When the market suffers a significant downturn and economists warn of an impending recession, investors across the globe start to panic. They want answers and reassurance. They want a voice in the storm to tell them how and why they will be OK. Essentially, they want to know their financial advisor is on top of it now, not later.
As a successful sales professional facing a possible recession, you will no doubt feel pressured to perform at your best before businesses and corporations start looking for ways to cut back and save money. You simply won’t have the time or be in the right mindset to handle re-balancing your own portfolio or wondering why you haven’t heard from your financial advisor regarding your big picture financial plan and its probability of success. The time to stress test your readiness is before the recession begins.
How prepared are you and your advisor for a recession? Here are some factors to keep in mind when evaluating your advisor’s ability to meet your changing needs.
Client Count and Response Time
Being prepared now doesn’t always mean being prepared for what’s coming. When the market turns, time is critical. Advisors need to have the capacity to give each of their clients individualized attention—and not just from an investment management standpoint, but from a comprehensive financial planning perspective. Too many advisors are quick to jump on investing opportunities. They fail to stop and see if those opportunities match the client’s overall plan.
Unfortunately, advisors working at larger firms with unwieldy client loads become inundated with frantic client calls and needs when global markets turn south. At this juncture, one of two things typically happen: (1) they either pass along the workload to a junior or associate advisor not familiar with your case and simply too inexperienced to add true value or (2) they don’t get to your portfolio in a timely manner and miss out on prime opportunities to make lemonade from the market’s lemons. They simply cannot respond to the crisis in a valuable way given the number of clients they service.
Qualifications & Education
Unfortunately, today, there are a myriad of individuals in the marketplace referring to themselves as financial advisors. In reality, though, they have little experience or knowledge of finance, economics, or the best investment principals. A few training courses and a fancy title won’t suffice when it comes to the health of your financial future—especially in times of economic distress or recession.
How educated is the person you take your financial advice from? While qualifications and education certainly are not the only means by which to assess a potential financial advisor, they can reveal multitudes about the way they will handle your finances. Will they base their choices on academic research and Nobel-prize winning portfolio theories? Or headlines and media hype? As a sales professional, your job presents enough variables and risk into your life to manage. Your financial advisor shouldn’t be one of them.
A True Fiduciary
The fiduciary standard is the highest level of financial care specified in the US legal system and requires that an advisor put the client’s best interests first at all times. This might come as a shock to you, but not all financial service professionals are required to do this. In the absence of the fiduciary standard, a financial professional can (and likely will) make recommendations that are good for his own bottom line, not necessarily your own.
This can present a huge problem when it comes to facing a recession. In already distressed economic times, you want to work with someone who will help protect your income, not jeopardize it. Having someone who will dedicate the time and interest to see you succeed in any climate is the type of fiduciary you want on your side.
At Meenes Wealth Partners, we pride ourselves in crossing every item off of this list, and our clients are incredibly loyal and thankful as a result. As a concierge-style financial planning firm, I limit my clientele to a capacity that allows me to provide timely responses in times of economic distress. I am able to give personalized attention to each client and family when time matters most. From the business side to the personal side, I have served in a variety of financial planning and wealth management capacities over the past 25 years and hold top level degrees in the field. Before earning my Certified Financial Planner™ (CFP®) designation, I received both a Master of Science in Finance from Boston College and a Bachelor’s degree Cum Laude in Accounting from the University of Massachusetts at Amherst. Today, I use this background and experience to help individuals and families improve their lives through strategic financial planning and investment management.
Are you a Sales Professional interested in seeing how Meenes Wealth Partners could help prepare you and your finances for a recession? Contact me today to learn more about how I partner with sales professionals and executives to prepare for the unexpected.