When the stock market plummeted as a result of COVID-19 and the economic uncertainty it created, financial advisors saw an uptick in the number of investment-focused clients looking for advice. After all, the Dow suffering the most severe drop since 1987 was reason enough to drive investors into a state of panic.
However, it wasn’t until a few weeks after this initial shock that investors began to shift their focus to a financial planning perspective.
Throughout the pandemic, the increase in demand for financial planning has been significant. What is the value of a comprehensive, planning-led approach, and how are financial advisors accomplishing this?
Planning-Led advisors Think Ahead
While financial advice typically focuses on specific goals (like asset allocation or college funding), financial planning takes a broader look at an individual’s entire financial picture, always accounting for potential disruption. Planning-led advisors can determine how investing fits into the roadmap of one’s financial journey and guide them toward their ultimate goals, which is what more and more Americans are looking for when they seek professional help with their finances.
Amidst the current pandemic, as Americans struggle with mass furloughs and layoffs, the volatile stock market and the overwhelming sentiment of uncertainty, it is no surprise that planning around finances can be a stressful experience. In fact, a recent eMoney survey found that the majority of people in the U.S. purposely avoid talking about their personal finances.
As a result, many prospective clients who initially set out for targeted financial advice have begun to realize the value of having a comprehensive financial plan, one that can endure unexpected obstacles, like a pandemic.
There is also research that confirms the value of financial planning. According to the Fidelity 2016 eAdvisor Study, clients with a financial plan are seven times happier than those without, which suggests the added benefit planning can provide, especially during times of uncertainty.
When obstacles, like a global pandemic, become a part of a client’s financial journey, collaborating with planning-led advisors allows them to navigate challenges more comfortably and effectively, continuing to move them toward their ultimate goals.