Op-Ed: Here Are 5 Lessons the Pandemic Taught This Financial Advisor

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  • As he started to think about plans for his advisory firm in 2021, Dennis Morton, founder and principal of Morton Brown Family Wealth wrote down five lessons he learned this year.
  • Take time this holiday season to reflect, as an advisor, on your own experiences amid the pandemic.
  • Success in guiding clients in 2021 may depend on how well we apply the lessons of 2020.

In between the small gatherings of close family this holiday season, there may be more quiet moments and time for reflection than usual. For financial advisors, this can be a time to pause and think about the lessons we have learned in 2020.

As I started to think about plans for our advisory firm in 2021, I wrote down the lessons from this year and came up with five that apply to our roles as advisors, investors and leaders in the profession:

1. New perspectives

"That could never happen!" Oh, yeah? Remember 2020? Investors and advisors gained a dose of humility this year as predictions and forecasts were thrown out the window. As members of a planning profession, this is an opportunity to change client expectations away from our predictive ability and focus more on what the evidence says could happen.

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2. Average returns

As I write this, the S&P 500 index is hovering around plus-12% for the year, slightly above its historical annual average. Yet, who would describe 2020 as average? This year's stock market got to "average" through stomach-churning drops and skeptical ascents. It takes time and patience, often over the course of years, to get average returns. Advisors had the opportunity to show value this year by keeping clients invested and avoiding the real enemy of average returns: investor emotions.

3. Unexpected catalysts

Financial planning sits on the back burner for many families until it is urgent. Since July, when people began to feel like they could look up and assess the situation, our firm has received more inbound inquiries about planning and investing than ever before. This horrible pandemic has one unexpected upside: It is causing people to want to get their financial houses in order. As an advisor, expect — and be prepared for — the unexpected and be ready to spring into action to help your clients.

4. No excuses

Too often, advisors make excuses for their clients. They assume clients won't understand, adapt or change. This is a quote from a 2016 PwC study about digital adoption in wealth management:

"I think the part that is a little bit overhyped is that there's this whole generation that wants to deal digitally. I think, when the people who now deal digitally — i.e., the millennials — are 50 years old, they'll act like 50-year-olds. They will be more digitally aware 50-year-olds than today's 50-year-olds, but they'll still be 50, right? I think we have to recognize that."
– Anonymous CEO of a wealth management firm.

Think of all the people you know over the age of 50 for whom the digital experience is an indispensable part of family life now. Financial advisors have an opportunity to reimagine their client experience around a willingness of their clients to adopt new methods, not resist them. In this pandemic, clients are showing that they are ready to evolve along with their advisors.

5. Building compassion

In recent months, most conversations with clients begin this way: "How are you doing, really?" The answers have been more than what is new with the kids, or what the plans are for the holidays. They are deep explorations of how it feels to be stuck at home, and how our lifestyles have changed to foster those relationships we value the most. It is deep stuff, and if an advisor was accustomed to leading with performance or wonky data points, it can be a challenging pivot.

Now is the time for advisors to become more comfortable asking meaningful life questions and setting new expectations for what you discuss with your clients.

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It goes both ways, too. I appreciate clients asking me how my children are adapting to school and how I am feeling about so much uncertainty. Sometimes a profession grows by broadening its knowledge base. The pandemic is an opportunity for advisors to grow by deepening our compassion.

If financial advisors take the time to reflect on these and other observations, it starts to bring planning for the coming year into focus. Taking the time to write these down and share them with your team and your clients can open a dialogue about how you can grow stronger through this experience.

Next year could be equal parts Covid-19 continuation and post-pandemic recovery. As trusted financial advisors, success in guiding clients through that transition may depend on how well we apply the lessons of 2020.

— By Dennis Morton, founder and principal of Morton Brown Family Wealth

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