Covid-19 Handbook

Covid-19 and the Wealth Management Industry: What You Should Do Today and What You Should Expect Tomorrow

By :
Samir Vasavada
Here is our thoughts on what you should do during the pandemic and what you can expect when moving past it.

In the past few months, chances are your phone has been ringing off the hook and your email inbox is overflowing. In a time of unceasing and unpleasant change, it’s tempting to concentrate on the immediate future. For many people in the age of COVID-19, “long-term” has come to mean “next week,” given how quickly bad news has arrived and how rapidly long-held certainties have disappeared. COVID-19 has had an adverse impact on the wealth management industry — portfolios plummeted in the first weeks before a quick rebound — but we shouldn’t neglect the opportunities for renewal left in the wake of the calamity. Registered Investment Advisors have an opportunity to lay the foundations for substantial growth. After all, they’re paid to think in the long term, beyond next week or next month.

New tools for a new era

For some advisors, increased demand may necessitate changes to the way they operate their business. If an RIA has traditionally added one or two clients a month, they’ve probably been able to make do with manual onboarding processes. But with new clients appearing in record numbers, some advisors may find themselves in need of help. What’s feasible in normal times may become impossible in an era that sees many RIAs receiving seven or eight new accounts every month. A platform solution is easy to implement and will continue to save users time and effort even when the world and the markets return to normalcy. 

Many financial advisors report increased interest in their services; how can you assure that clients come to you instead of going to your competitors? Potential clients are likely to shop around, and so differentiating yourself from your peers is vital for winning new business. In this new market, RIAs who are able to customize portfolios to client-specific needs and risk profiles will be more convincing. For example, if a client employed in the tech sector might have substantial equity in her firm; a responsive RIA could reduce tech weightings in her portfolio so that she’s not overexposed to a single sector. If you can’t account for individual needs, would-be clients will go elsewhere: To more flexible peers or even to passive index funds.


Under-budget on overhead?

The global pandemic arrived in a period of increased technology spending. In mid-2019, 58% of financial advisors reported they hoped to invest in new technology, citing its capacity to scale client-base growth, reduce rote tasks, and let employees work on more lucrative projects. In early 2020, before lockdowns, pauses, and quarantines began in the United States, financial advisors were considering new tools to meet Reg BI requirements scheduled to go into effect at the end of June. The international crisis should spur further investment in technology. As innumerable commentators have stated, the world has entered a new era. Financial advisors shouldn’t expect to thrive in this new time if they enter it with inefficient legacy tools. New tech can reduce overhead, accelerate client acquisition, and free up advisor time for key tasks.


Catch up on communication

Financial advisors, like their clients, are now working from home and in isolation. The face-to-face meetings that are essential to maintaining trust and ensuring client confidence have been replaced with Zoom chats and Google Hangouts. And the conversations advisors are having may differ from pre-pandemic discussions. As an analyst interviewed by CNBC noted, many calls are more about emotional support than about specific investments or strategies. Clients may not wish to hear how much their portfolio has declined; although the markets have begun to rebound, worried clients may want general reassurance more than specific facts and figures. 

However old and established or young and developing your client base may be, communication skills are essential for maintaining and strengthening relationships at this time. Even should your AUM shrink during the crisis, you should plan to emerge with a stronger connection to the many people who trust you with their money. Effective communication is frequent communication: While you should be responsive to anyone who reaches out to you, you should also be proactive, and reach out to clients you have not yet spoken with. Longtime clients may be comparatively easier to reassure; though nothing has quite compared to COVID-19, chances are that these clients have already weathered several recessions and downturns. Younger clients may be more distressed; it’s your responsibility to remind them that a long-term perspective is essential for their peace of mind and for the growth of their assets. 

No one will look back fondly on the year of the coronavirus: It’s been demanding for everyone and ruinous for many. Even so, financial advisors have the chance to leave lockdown stronger and more capable than they began it. The relationships they build with clients, the processes they improve, and the tools they start employing will help them confront today’s challenges, of course. But just as important, today’s actions will help them build tomorrow’s wealth. The effects of the decisions you make now will be felt for years and decades to come. Today is just one day, 2020 is just one year, and you and your clients are together for the long haul.


