Tips for client education

During the last several months, people have experienced less control over their lives because of Covid-19, and that experience can extend to finances.

Listen to the full podcast on AdvisorToGo, powered by CIBC.

A CIBC poll conducted in August and released last month found that 40% of respondents worry about the pandemic’s effects on their savings and retirement plans. Nearly one-quarter (23%) said they’ve been unable to contribute to retirement savings since the pandemic began.

For those between ages 34 and 55, that figure was slightly greater, at 26%.

“Many feel their expectations for their post-work lives have changed,” said Carissa Lucreziano, vice-president at CIBC Financial Planning and Advice, in an interview.

Of those polled who felt the pandemic had affected their retirement plans, almost one-third (32%) no longer planned to travel in retirement or planned to travel less. And 30% felt they’d need to work longer than expected.

Financial advisors can “step in and help calm the waters” by reassessing clients’ plans, Lucreziano said.

Over the longer term, providing clients with education and guidance is key to their peace of mind during market volatility, she said.

To empower clients to take charge of their situations, she suggested advisors educate them about basic financial concepts, and she offered financial literacy tips by client segment.

After a period of market volatility, retirees or near-retirees may be particularly fearful about the impact on their portfolios, and may consider cashing out their investments. As such, Lucreziano suggested advisors make them a high priority, connecting with them frequently to provide advice.

Periods of volatility provide an opportunity to educate these clients about historical market fluctuations and to re-evaluate their plans, considering the market’s impact on funding retirement. These actions will “provide clarity and increase confidence,” Lucreziano said.

She also suggested reminding clients about estate planning, including creating or updating wills and powers of attorney, and discussing plans with family and executors.

Clients who are students may be challenged to find part-time work amid pandemic closures.

“This is a great time to educate them on budgeting, as they are likely experiencing many changes in their cash inflows and outflows,” Lucreziano said.

She suggested providing students with online tools like budget calculators as well as ideas to track and manage spending.

Affluent clients and high-potential starters may be in better financial situations because of the pandemic.

For example, research from September shows that Canadians who are saving more during the pandemic tend to be young, university educated and earning more than $100,000.

For these clients, Lucreziano suggested providing education related to investing and long-term goals.

Clients who are new to Canada have the stress of adjusting to their new lives as well as the pandemic. For them, Lucreziano suggested focusing on foundational financial concepts.

“Talk to them about their source of income relative to their basic expenses like rent, food, utilities and medical costs,” she said. “Tie in how credit cards work and how to manage that debt.”

Information about government and community support programs can also be provided.

“Helping them build a solid foundation will help set them off on the right foot and secure your advisor-client relationship,” Lucreziano said.

She suggested helping all clients establish emergency savings, which became crucial for many during the pandemic.

“Talk to [clients] about setting up a regular savings plan or putting a specific amount of money aside where it can stay secure,” she said.

Clients may also be more open to deeper discussions because of their pandemic experiences.

“It’s beneficial to discuss revisiting retirement planning or starting to help them envision long-term financial goals and what it will take to get there,” Lucreziano said.

This article is part of the AdvisorToGo program, powered by CIBC. It was written without input from the sponsor.