More than a third of certified financial planners are telling their clients to hold off on making any major financial decisions until after volatility caused by the COVID-19 pandemic eases. The Certified Financial Planner Board of Standards released research on Tuesday that shows 36% of CFPs say this wait-and-see recommendation is the primary advice they’re giving their clients.
Advisors are trying to dissuade their clients from making rash decisions that could hurt their portfolios in the long term. In addition to encouraging them to stay the course, they’re also working with clients to review their short- and long-term goals (16%).
Over 78% of respondents said they’re hearing from their clients more since efforts to control the pandemic roiled markets, and 70% say those clients are concerned about volatility and protecting assets.
Advisors are also hearing from more people looking for professional financial guidance. CFP Board found 34% of advisors have had an increase in prospective clients reaching out.
“The spread of COVID-19 is having a resounding impact on all aspects of our lives,” Kevin Keller, CEO of CFP Board, said in a statement. “While no one could have predicted the magnitude of this pandemic, research has shown that Americans who enlist the help of a CFP professional to create a holistic financial plan feel more confident when faced with economic uncertainty.”
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Although recent volatility has clearly demonstrated the value of professional advice, many CFPs are feeling the pinch from increased calls from clients. The survey found 17% of respondents say managing increased communications is one of their top challenges.
The magnitude of the pandemic and resulting volatility has forced another challenge to the top. The same percentage of CFPs say their clients are “leaning on them as a therapist first, and financial planner second.” Two-thirds of advisors put their clients’ stress levels at high or very high.
“The findings show that during the current health and economic crisis, CFP professionals play an important role in counseling Americans through stress and uncertainty,” Keller said. “It’s inspiring to see that the competent and ethical financial planning advice that CFP professionals provide to Americans is making a difference in helping people feel prepared to get through this unprecedented time.”