The coronavirus pandemic and the economic crisis that has stemmed from it is reminding people of the need for financial planning. Therefore, advisors and planners alike have been fielding more calls than ever, or at least in recent memory.
When the market is good, it can seem easy for investors. Chances are, if the majority of things are going up, so are most portfolios. But when the economy tanks, it takes a capable professional with knowledge of long-term investment strategies to steady the ship and keep the engines running.
The wealth management industry is experiencing a flood of inquiries from potential clients. Some are looking for new managers, while others are searching for their first financial advisor.
Many new clients are coming in the form of former DIY investors. When things were good, these types enjoyed feeling like it was their capable hands that unveiled new mines of wealth. But it has been 10 years since the last crash, and now these once confident do-it-yourselfers are looking for help. Simply, they don’t know how to handle a crash because many have never seen one before.
According to a survey of over 2,000 adults by Nationwide Financial, 24 percent of respondents engaged a financial advisor for the first time ever. It also found that 80 percent of respondents felt they had lost control of their ability to manage their investments and finances since the coronavirus crisis began.
Overall, investors are feeling frightened and frozen. According to a study by the American Institute of CPAs, COVID-19 has Americans’ financial satisfaction levels at the lowest since the 2007-2009 financial crisis.
The markets plummeted 33 percent over five weeks in the first quarter of 2020. It took 16 months for the markets to tumble 50 percent during the 2007 through 2009 financial crisis. Since then, the S&P 500 Index has rebounded 26 percent and is now down about 13 percent since the beginning of the year. Still, the kind of volatility that is being seen in the market day after day has investors worried.
It’s all driving investors towards financial advisors. And with more technology at advisors fingertips than ever before, it’s becoming easier to stay in touch with everyone, while also recruiting new clients.
The coronavirus crisis has led many potential clients to the conclusion that they can not go it on their own. For financial advisors that’s certainly a benefit despite the turmoil surround markets and the world right now.
