Article May 26, 2020

Supporting your entrepreneurial client base throughout a crisis

The clientele of many financial services advisors is largely made up of entrepreneurs in the SME sector. Regrettably, the current crisis is pushing several small businesses over the brink. How can advisors best support those affected by this upheaval?

Approximately one-quarter of Quebec SMEs fear they will not survive longer than a month if their revenues decline by 50 per cent or more, according to a recent survey by Canadian Federation of Independent Business (CFIB). Some fields of activity have been hard hit by the crisis and have come to a complete standstill, while others are benefiting from it and expanding their activities. But whatever their situation, all SMEs have to live with a degree of uncertainty.

“Nobody knows what the future will bring and business owners are worried. They are in a state of flux within a climate of insecurity, where it is unclear when recovery will occur, or whether a recession or a depression might unravel. There are a lot of unknowns right now. It’s difficult for organizations to deal with this level of pressure,” explains Sébastien Lafond, financial planner and vice-president of marketing and distribution at Lafond.

Compounding these difficulties are issues related to cash flow, human resource management (layoffs and retention), and also layers of government support that are not always easy to sort out. As a financial services advisor, however, you can help this segment of your clientele to better analyze risks, identify opportunities and make informed decisions.

59 programs in 56 days

Normand Verville tallied them carefully: in 56 days, the federal government set up no less than 59 emergency assistance programs and measures. For entrepreneurs facing many challenges, it can be difficult to figure out which programs apply to their situation. “We have prepared a summary document to guide them and possibly refer them to other organizations. We also offer webinars on a variety of topics,” says Verville, the assistant vice-president for tax and estate planning at IG Wealth Management (Quebec).

He points out that in these turbulent times, it is a struggle to keep a cool head and remain realistic while not letting emotions run too high. “Many are faced with a real test for survival, which is why it is crucial to help our SME clients assess their finances, set up a budget, identify inflows of cash that they can count on, determine when credit sales can be cashed in and what payments can be deferred, for example,” Verville notes.

While government measures are all well and good, at the company level, many are loans that they will eventually have to be repay. “Some of my clients have to borrow to survive. One entrepreneur told me, for example, that if he didn’t change his business model, he was going to be in debt for the rest of his life...”, says Martin Girard, financial security advisor, group insurance and annuity advisor and mutual fund representative at Girard & Associates CPA. He has also created a file for his entrepreneurial clients so that they can determine which measures are aimed at them. “I have also worked with insurance companies so that my clients can obtain premium deferrals or premium relief, and thus retain maximum cash flow,” he adds.

Invaluable support

Normand Verville emphasizes how essential it is to show clients that you are there for them throughout the storm - not only when things are sailing smoothly. “It’s more important than ever to follow up, support them and direct them to the right resources,” he states.

Anopinion shared by Sébastien Lafond. “Entrepreneurial clients should be contacted three times instead of once. If we sit on our hands, they’ll remember it. On the other hand, by listening to them and making calls, even without a specific reason, it shows that we have their interests at heart and that they can count on us,” he says.

Providing support, attention and advice is essential now more than ever. “We are service companies, and as such, customers must be at the centre of our concerns,” emphasizes Martin Girard.

You may wish to draw inspiration from these general good practices, which are also adapted to a clientele of entrepreneurs, by visiting the CSF’s InfoCOVID-19 page.