The economic cost of the coronavirus crisis cannot yet be calculated, but the first effects are readily apparent to everyone.
Uninformed opinion and advice are rife, as usual in stressful times, but your clients need better out of your office. Let’s consider the ways you can help them in these testing days.
The Financial Industry Regulatory Authority (FINRA) has asked advisories to allow employees to work remotely from home – as many workers as possible. This shouldn’t cause undue dislocation of operations, assuming your practice has a good continuity plan in place.
Following the September 11, 2001 terror attacks, most businesses created protocols that support remote operations during a crisis. The conditions imposed by the pandemic will surely test these plans’ efficacy and force rapid adjustments if shortcomings are revealed. We expect many ‘lessons learned’ meetings in the coming weeks, with some needing immediate application, and others useful for future continuity planning.
FINRA emphasizes that our fiduciary responsibility to clients has not diminished in the face of the Coronavirus crisis. Indeed, we would argue that more needs doing than usual: many clients are facing harsh economic realities and will need rapid, accurate advice and flexible solutions, quickly applicable, in order to carry on without undue disruption of their lives and established financial plans.
The regulator wants advisories to conduct a rapid risk analysis to identify the key impact nodes requiring immediate attention. Dissipation of effort in unfocused, unplanned action can hardly help clients today and may indeed be a guaranteed way to cause unwitting harm to their interests, to say nothing of the impact on the firm’s long-term health.
The risk assessment must also consider dangers to the continuity of the firm’s business, both in immediate terms and in relation to its long-term viability. No one knows yet how long the crisis will last, so it’s difficult to assess its impact on deep-horizon operations. Nevertheless, as hard information appears, the assessment process should become easier, planning more realistic and reactions more effective.
Ferreting out solid information, while filtering anything based on rumor or mere speculation, is the first order of the day.
Meanwhile, the pandemic is forcing advisory partners – and indeed, the owners of all businesses, great and small – to examine a disquieting issue: what would happen if key personnel were incapacitated or suddenly passed away? Today, this could involve an important executive being quarantined abroad, medically isolated at home or perhaps needing immediate treatment for the virus.
What would your business do in such cases? Plans may be in place, but situations can arise today that were never codified or even considered. What if an important decisionmaker is trapped on a cruise ship – no laughing matter for thousands of people today. WiFi coverage may be spotty or unavailable at a time when vital matters affecting the health and even survival of the business are under consideration. If a key player is out of the loop, creative solutions are the order of the day. If your firm is immune to these worries, it’s still a good time to plan – we fear this isn’t the last viral outbreak we’ll see.
Industry leaders are looking to FINRA to provide accurate information, practical guidance and effective leadership to assure that clients are not victimized by the Covid-19 crisis. Advisories themselves must be proactive and self-regulating, too. Clients need realistic advice and the assurance that we’re working in their best interests. No matter the strains inflicted by the crisis, we must set high targets for achieving our fiduciary responsibilities, and then strive to exceed them.
For more information, please read:
Pandemic Ready: What Your Clients Need From You | ThinkAdvisor