An old colleague rang up from overseas for a catch-up call last week. He’s changed since the old days, has become better balanced, lost the shark-like aggression and substituted solid common sense and a more reasonable view of unreliable markets and flashy products.
Without too much trouble, you can even get a word in edgewise now.
In his original incarnation, my friend was the very model of the modern investment banker. He made his first ten million, then lost it; he then made another ten mil, picked up a few lessons on the way and managed to keep it. After some time, he had something of an epiphany, left the bulge bracket and hung out his own shingle.
Nowadays, he still serves the very rich, but shares his talents and unique insights – he phrases it just this way – with average professionals and plain, ordinary folk, as he puts it. “People just like you,” he observed. In Boston, he’s what we call a hot ticket.
I told him about the trends we’re seeing at our end of the financial planning galaxy, all in response to the coronavirus plague. Old clients are updating their accounts, changing their policy provisions, updating their beneficiaries, and getting essential documents in order. Even the most resistant clients have realized it might be a good time to make a will. Life insurance is right up there with paper towel and toilet paper in popularity, and the good news is that some carriers are waiving medical exam requirements for applicants who meet certain health and age criteria.
The most prepared are not only updating their insurance and retirement account beneficiaries but asking for advice on living wills and even DNR – do not resuscitate – orders. Advisors need to wear many hats these days and offer all manner of counsel.
“Yes, I know all about it,” said my friend; “It’s the COVID-19 inspired new maturity.”
Say what you will about him, it’s fruitless to think you’ve uncovered a trend that he hasn’t: he’s usually way ahead of the curve. That’s why he has so many clients – in our business, personality isn’t all. Performance and dependability can often trump eccentricity.
He’s had the same experiences. Not only are established customers calling or voluminously emailing: exploratory calls are coming from new leads, people suddenly determined to get their financial houses in order. Some are young, convinced by global instability that a will is wise – even single folks worry now about who might take care of them and how treatment can be funded in an emergency.
Unemployment fears are a very real facet of the new viral reality. Perhaps it makes sense to sock something away, fund investments that can pay an income, or cover the cost of moving to a new town or state, if that’s what it takes to resuscitate a career. Young professionals with spouses or children are the most keenly anxious. The don’t want medical bills to cripple the family finances or see privation forced on loved ones by a sudden income shortfall.
The eternally uncomfortable issue of death has even been broached – what if? Could a spouse or close family member easily access assets, and indeed, can they even be found? Sudden death means burial expenses, potentially traumatic to arrange in the event, but easily sorted out well before, if only the right insurance and legal matters are arranged. In a startling change of roles, we’ve been fielding demands for answers, rather than forcing the grim reality on unwilling listeners. Times have changed, quickly and dramatically.
Consider another of our colorful associates. Derek is a lawyer by profession, who made a reasonable fortune by managing properties in New York and Paris. For years, he shuttled between these two brilliant cities, with a social life we’ll modestly leave to the imagination. One day, he stumbled upon a soul mate of all things, a well-off professional in her own right. Circumstances suddenly aligned to allow a change of direction.
Derek decided – hold your breath – to become an EMT technician. This was just four years ago. With no more warning than the rest of the world, he was suddenly among the most important people alive, particularly in the locales of Brooklyn and Manhattan. With his team, he helped save the lives of uncounted coronavirus victims. Then it happened: Derek came down with the disease himself.
You’d think he was lucky, with resources, a comfortable home where he could recuperate and a spouse to take his temperature. All well and good, until she fell ill, too. They’d always thought, like couples eternally, that when one was struck down, the other would handle things. Now, they were both down for the count.
Suddenly, there no one to call on. His mother is alive, a spry 82, but perhaps beyond managing this heavy burden. Coronavirus can be extraordinarily debilitating, Derek told us. It was impossible to answer the many questions that came to fevered minds: have we arranged things if the worst happens? How are our investments performing? Who would take care of the dog – that was a particularly acute concern. Worst of all, perhaps, no healthcare proxy agreement was in place – after all, each thought the other would do the duty. It had never occurred to them that having a third option might be prudent. We’re certain their estate planner and financial advisers would have a few unfortunate tales to tell about advice unheeded.
Yet another lawyer of our acquaintance, Marianne, was the first of our associates to contract the disease, and she taught us much of what we know. She’s a single mother with a teenage son in her care, and while she was ill, innumerable fears tormented her. Once well enough, she conducted a systematic review of her affairs, a very wise course, and luckily not too late. Marianne was surprised to find so many holes and discrepancies.
For example, two 401(k) accounts, relics from earlier jobs, still had the original beneficiary designated – her mother, now long deceased. Marianne says the only thing assuaging her guilt was the fact that so many friends, all professionals, were in an even more precarious state. Some of them, with children under their care, didn’t even have wills.
A will is easy enough. One needs only to download an online template, fill in the blanks, designate one or more beneficiaries and indicate who gets which assets. In most states, the document can be notarized online. It’s a perfect emergency move, but the next step must be more thorough. A careful list of those assets – the kind of document that should be kept ‘live’ on one’s desktop for updating, as forgotten treasures spring to mind – needs assembling.
When the dust from the viral crisis settles, we expect many substantive conversations will be held with estate planning professionals. Another crisis, whether global or intimately personal, will certainly come. Maturity – we prefer responsibility – has now become the new normal.
For more information, please read:
5 Financial Boxes You Should Check Before COVID-19 Strikes | Kiplinger