Advisors adapt to ‘new normal’ as pandemic has changed how firms connect with clients

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As disruptive as the coronavirus pandemic has been for the U.S. economy and financial markets, the country’s top financial advisors have managed to find ways to adapt to the changing circumstances of a new normal.

The community shutdowns across much of the country have profoundly changed how advisors operate and interact with clients.

“The health crisis, the cultural crisis, the financial crisis and the election crisis have made for a tumultuous 2020,” said David Rea, head of Salem Investment Counselors, which ranked No. 1 on CNBC’s FA 100 list for 2020. “It is stressful, of course, but our ability to manage stocks and bonds and to communicate with our clients is unchanged.”

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Not that the pandemic hasn’t caused major shifts in the way advisory firms operate and serve their clients. It has.

Yet for many of the top firms in the country, the pandemic and the resulting shutdowns have simply accelerated trends already established in the industry — the two biggest being remote working by employees and more virtual communications with clients.

California Financial Advisors, ranked 9th on the CNBC FA 100 list, had a leg up on most firms when it comes to dealing with the new environment.

We didn’t see a pandemic coming, but we used all our planning for this situation.

Michelle Perry Higgins

principal at California Financial Advisors

“We’re in the middle of an active earthquake area and we’ve been planning for a big quake for years,” said Michelle Perry Higgins, principal at the San Ramon, California-based firm. “We didn’t see a pandemic coming but we used all our planning for this situation.”

She had to buy more computers and monitors for employees at home, but said that policies and protocols already in place — particularly with regard to the sharing of client data from remote locations — helped the firm quickly adjust to the office shutdown.

“This has happened in an era where if you did your planning, you could manage quite well,” she said. “Independent advisors are used to working 24/7 already and they have to have the ability to work anywhere anytime.

Michelle Perry Higgins, principal at California Investment Advisors in San Ramon, California.

California Investment Advisors

“This situation confirms that.”

Higgins has established a strict rotation schedule to allow employees to come to the office if they wish and said the firm will keep its office largely closed until January, subject to regular evaluation.

In early March, as the coronavirus began its alarming spread across the country and stock prices were plunging, Alison Gamble and her team of financial advisors were working the phones to check in with her roughly 600 clients.

Gamble, president of Gamble Jones Investment Counselors, which ranked 15th on the CNBC FA 100 list, said she had closed her Pasadena, California-based office and was scrambling to help employees prepare to work from home. With communities across the country shutting down and financial markets tanking, clients were her top priority.

When you’re welcomed into a client’s home and they’re feeding a toddler, it creates a new level of intimacy.

Kip Keener

chief compliance officer at Salem Investment Counselors

“March and April were stomach-churning months,” Gamble said. “We started very proactively reaching out to clients, particularly older clients living alone.

“Mostly we wanted to check that they were doing OK and very often didn’t talk about the markets at all.”

Gamble did have some conversations about investment portfolios and allocations and made some adjustments for particularly stressed out clients, but for the most part, she was simply calming frayed nerves.

“We’re long-term, goals-based investors and I think our clients know that we’re looking after them and their assets,” she said. “Most of them were comfortable going into this.”

The overall experience has gone so smoothly that Gamble expects to establish a more flexible work schedule for employees permanently and anticipates that some staff may work two or three days per week from home.

That, in turn, has her rethinking her office needs.

“We have way too much real estate,” Gamble said. “I expect to reduce our office footprint by 50%.”

On the client front, Gamble said that people — even those used to regular face-to-face meetings with their advisors — are reacting remarkably well to the new reality.

Salem’s Rea has had a similarly positive experience.

David Rea, president of Salem Investment Counselors in Winston-Salem, North Carolina.

Salem Investment Counselors

“We’re a high-touch firm but we told clients not to come in and we do no traveling now,” said Rea, whose Winston Salem, North Carolina-based office has remained open through this year.

“Most of our clients are used to email and texting but Zoom was new for a lot of them and for many of us,” he said.

It and other video-conferencing technologies are now an essential part of Salem’s client service model.

Kip Keener, chief compliance officer for the firm, said that the shift to virtual communications has, in many cases, helped advisors make more personal connections with their clients.

“When you’re welcomed into a client’s home and they’re feeding a toddler, it creates a new level of intimacy,” he said. “We think that’s pretty cool.”

The recovery of the stock market has gone a long way to calming investors, yet advisors expect that dealing with the extraordinary volatility in financial markets this year will continue to be a challenge.

 ”There is a constant feeling of anxiety stemming from the uncertainty of the pandemic, the stock market and the election,” Higgins said, “With millions of Americans sitting at home, I think that the anxiety builds.”

She said that after the dramatic recovery in stock prices, she is taking profits and counselling clients to stay the course. “It’s going to continue to be volatile,” Higgins said. “I think the new normal is about getting used to feeling uncomfortable.”

For his part, Rea said it’s been “surprisingly quiet” for a couple of months. “I think clients have hunkered down.”