Pandemic fallout: Wealth managers say better to be ready than surprised

Pandemic fallout: Wealth managers say better to be ready than surprised

2022-07-11T10:18:42-04:00March 9th, 2021|Banking & Finance, Professional Services, Tampa Bay|

Writer: Joey Garrand 

tampa2 min read March 2021 — The pandemic has forced many to rethink their investment and retirement strategies. Invest: interviewed wealth management and financial planning leaders to gather their insights regarding lessons learned.

According to Drew Catanese, Managing Director for Coastal Wealth, a couple of things emerged through the pandemic. “Firstly, clients really liked having a connection with the person that was helping them. People liked feeling comforted. My team was on the phone every day during the onset of the pandemic, reassuring people of the strategies we set before emotions were present.” Catanese added that the increase in communication was a sign of the times. “When times are good, we typically don’t hear as often from clients. It’s when times are not as good that people have a renewed focus on their investments.”

Ray Ferrara, CEO of ProVise Management Group, also highlighted the importance of client interactions, going as far to say that virtual interviews likely won’t stay in a post-pandemic world due to the necessity for human interaction. “In the financial planning industry, I don’t think we’ll end up continuing with virtual interviews and virtual conversations because of the trust factor that’s involved in our business. People want to see you for real, eyeball to eyeball, to say hello and shake hands and understand who we are, just as we need to understand who they are.” Ferrara went on to describe the importance of in-person meetings not only for client interactions but with fellow advisers. “We’re anxious to get back together again because we do our best work when we can walk down the hall and say, what do I do?”

Given the uncertainty resulting from the pandemic, and the sudden focus on mortality given the tragic consequences of the virus, Catanese said there has been an increase in interest for protection products. “There were a lot of people who became very interested in protection products, things like life insurance, disability income insurance and legacy planning. That’s something we didn’t anticipate. With a renewed sense of mortality and uncertainty, people inherently wanted to protect themselves.”

Ferrara also saw an increase in demand for insurance products at his firm. “I think the pandemic has caused a lot of people to all of a sudden wake up and say, ‘I really need to get off my butt and do something about my retirement plan.’”

Raymond Ifert, president and founder of REI Wealth Management, provides his thoughts on how he safeguards his clients’ portfolios against black swan events such as the pandemic. “We strongly believe in asset allocation and keeping an eye on how much risk is in each of our portfolios. We can go through every portfolio literally every other day and see how things look.” Ifert goes on to explain the importance of dividends. “Forty percent of returns since the Great Depression come from dividends. An equity without a dividend does not have a life jacket.”

Of course, strategy is only half the battle; maintaining emotions is just as important, “Unfortunately, the field of behavioral economics exists because people as a whole are rational but people individually, when it comes to their finances, let their emotions into it too much,” said Catanese. “People hire professionals because we can help them take the emotion out of investment decisions and help make them rational decisions, both in good times and bad.” 

For more information, visit: 

https://www.mycoastalwealth.com/

https://www.provise.com/

https://www.reiwealthmanagement.com/