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For the past 60-plus days, due to COVID-19, each and every financial services firm has been tested to the point where they know exactly how strong their firm is. Looking into the mirror is rarely easy, but now more than ever a good look into the mirror may help to discover who you really are and who you need to be.

This could be the best practice management lesson of all time. For the CPA firm with a wealth management division, you are testing your business continuity plan, personnel, client relationships, and your being truly present in the 21st century.

Client relationships are the key to our existence. The current environment will be an excellent test of the strength of your client relationships. From a wealth management perspective, if all you’ve got to talk to clients about are the financial markets, you may be in trouble.

You know that I always advocate for a comprehensive planning relationship, and for many firms that simply isn’t happening. If your client thinks lousy portfolio performance and immediately equates that to you without the benefit of all of the other fantastic benefits from a comprehensive planning relationship … there is no time like the present to up your game.

Yes, it is true that financial markets may be the only thing that some clients want to talk about, but there are plenty of other issues hidden in plain sight that can improve your clients’ financial lives. These are the other elements of a comprehensive planning program that put financial markets and investments into perspective. Some of that is to focus on matters that are in your clients’ control that will impact their dreams and aspirations.

Future income may be a blurry picture for some clients. Perhaps their jobs or businesses were impacted in such a profound way that they are scared and confused. Help to shed light on the unknown by examining it. Help clients take a closer look at their cost of living, and what they may do to be sure that their financial plans are on track. This may entail spending less, relocating, or suggesting that their kid’s freshman year in college look a little different than planned.

As of this moment, colleges and universities are still unsure about their plans for the summer and even the fall 2020 sessions. If your client has a child about to enter freshman year, ask them about a less costly option for years one and two. Two years at a junior college or community college will not kill them in the long run,
­and may make the difference that is needed when cash is tight.


Putting plans in place

You can be sure that your clients’ estate documents are current and properly implemented. If there are trusts, review them for issues that may not have been addressed when the drafting took place. These may be clauses about remarriage restrictions or spendthrift provisions
for children.

Health care documents are also front-and-center concerns during a pandemic. Make sure that your clients’ health care directives are less than three-to-five years old, and that the client has submitted them to their primary care physician.

For business owners, help them create a legitimate business continuity and succession plan. They now know firsthand how well their business continuity plan is working and that may propel them to think a little more seriously about implementing a legitimate business succession plan in case they become disabled or unable to return to work for any reason.

Your firm’s business continuity plan is a single document that is updated each year and something that you hope will never come into play. By now you are learning firsthand, with a real-time test of the procedures that you’ve carefully documented. You have some gaps, some strengths, and are probably making real-time adjustments to strengthen the plan.

In fact, due to current circumstances, expect regulators to make the review of your BCP a standard part of their review going forward. Document how your BCP worked and don’t be shy about any deficiencies discovered. Document those deficiencies and adapt your plan to work better in the future.

For the firms that I’ve spoken with, there seem to be some consistencies. One has to do with size. The smaller firms are really struggling. Many of the one-man-band type of sole practitioner practices are still going to their office and pretending that it is business as usual. I’m not sure if that sole practitioner is merely wired that way, or if they have such poor technology that the only way for them to be productive is by going to their paper-induced world as it has been for the past 35 years.

There are reasons why consolidation among CPA firms and financial services firms is so common. Expect this trend to continue and possibly even speed up when the dust eventually settles from COVID-19, and older, smaller practitioners realize that it may be time to upgrade their capabilities by becoming a part of a larger firm. In order to benefit from all of today’s technology, you first have to be willing to invest. Smaller firms are not typically lauded for their terrific technology and ability to work from anywhere.


Meeting apart

For many, this may be the first time that you’ve participated or hosted a video conference. Advanced consultants to the financial services industry have advocated for video meetings for some time now, stating that it is not an honor for clients to sit in hours of traffic just to come to meet you at your office.

Since our office shut down in mid-March, we have started several new client financial planning engagements. All meetings and correspondence have been electronic, with live communications happening via video conferencing or telephone.

It is time to begin regularly scheduled financial planning update meetings. By now you’ve probably had many conversations about markets and portfolios with clients. But I feel that it is time to move on from terror and fear conversations and get down to the basics of financial planning once again.

That means cycling through all of the moving parts of the plan to be sure that nothing has come unglued or changed. I don’t know how you typically do update meetings with clients, but the more advanced firms have a regularly planned service model mapped out so that each moving part of a financial plan is reviewed regularly.

That includes a review of cash flow, risk management, tax planning, investments, retirement plans, estate plans and any special situations in each client’s life.

A financial plan is not a set-it-and-forget-it document or fake leather binder that sits on the shelf. It is a living, breathing process that changes frequently based on facts and circumstances. Situations change, and just like a flight plan, the financial plan needs to be tweaked and updated for reality on a regular basis. If you let all of the initial assumptions sit without review, you may find yourself way off course.

By measuring and reviewing all of the moving parts in more frequent, shorter intervals, adjustments will be easier to make and are likely to have greater long-term benefit than drastic course alterations necessitated by infrequent evaluations.

Stepping up for your staff

There is no question that it is harder to manage and supervise staff when you can’t see them every day. Take this opportunity to become a better manager by becoming a better leader. Talk about expectations, failures and successes, and help map out a plan for growth that keeps your associates engaged.

You spend so much time analyzing and speaking with clients about how to make their lives better: This could be a good time to internalize that discussion and ask associates how to do that for your firm, their job and everyone’s personal life.

Discover the shortcomings in your service model or technology, and engage with your future leaders about what can be done to improve them. Engage them regarding technology, systems, the way everyday tasks are accomplished, and so on.

While we do want to highlight what isn’t working or what can be done better, we don’t want to make this a complaint session. For every matter that comes up as in need of improvement, ask your associate to also present some possible solutions to improve the deficiency. There is nothing like a real-time test to highlight the things you do well and what you can improve upon.

Some things will change forever. At this point, it would be mere speculation to list all of the pieces that may be altered permanently. Once you agree with this, make a commitment to pay attention and see what changes may be appropriate or beneficial for your clients, associates and partners.

This may be a good way to identify your next generation of leaders. Those who want to embrace change and be a part of making it work for everyone are keepers. Consider creating an “agents of change” advisory board, made up of your most engaged associates. They are the ones, especially after this real-time experience, that will be the most creative and become the most valuable as future course-changing events unfold in our rapidly evolving profession and world.

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Coronavirus Practice management Financial planning Wealth management Succession planning Employee engagement
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