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?
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.
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However, talking about their financial situations and their plans can help.
According to the eMoney COVID-19 Pulse Survey, 64% of advisors say they have seen an increased need to connect with clients about their financial plans. 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. As a result, 93% of advisors feel the current environment has had a positive impact on client relationships.
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. In fact, in the eMoney COVID-19 Pulse Survey, 85% of advisors felt clients with a financial plan felt more prepared, while 81% felt clients with a plan felt less discomfort and anxiety.