Curbside Financial Advisors
Financial Services During Social Distancing
Prior to February 1993, I had never heard the term “Disaster Recovery Plan.” To be sure, most of the ivy league MBA’s I worked alongside hadn’t either. Unfortunately, that year, the parking garage bombing at the World Trade Center brought heightened awareness to disaster planning. It was quickly placed at the top of most large Wall Street firms “To Do” list.
Planning from scratch to have the ability, during a crisis, to work remotely took a lot of work. Offsite offices were set up in other parts of Manhattan and across the river in New Jersey, where copies of our physical files were sent at the end of each trading day. As a fund manager, I’d go once a month to one of these locations to trade; we were testing for holes in our process. My employer was one of the largest fund managers in the world; they wanted to be out front and be considered a role model in disaster preparedness.
Administering all that needed to be done was an arduous task. My department appointed someone who had no other responsibilities except for disaster planning. Germaine, the woman, given responsibility for designing and implementing our plan, received weeks of offsite training and an officer-level promotion. She took her role seriously. Germaine assigned four searchers on each floor, two for the Men’s room and two for the Ladies rooms. Monthly she made sure we had updated phone list printouts to bring home with office numbers. Our trading turrets had direct lines and speed-dials, so we made sure we recorded actual numbers from all the broker/dealers we did business with. Each floor in the building was assigned someone to learn first aid and be the Fire Marshall. I volunteered for this responsibility. Part of what I did was, whether I was in my office or out on the trading desk, I kept a small bag with a first aid kit, transistor radio, extra batteries, and a whistle. Fire Marshalls were expected to be ready at all times. I even planned vacation time around other Fire Marshalls.
To be honest, I never took any of this seriously. We worked in a building that had been there forever, and in a big city. Work is always open -- it always will be was the belief. Plus, conducting business from home would be impossible, it seemed. I thought, how could someone even follow compliance procedures for physical documents from home? So, despite our disaster recovery plan, whether we were hit with two feet of snow, railroad strikes, race riots, subway bombings, or hurricane threats, none of us ever questioned if we were going to the office. Regardless of circumstance, we decided how we were getting to the office.
That was over 25 years ago, and much has changed. Back then, work and office were near synonymous. Home was separate; my briefcase may have looked like I was bringing work home; instead, it was always full of boating magazines, how could you work outside an office? Today, we don’t need “the office” to work. We all have the same quality connectivity at home that we do in a commercial building, our phones are all speed dial, and if we haven’t saved every phone number of anyone we’ve met in the past ten years, there are other medium we could use to contact them. A phone isn’t even the preferred method of contact between many coworkers, and our work desks are not always our most productive work area.
The changes brought about by technology and attitudes of management to allow technology to be used at it’s optimum have ushered in a wave of flexibility in the workplace that we never conceived of in the early ’90s. Working from home (WFH) has taken great strides forward. Over the past couple of months, a global threat has forced WFH to take another giant leap forward. The challenge today, unlike 1993, is that a plan has to be created and implemented almost simultaneously. Almost everyone across the globe is impacted, and it is recommended that face-to-face meetings not occur.
These are challenges few planned for. For financial planners and advisors, the extra challenge is that at a time when rollercoaster markets and IRA season, and layoffs create a “need” to see clients, government authorities are telling us we should not be in contact with anyone. There are some great solutions.
Advancements in technology, including the ability to convey, retrieve, and file information electronically are light years ahead of even a decade ago. For investment professionals, the ability to get real-time quotes, conduct research, apply comparative analysis, and execute effectively is often better than it was at the top Wall Street trading desks when George Bush was president. For professionals that sit down and meet with clients regularly, small computer-based demonstrations and scenario tools that are on a laptop or tablet, make work-life much easier. So, switching gears and spending fewer hours or no hours in the office is barely a disruption. The disruption is limited physical contact with mom & pop clients. Don’t ignore them, if you have the time, do even more than before to interact with them.
Your clients trust you; they’ve become your family; within the past six weeks, they might need to meet with you more than ever before. Let’s just say: Last year, you began a client relationship with a family that had two children going to college and funded a new IRA account with you. They are deciding what to do with this year’s contribution. And, a woman you’ve been working with for ten years was just let go when her company closed and is considering early retirement, she wants you to look through all of your papers. Also, there is a client who you’ve known since high school that wants to discuss the best way to invest in gold. Meanwhile, your third-largest client wants to look you in the eye and hear why his account is a third as large as it had been. None of these meetings should be had over the phone or through an email discussion; They’re too important, yet, meeting in person is not at all advised.
Addressing the immediate needs of clients should be done ASAP. For the others checking-in, especially during times of crisis, builds stronger bonds. I like to say when you’ve been “in the trenches” with someone, you build a lasting bond. We’re all “in the trenches” right now. Be with them. You don’t need special technology to not only “visit” with as many people as you can, but use technology to visit with far more than you ordinarily would have. They probably have the technology in their own homes too. Only use phone calls when you have to. Find out what they have available and cater to them, they may not even know. If you have an assistant, see if they can schedule appointments and talk to the client through whatever tech issue they may have to either Facetime, Skype, Zoom or even Go to Meeting. I’ve found that my less technically savvy interactions are with people that have never heard of anything on that list but have a Gmail account. You or an assistant can ask them to open their Gmail account, look for “Chats” on the left side of their monitor and open it. Once opened, providing you are also using a Gmail account, open yours and send them a Chat Hangout request. Then click on the camera icon on the request to be with them.
Compliance, notarizing, and suitability updates at times require the exchange of documents. If your clients live close, taking the extra step and stopping in their driveway to pick up forms or collect a signature may give you something to all talk about down the road. While you’re there, you shouldn’t greet with a handshake or other physical greeting. Almost everyone will understand and perhaps appreciate that you are looking out for them by staying six feet or more away. FedEx overnight is also a means of getting the required paperwork. Although this may seem like an additional cost, so much of your business has been streamlined by not meeting in an office that it could actually be viewed as a transfer of costs.
It’s now the end of the first quarter. Do you typically rebalance client portfolios? Chances are there have been gargantuan shifts. High-quality bonds are richer than they had been, and equities are lower than they were. The reason to rebalance investments is because it takes gains in the rich sectors and buys into the sectors that now may offer value. It isn’t a perfect plan, but over time the strategy is better than letting the percent balance mix move too far off the plan.
If you’re a financial professional, you don’t need anyone to tell you that if you're using your car more, house more, and home internet more, that these are business expenses that you should document for your own tax bill. Keep meticulous records; it adds up. Remember, you’re the last profession the IRS will accept faulty financial recordkeeping from.
Limits on WFH
Is there a cat laying on your keyboard? A dog barking during your phone call. Did you forget to dress better (or at all) for your video conference? There are downfalls and limits to what can be done at home. But these limits are now inconveniences, not impossibilities. If you have to do curbside delivery of financial documents for a while, it may not seem like the best use of time, but you are probably gaining more than you can measure from the exercise.
Despite what you have been told, being socially distant from clients is ill-advised; all that is required is being physically distant -- for just a little while.