Michael Finke, Ph.D./CFP, is a professor of wealth management and the Frank M. Engle Distinguished Chair in Economic Security at The American College of Financial Services, as well as a regular contributor to this publication.
The easy answer is to help counsel clients manage their emotions and maintain focus on long-term goals. In this crisis, I’m not sure if that’s enough.
Advisors need to pay attention to how a prolonged financial crisis can affect a client’s portfolio.
What is happening in the market for corporate and municipal bonds? How vulnerable are financial institutions to insolvency? What is the risk to a client’s pension? How will a prolonged period of low portfolio returns affect my client’s savings goals or their retirement income plan?
Stay informed and be aware of how the market is changing in response to an unprecedented slowdown of economic activity that isn’t having a uniform impact on all industries.