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A Top UBS Advisor Calls Pandemic 'Best Thing That Ever Happened' to Advice Business

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As devastating as the coronavirus is, from the vantage point of this financial advisor, “the pandemic is the best thing that has ever happened to the financial services industry.”

So argues Jonathan Israel, a senior vice president in wealth management at UBS Financial Services.

“It’s changed and improved the way we do business. It’s likely caused permanent changes to our profession, largely around technology,” insists Israel, 37, who was recruited by UBS in 2011 after five years with Edward Jones, where he started out as a rookie.

He now manages $236 million as an advisor with Affinity Wealth Partners, which has $1.1 billion in assets under management.

Named one of UBS’s Top 35 Advisors under 35 in 2019, Israel has added more clients and new assets since the pandemic hit than at any time in his 15-year career.

Based in Los Angeles, he specializes in retirement planning for small- and midsize-business owners and their families.

The biggest change the pandemic brought for financial advisors was triggered by coronavirus quarantining and stay-at-home orders.

But it was a change that, generally, both advisor and client would find advantageous.

Meeting virtually from our homes “has the potential to really deepen the relationship,” he says.

In fact, “a good portion of my meetings going forward — probably forever — will be done virtually,” the FA enthuses. “Many of my clients now prefer to meet [remotely] versus in person.” 

When it comes to client portfolios, the pandemic has driven Israel to focus more on cash needs for the next three or four years. That means putting those funds aside into safe investments, such as money markets.

ThinkAdvisor recently interviewed Israel, who holds the Certified Private Wealth Advisor designation, who was speaking by phone from his home in the Los Angeles suburbs. 

Though he contends that the pandemic has permanently changed some ways that FAs carry out their jobs, he stresses that, “on a fundamental level, nothing has changed.” 

As always, “advisors need to focus on personal connections, financial planning and offering clients support to stay focused on the long term,” he says.

Here are excerpts from our interview:

THINKADVISOR: What impact did the coronavirus pandemic have on the industry?

JONATHAN ISRAEL: I don’t for a moment minimize the tragedy of the pandemic’s hundreds of thousands of untimely deaths. But I believe that the pandemic is the best thing that has ever happened to the financial services industry.

In what way?

It’s changed and improved the way we do business because we were forced to find new and better ways of serving clients. In particular, we had to quickly adopt remote communication.

COVID has likely caused permanent changes to our profession, largely around technology. For instance, clients adopted DocuSign electronic signature [replacing signing and mailing papers] at a rapid pace. 

We’re not going to go back to physical paper for things like that.

What else?

The experience has given us the opportunity to connect with clients in a new way. Very quickly everything became virtual; advisors began working with clients using Zoom meetings. 

Clients enjoy getting a peek into my home and seeing my little kids, and the reverse is true, too. You get to meet the rest of the client’s family. 

You learn a lot about someone when you visit their home, even if it’s just virtually. These things can be endearing and humanizing.

How does that help you as an advisor?

It has the potential to really deepen the relationship. Even though we’re starting to meet with clients in person, many now prefer to meet virtually. 

They admitted they never really enjoyed the traffic getting to [my office in L.A.’s] Century City. It’s so much easier to just pull up the computer, do a Zoom and see each other that way.

I imagine that a good portion of my meetings going forward, probably forever, will be done virtually.

Did you acquire more clients during the pandemic?

I added more clients and new assets since the pandemic hit than at any time in my career.

They were from referrals from centers of influence and from prospecting efforts. We’ve brought on clients that we’ve met only virtually. Some of those referred to us are located all the way across the country. 

Before, there was a preference to have an advisor who was local, so you could meet face to face. Now people are accepting meeting virtually and engaging in business that way.

Why have you been so successful at adding new clients? 

Because we focus really heavily on financial planning. It’s the key to everything that we do, and the pandemic really brought that into focus. 

It’s not just a plan for, say, funding retirement. It’s also a plan for how to react in a bear market. We plan for bear markets. 

