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Financial Planning > Behavioral Finance

The 2020 IA25: Ric Edelman

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Ric Edelman is founder of Edelman Financial Engines and the host of the radio-broadcast “Ric Edelman Show.” (He and his wife just paid for a private jet to deliver 7,440 N95 surgical masks to New York hospitals.)

Top Advice

Focus on each client’s financial goals; remember that investment strategy is subordinate to that.

It’s easy to say that “this too shall pass” (it will) and that this is a great buying opportunity for long-term investors (it is). But does that really matter for every client?

If a client who’s distressed and sleepless due COVID-19 has enough income and assets to meet their financial needs for their lifetime, why should they subject themselves to the volatility that a 65/35 portfolio is experiencing during this crisis?

It’s paramount that advisors not anchor themselves on prior financial, investment and economic strategies and instead revisit the financial plan they crafted for each client.

Remember: your job is to make sure your client is taking no more risk than is necessary to achieve their goals.

Be willing to accept the fact that you might need to reevaluate each client’s plan, and where necessary, alter the advice you previously provided.

Sticking with old advice merely out of habit, and solely to avoid looking foolish, is not what your clients need from you right now.

Instead, verify that each client’s portfolio and strategy are consistent with their financial goals, given the circumstances we all find ourselves in due to COVID-19.

If you do feel that a revision in your recommendations is necessary, you’ll discover that your client will welcome, not resist, that phone call.

Biggest Challenges

Dealing with the sadness of seeing so many people struggling so desperately and knowing that, despite everything we’re doing to educate and advise as many as we can via all our broadcasting and social media channels, there are so many people beyond our reach.

Tens of millions of Americans are drowning, and I’m powerless to save them.

This frustration becomes fuel, spurring me to produce even more content and advice, and to get it out through our channels as best we can.

I find great solace in the fact that everyone here at Edelman Financial Engines feels the same way and is equally dedicated to doing everything we can to help as many people as we can.

Their commitment helps my frustration morph into gratitude and solace.


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