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COVID-19 and the Financial Planning Profession

By Kevin Keller, CAE April 21, 2020 LinkedIn

Every single aspect of the global economy has been impacted by the COVID-19 outbreak. Across the financial services sector, major institutions and upstarts alike are feeling the effects of this crisis.

The financial planning community is not immune. CFP® professionals are fighting on the frontlines – not in the hospitals and grocery stores – but in the living rooms and home offices of millions of Americans who are justifiably rattled by the uncertainty this pandemic has brought to their finances and daily lives.

In times like these, the value of financial planning is more evident than ever, as more people seek the counsel of CERTIFIED FINANCIAL PLANNER™. In a recent survey conducted by CFP Board to assess the impact of the pandemic on our CFP® professionals and their clients, 78 percent of those surveyed reported seeing an increase in client inquiries over the past 30 days, with 34 percent reporting an increase in inquiries from prospective clients.

These findings demonstrate how crucial it is for people in all walks of life to have access to sound advice in the face of economic uncertainty. That is particularly important, given that more than 64 percent of CFP® professionals surveyed report that their clients are experiencing high or very high levels of stress as a result of the COVID-19 outbreak.

The survey reveals that when clients pick up the phone to call their CFP® professional, they are primarily worried about Protecting Assets (72 percent) and Managing Volatility (74 percent), and to a lesser extent, Ensuring Liquidity (35 percent) and Unemployment or Reduced Income (34 percent).

Many CFP® professionals are urging patience. Our study found that for more than one in three financial planners surveyed, their primary recommendation to clients is “sit tight” and wait until volatility decreases before making any major financial decisions. Other primary recommendations include reviewing and updating short- and long-term goals (16 percent) and rebalancing portfolios (17 percent).

As a financial planner, operating in today’s climate can be especially challenging. Our surveyed CFP® professionals say that the biggest challenges they face today are maintaining more frequent communications with clients (18 percent) and the emotional factor (17 percent).

This shows what many CFP® professionals already know: in times of crisis, clients often need their financial advisor to play the role of therapist before playing the role of planner. CFP® professionals – who know their clients and their goals and aspirations – help reduce the degree of emotion in their client’s decision-making. That paves the way for the financial aspect of their advice, as they guide the client toward making prudent decisions aligned with the client’s long-term financial plan.

Regardless of the strategy, what’s most important is that a financial plan is in place. Nearly all surveyed CFP® professionals (94 percent) agreed that Americans with a financial plan are more likely to make progress toward their goals, even while going through times of economic uncertainty. What’s more, research suggests that Americans who enlist the help of a fiduciary to create a holistic financial plan feel more confident when faced with economic uncertainty.

With anxiety levels higher than normal around the world, CFP Board applauds the CFP® professionals who are working tirelessly throughout this pandemic on behalf of their clients and their financial futures.


This article was originally published on LinkedIn on April 21, 2020.

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About the Author: Kevin Keller, CAE is Chief Executive Officer of CFP Board. CFP Board’s mission is to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for competent and ethical personal financial planning.