Our clients accept that bear markets are going to happen. They’re scary, but they’re always temporary.

By focusing people on the long term, we’re able to get them through a crisis unharmed. The shorter the term you [orient] the conversation, the more likely you are to panic when the inevitable bear market happens.

How do you get clients to concentrate on the long term?

Every human has a tendency to focus on the short run, last year especially. I had some clients calling me saying the world was ending: “It’s different this time.”

Convincing clients that it’s not different this time, that things will be OK, requires a little bit of faith. You have to impart that faith to your clients and widen their perspective: Stop thinking short run; start thinking long run.

What if they’re panicking because they heard something negative on the news? 

Begin conversations with the end in mind — how we’re going to reach that goal 20 years from now, not what the market is doing today. Are you really going to make a potentially life-altering investment decision based on a piece of information that popped up today in the headlines?

You specialize in retirement planning. Which niche?

I do corporate retirement planning as well as personal retirement planning, so we work with a lot of business owners. 

I join those two together for someone who owns a business and has [any type of] retirement plan. 

We figure out how we can maximize what they’re doing on the business side to help them reach their personal goals.

How did you acquire expertise in advising business owners?

I started working on 401(k) plans when I was at Edward Jones, one of the few advisors at the firm [at that time] who did. I was looking for opportunities to expand my business to meet more people.

I found that a lot of advisors had 40l(k)s but not a lot really understand them. That extends to any business retirement plan. 

They don’t understand what goes into really good plan design. I know a lot about the inner workings of retirement plans and can figure out ways to make them more efficient or get the most out of what they already have.

What motivated you to become a financial advisor in the first place?

From a young age, I was enamored with the stock market and the wealth that can be created in it. I wanted to learn how to do that for myself and for other people.

I didn’t grow up with a whole lot of money, which is, maybe, why I was so enamored with the market — I knew it had this tremendous wealth-building potential.

What was the biggest surprise about the job once you became an FA?

I had imagined it would be very active from a trading perspective: Hey, we’re analyzing this company. We’ve got to buy this stock. We’re going to sell that stock.

But the conversations we have with clients aren’t about trading. They’re not about Company A. versus Company B. and what we like and don’t like.

I thought it was going to be like, this market moved; that market moved. What did the Fed say today? But it’s not that at all.

The conversations are all goal-specific, [such as], “We want to fund a family vacation in our eighth year of retirement. How are we going to make that happen?” And then we back into an asset allocation [to fund that goal].

That’s where I spend most of my time, talking to clients about their personal goals and if they’re on track.

You started at Edward Jones in 2006, and two years later, the financial crisis struck. Then, in 2020 the pandemic hit; and there was that big market meltdown that March. When those dramatic events occurred, how did you deal with clients as a rookie compared with now as a highly experienced FA?

The financial crisis was brutal. I was in constant contact with clients. There was a lot of handholding, a lot of reassuring. That’s not very different from what I do now, but hopefully I’m better at it.

[Last year and this] clients had every reason to panic. So sometimes a little reassurance is needed — a bit of handholding — from their advisor.

It’s being there and being available, reminding people that these things happen. The market is a cyclical beast. Pullbacks are part of investing.

Is there anything you recommend that clients do now that you weren’t as focused on before the pandemic?

We’re very, very cognizant today about clients’ cash needs — liquidity needs — in the next three or four years. 

Why?

If they’re expecting a cash need during that period, that’s money that shouldn’t be invested in equities, with the potential to go down 30%.

We know that will happen on average every five years.

We’re very on top of the planning to know what the cash needs are going to be, and that money is managed differently.

How?

It’s in safer things, like short-duration, high-quality fixed income or money markets, or a certain amount in the client’s savings account to be available when needed. 

This helps people know psychologically that they have their next three or four years of spending already set aside. That allows them to stay in some of the [riskier] investments.

Pictured: Jonathan Israel