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What should you expect from your Financial Advisor during the COVID-19 Crisis?

I’ll give you a hint. Communication.

Recently I posed a question to my Retirement Made Simple Facebook Group.

“Have you heard from your financial advisor recently?”

One person responded with “Yes, I hear from them weekly.”

One mentioned that they had to reach out to their advisor and several others said they had not heard from their advisors at all.

The COVID-19 crisis arrived in the US around the middle part of February which means the stock market has dropped dramatically since then. If you haven’t heard from your financial advisor during this crisis then you must ask yourself one question. Do you matter to your advisor?

Should you have received a call from your advisor by now? Absolutely. Does that mean that your advisor should be calling you every week? Not necessarily, but a call to ease your fears, review your holdings and discuss strategy for when the recovery comes should have happened by now. An email communication from an advisor keeping their client base informed on changes such as interest rates and new government programs like the new Paycheck Protection Program (PPP) would be a plus.

Listen, your financial advisor does not work for free. Along the way your advisor either earned a commission or you have paid her/him a fee to manage your money.  Along with that payment comes an expectation of client service.

Don’t get me wrong, some advisors do a fantastic job servicing their clients. Other advisors won’t call you at all unless they know you have more money to invest. It’s almost like they have taken your money and run until you have more money and then they are your new best friend.

Let me give you a little insight on how financial advisors segment their client base. Most advisors will use an A,B,C system when determining how to service their clients. Here is an example of how it might work:

A Clients:
$1 million or more invested
Two face-to-face meetings a year
Four phone calls a year
Birthday and Holiday cards sent
Invited to two client functions a year
Monthly Email Communication

B Clients:
$300,000-$1 million invested
One face-to-face meeting a year
Two phone calls a year
Birthday and Holiday cards sent
Monthly Email Communication

C Clients:
$0-$300,000 invested
Monthly email communication
Will call a C client back but no proactive calls out to client

If you are a financial advisor’s C client, don’t expect a whole lot. Is it right? Not at all, but you see, most advisors are looking to grow their business as much as possible thus the C clients get left behind due to them bringing a lower amount of volume. Again, there are advisors out there that regardless of the size of the account will treat all their clients like an A client. They are harder to find but they are worth looking for.

Do you matter to your financial advisor? If you haven’t heard from them in the last two months, then the answer is no. I’d suggest now is the time to start looking for a new advisor, one that will treat you with respect, keep you updated and educated as well treating you like an A client all the time. Congratulations if you have this with your current financial advisor. If you currently don’t, you deserve better.

There is a contact tab at the bottom of the screen so free to drop me a line if you’d like to chat or I can point you in the right direction.

Live free my friends,
Eric Gaddy

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