
In a word, folks are scared.
Three in five advisors in the follow-up survey reported that clients were more concerned about their retirement prospects than they were a month ago.
Ninety-three percent said their clients had contacted them with concerns about their retirement plans because of the escalating effects of the pandemic and resulting market volatility, compared with 66% in early March who said clients had been in touch.
“Our findings show a real and marked increase in anxiety, which is certainly understandable given how quickly things have shifted in a month,” Wade Pfau, co-director of the college’s Center for Retirement Income, said in a statement.
“The good news, though, is that we’re also seeing advisors and clients alike increasing their communication with each other to respond to these concerns, which is the key ingredient to successful financial planning.”
The follow-up survey was conducted from April 1 to April 6 among 123 advisors.
Sixty-eight percent of advisors in the new survey reported that some clients had made changes to their retirement plans owing to the pandemic’s effects and resulting market volatility, compared with only 36% one month ago.
When asked which group best represented the majority of clients who had been in touch with concerns, advisors noted an uptick among near retirees.
The survey also highlighted a strong correlation between the passage of the Coronavirus Aid, Relief and Economic Security (CARES) Act and proactive communication between advisors and their clients.
Eighty-three percent of advisors said they were contacting their clients about the CARES Act, while 60% said clients had reached out to them for explanation or support regarding the legislation.
“This survey just reiterates the ever-increasing concern of retirees and the importance of having a retirement income plan in place before the crisis begins,” Colin Slabach, co-director of the Center for Retirement Income, said in the statement.
“It’s something that consumers in all stages of retirement planning need to be aware of so that they can make adjustments to their investment strategies and even lifestyles in an attempt to recover from these losses.”
— Check out Wade Pfau: Virus Crisis Has Slashed 4% Rule Nearly in Half on ThinkAdvisor.