The 2020 IA25: Michael Finke
The American College of Financial Services professor gives his advice on portfolio issues and client education during the coronavirus.
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.
Top Advice
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.
Biggest Challenge
I am fortunate in that I work for an institution that specializes in remote education. Many academics are being forced to adapt quickly to a new learning environment.
Like many advisors, academics thrive on the ability to communicate with students face to face and feed off the energy of an audience. I can only imagine the challenge advisors are facing demonstrating empathy and calming fears without the ability to meet with clients in person.
I’m now convinced that remote learning can be just as effective and more efficient than in-person education.
Many advisors who dismissed the value of communicating with clients online will likely also see the benefits of using technology to create more frequent and efficient opportunities to reconnect with clients.