Frequent questions from clients in these turbulent times

“Extremely busy.” That’s how most CSF members have described the past two weeks. First, the stock market crash had clients worried about their investments. Then, they were worried about liquidity due to the many job losses. Then, a new wave of investors sought to take advantage of new opportunities on the market. On top of it all, there’s a health crisis and the fear of contracting the virus. These are unprecedented times. We need to be resilient and flexible, and most importantly, stay calm and reassure clients.

Stay invested despite worries

“Many clients contact us to find out if they’re going to lose all their money because of falling stock market prices,” said Sophie Lemaire, a financial planner, mutual fund representative and wealth management director at PPTA Financial Services. Of course, investors are very stressed, but she reminds them that a well-diversified, balanced portfolio cannot lose all its value. “It has often been demonstrated in the past that this type of portfolio weathers stock market crises, through good diversification and a large number of securities. The bond portion is currently doing its job well, protecting part of the capital against decline.”

If clients ask whether this crisis is worse than the others, Ms. Lemaire tells them that this is certainly a difficult crisis, full of unknowns, but that we have weathered many before. “The most important thing to remember is that markets won’t necessarily wait until everything has settled down before rising for a few days. That’s exactly what we saw happen last week. So it’s best to stay invested and not miss the rebound.” Ms. Lemaire believes the best advice to give most investors now is . . . to do nothing, or invest more if they can!

Review pre-retirees’ plans

Jean-Maurice Vézina, a financial planner, financial security advisor and group insurance and group annuity plans advisor, and founder of his own firm, a part of IG Private Wealth Management, shared the following view: “It’s more important than ever to have a plan and stick to it. That said, we also have clients who wanted to retire this year and are asking whether they are going to be able to. In this case, we look at their situation and review the game plan based on their needs.”

Mr. Vézina also mentioned that clients feel a strong need to talk to their advisor. “They can access their investments online with a few clicks, but they seem afraid to do so. They prefer talking to us. They want us to explain what’s going on.”

In the circumstances, CSF members’ advisory role is more important than ever. “Even self-directed investors are contacting us,” added Mr. Vézina. “They want to hear from professionals who, like us, have the skills and training to give an informed opinion. For many, it’s the opportunity of a lifetime to make lucrative investments. We saw the same thing in 2008–2009.”

Explain and reassure

Shirley Marquis, a financial planner, R.L.U., financial security advisor, mutual fund dealer representative, and partner and senior director of financial and tax planning at SFL Wealth Management, believes there is a widening gap between two types of clients. “Some clients want to take advantage of stock market opportunities and take out an investment loan so they can buy low. Others are looking to defer or even cancel their insurance coverage even if the cost is very reasonable,” explained Ms. Marquis. “Whatever the situation, now more than ever people need an advisor to guide them, whether it’s for budget management, investment portfolios, obtaining financial support or reviewing their insurance coverage. CSF members are well equipped to address these concerns.”

Ms. Marquis also said that, starting in May, advisors will be very busy helping clients review their budget and find strategies to repay loans and credit cards. “This will also be the time to encourage them to set up an emergency fund to make sure they don’t find themselves in difficulty if this kind of situation happens again.”

Be proactive and contact clients

Antoine Chaume, a financial planner and financial security advisor at Lafond Financial Services, says the best thing to do is reassure clients and be proactive, advice that the CSF also gives its members. “We shouldn’t wait for them to call us,” said Mr. Chaume. “We should be proactive and contact them to address their concerns. They appreciate the fact that we’ve taken the time to do so.”

To assist them in these turbulent times and help them weather the storm, Mr. Chaume’s advice is to stay calm, be realistic without being alarmist and continue playing a supportive role.

With all the information that is available, professionals also need to stay up-to-date, summarize and explain, so clients can make informed decisions. “In the current context, we can see just how important our knowledge and training are,” said Mr. Chaume. “We can understand the situation and draw conclusions, then explain and reassure our clients. I always say that in our field, we manage people, not money. It’s important remember this, even more so now.”

Refer to the CSF’s Info COVID-19 section for more information