COVID-19: Good practices to support clients facing difficulties
Martin Savard, Executive Vice-President at MICA, a financial services firm, didn’t wait for the phone to ring. Instead, he took the initiative to contact his clients. “I called clients who may encounter problems,” he explained. “This included self-employed workers and business owners not on the list of essential services: osteopaths and massage therapists, for instance.”
Mr. Savard helped them revise their budget based on their new reality and provided official information on government assistance programs, such as the Canada Emergency Response Benefit (CERB). “I also advised them on how to maximize their cash flow,” added Mr. Savard. “It’s important to remind clients that the CERB is taxable.” He also mentioned that it would be necessary to follow up with them in a few months.
Some clients wonder whether they should stop their automatic RRSP contributions. “Again, it’s important to look at each individual situation. If my client has kept their job, I advise them to keep making payments,” said Mr. Savard. “If not, I review the investment strategy to find the best solution for them.”
Mylène Lapointe, a financial security advisor and mutual fund dealer representative, also talks to her clients about bill payments that can be deferred (income tax balances, municipal taxes, GST-QST and mortgage payments, for instance) and provides basic information on the various government assistance programs available (Canada Emergency Response Benefit, Increased Canada Child Benefit, Increase to the GST/HST credit amount and the Canada Emergency Wage Subsidy).
“It’s equally important to help them understand the medium-term consequences of deferring payments,” said Ms. Lapointe. “For example, suspending mortgage payments for a few months will affect the total amount of interest payable. It’s important they take this into account in their calculations.”
Mylène Lapointe also focuses on revising budgets. “I help clients establish a game plan, which involves prioritizing expenses and thinking about which ones they can cut or reduce,” she explained. “As advisors, it’s our role to help them to separate fact from fiction. For example, we often hear things like, ‘My neighbour told me that it’s a good time to invest.’ But it’s better to maintain your cash flow and not improvise in this,” advised Ms. Lapointe. “It’s better to seek advice from professionals rather than a brother-in-law!”
A pandemic toolbox
When the crisis started, André Buteau, a C.L.U. and financial planner, decided to roll up his sleeves and do something to help. “I was getting calls from clients who were really stressed about the situation. So I quickly put together a ‘pandemic toolbox’ containing different resources,” explained Mr. Buteau. “This list appears in my email signature, and I update it regularly.”
His toolbox includes official COVID-19 information sites, governmental economic response plans, as well as links to posts on resilience, controlling anxiety, activities for children, physical activity and some legal matters (mandates and wills, for instance).
“There are plenty of reliable sources: the CSF, as well as health authorities and financial authorities, like the AMF,” said Mr. Buteau. “It’s important to stay in learning mode and provide quality information to clients, such as charts showing the stock market rebound after each crisis in recent decades, which reassures them.”
Mr. Buteau also highlights the importance of the relational aspect. “When I call my clients, I ask about their health and how they’re doing first. We need to be empathetic and not just talk about their investments and financial products.”
Newsletters and webinars
Amine Chbani, a financial planner and founding president of FinEduc Performance, a firm that offers services to businesses to help their employees achieve financial well-being, regularly sends a newsletter to clients to keep them up to date with the situation. “I explain, for example, what’s happening in the stock market. I don’t have a crystal ball or recipe, but the most important thing is to be honest,” said Mr. Chbani. “I’ve always found that people are very emotional when managing their finances. Emotions are not good advisors. We need to stay focused on our objectives, and this is particularly important right now.”
Mr. Chbani also offered two webinars at the start of the crisis to explain different tax and financial measures to his clients. In addition, he recently gave an online talk on analyzing the markets and identifying opportunities.
Consult the CSF’s InfoCOVID-19 section for more information