Sign up to keep up with new updates and content!

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
ViseFeatures
74 Warren St, Suite 5W
New York, NY 10007
Legal / Privacy Policy
Copyright © 2020 Vise, Inc.. All Rights Reserved

Vise AI Advisors, LLC is an investment adviser in New York, New York. Vise AI Advisors, LLC is registered with the Securities and Exchange Commission (SEC). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Vise AI Advisors, LLC only transacts business in states in which it is properly registered or is excluded or exempted from registration. A copy of Vise AI Advisors, LLC’s current written disclosure brochure filed with the SEC which discusses among other things, Vise AI Advisors, LLC’s business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov.

Please note, the information provided on this website is for informational purposes only and investors should determine for themselves whether a particular service or product is suitable for their investment needs. Please refer to the disclosure and offering documents for further information concerning specific products or services.

Nothing provided on this site constitutes tax advice. Individuals should seek the advice of their own tax advisor for specific information regarding tax consequences of investments. Investments in securities entail risk and are not suitable for all investors. This site is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction.

This site may contain forward-looking statements relating to the objectives, opportunities, and the future performance of the U.S. market generally. Forward-looking statements may be identified by the use of such words as; “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “potential” and other similar terms. Examples of forward-looking statements include, but are not limited to, estimates with respect to financial condition, results of operations, and success or lack of success of any particular investment strategy. All are subject to various factors, including, but not limited to general and local economic conditions, changing levels of competition within certain industries and markets, changes in interest rates, changes in legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors affecting a portfolio’s operations that could cause actual results to differ materially from projected results. Such statements are forward-looking in nature and involve a number of known and unknown risks, uncertainties and other factors, and accordingly, actual results may differ materially from those reflected or contemplated in such forward-looking statements. Prospective investors are cautioned not to place undue reliance on any forward-looking statements or examples. None of Vise AI Advisors, LLC’s or any of its affiliates or principals nor any other individual or entity assumes any obligation to update any forward-looking statements as a result of new information, subsequent events or any other circumstances. All statements made herein speak only as of the date that they were made.

Certain hyperlinks or referenced websites on the Site, if any, are for your convenience and forward you to third parties’ websites, which generally are recognized by their top level domain name. Any descriptions of, references to, or links to other products, publications or services does not constitute an endorsement, authorization, sponsorship by or affiliation with Vise AI Advisors, LLC with respect to any linked site or its sponsor, unless expressly stated by Vise AI Advisors, LLC. Any such information, products or sites have not necessarily been reviewed by Vise AI Advisors, LLC and are provided or maintained by third parties over whom Vise AI Advisors, LLC exercises no control. Vise AI Advisors, LLC expressly disclaim any responsibility for the content, the accuracy of the information, and/or quality of products or services provided by or advertised on these third-party sites.

Any reproduction or distribution of this website, as a whole or in part, or the disclosure of the contents hereof, without the prior written consent of Vise AI Advisors, LLC is prohibited.

Monte Carlo simulations have material limitations. Market movements may be more or less extreme and more or less frequent than those that occur in the model. Certain asset classes and investments have shorter histories than others and may not be as reliable. Market Events and other factors may influence the reliability of the potential outcomes.

All investment strategies have the potential or profit or loss. Changes in investment strategies, contributions or withdrawals, and economic conditions, may materially alter the performance of your portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will either be suitable or profitable for a client’s portfolio. There are no assurances that the portfolio will match or outperform any particular benchmark.

Back-tested performance results have inherent limitations, particularly in the fact that these results do not represent actual trading and may not reflect the impact that material economic and market factors might have placed on the advisor’s decision-making if the advisor were actually managing the clients’ money.

Nothing provided herein constitutes tax advice. Individuals should seek the advise of their own tax advisor for specific information regarding tax consequences of investments. Investments in securities entail risk and are not suitable for all investors. This is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or any other jurisdiction.