As the COVID-19 crisis unfolded, financial advisor Jason Beard and his colleagues found themselves in a unique situation, as just a few weeks earlier in February, they transitioned from Stifel to join the B. Riley Wealth Management branch in Devon, Pennsylvania. Despite the timing, Beard and his team have retained approximately 97 percent of their $280 million client base while guiding them through the pandemic.
Read on to learn how Beard and his team are managing one of the rarest challenges the financial community has ever seen.
You and your team moved to B. Riley Wealth Management from another firm in February, just prior to the COVID-19 crisis. What was it like transitioning clients over to a new firm in this type of situation?
We worked non-stop so that when the first Monday came at our new firm, we had already spoken to every single one of our clients. Regardless of the markets, relationships are the true determinant of who will follow you and who will not.
On the first day we arrived, the initial grumblings began. Equity markets had hit their highs on February 19, and we moved to B. Riley Wealth Management on February 21. Shockwaves came during the following few days, but because of the strength of our relationships, almost all our clients moved with us, and here we are.
How are your clients reacting to the dual threat of COVID-19 and the market crash? What are you telling them?
It took a while to get smart enough to realize that we, as financial advisors, should not make market calls. We don't attempt to forecast anything; we don't try and predict who will win elections or how worldwide events or politics will affect markets. The most recent election is an important example. Regardless of who Americans supported, most assumed that one person would be elected over the other and they used that supposition to predict the equity markets. The results served as a reminder for us and our clients that asset allocation is the most important thing. Thus, we try not to overreact when things happen, and we keep our opinions out of it. One constant we know is that we don't know. It's good to have information from the firm and other sources to provide insight, but asset allocation steers our ship.
That said, when the markets were severely down in early March, my clients were remarkably calm. What amazed me was how the markets, their money and their accounts took a backseat to the human element. My clients started asking me how I was and how my family was, and I found it humbling.
When we moved over to B. Riley Wealth Management in February, I see now that the reason we retained 97 percent of our clients was due to the strength of our relationships. I was already inspired by the fact that they came with us through a move, but even more so by their sincere concern for my family.
Amid the pandemic we've been proactive with our clients; reaching out to every single one. Though this differs from the 2008 financial crisis, the calls are somewhat similar. We want them to sleep at night and we remind them that what we've built together over time are solid, long-term plans with sensible asset allocations. They have survived severe market dislocations in the past by sticking to that plan and they will see success in the long term. We apprise them that sometimes doing nothing is doing something; we encourage them to stay invested and make decisions with a clear head.
Of course, every client has a different personality, and as financial advisors we are part advisor and part teacher. It's fine to be nervous and scared; we are living through something unprecedented. Clients also know, however, that the market usually rebounds, and their investments can regain losses or even outperform over time.
I've also learned the value of having a team like the one I have. I don't know how anyone can function in this business without a strong team. Between leveraging talent, time, and varying perspectives, it's invaluable. Having colleagues with whom you can share ideas and collaborate is imperative, and the more hands on deck the better.
What about your business? Are you "maintaining" or are you growing?
We're concentrated on maintaining, as we brought over a book of business from our earlier move, but the consequence of that effort has been growth. Our client focus creates opportunity for new relationships, like introductions to children and grandchildren. While account sizes vary from small to large, what matters most is they are good people. For younger clients just starting out, we are enthusiastic about introducing basic financial concepts and helping them grow their wealth. Multi-generational relationships with families are built that way.
Is there an opportunity to build your book because other brokers are afraid to pick up the phone right now?
The answer is absolutely. You must communicate with clients, especially during tough times. Clients need to know that you are accessible, and our team is bent on comprehensive client support. If you reach out to our office, for example, and we don't pick up right away, you will receive a call back within hours. If a client cannot reach his or her advisor or get them on the phone within 24 hours, she should start looking for a new one. Accessibility is fundamental to this job.
Things are down, but some people are making money. Where do you see opportunity in the market?
Opportunity lies in revisiting or creating a financial plan if you don't already have one. Our team is not going to make a big market or sector call right now. You must stay diversified; we don't know what the future holds. No one saw the black swan of the COVID-19 pandemic or the collapse of oil. Right now, take an opportunity to revisit your current plan and make changes to your asset allocation if necessary.
Do you have any sense of where to invest post-crisis?
I still lean on advising clients to keep a robust asset allocation plan, because that strategy leads to lower overall volatility and better returns over time. Make any changes that are necessary, sure; it's going to be different for everyone based on his or her age and risk profile, but stay invested and stay diversified.
What's been the most useful piece of technology or advice that you could suggest to other advisors who are trying to cope in these circumstances, particularly some technology or business practice that you have discovered or rediscovered during this crisis that you will use in your business going forward?
I use my company resources. So, my advice to advisors is this: read what your firm sends out, attend conference calls, and keep doing what you're doing. Be present for your clients.
How are you helping folks in ways above and beyond what a "traditional" financial advisor would normally do?
There isn't much difference between how we're servicing our clients now as opposed to prior to this dislocation. We're always speaking with clients about alternatives aside from the markets; we make referrals and put them in touch with good people who can assist them. This is what we have always done; it's holistic client care. There's no more or less of that now.
During the past several weeks we have sent flowers to clients to let them know that we are here to keep their spirits up and brighten their days. We've done a few rounds of flowers and anything to make them know we are thinking about them is a great personal touch. It's always appreciated.
How are you handling the challenge of working remotely and managing clients?
As a team, we have always believed in multiple client touch points: calls, emails, market updates and marketing pieces from the firm. In that sense, things are largely the same because we talk to our clients as much as we normally would, regardless of whether times are good or bad. There haven't been too many challenges for us. We keep a continuous open dialogue with them, no matter the circumstances.
If anything has been challenging for us, it's been working from home. At our prior firm, people called me and my colleagues "the furniture" because we were always in the office. We don't play golf; we go to work in the morning, and we stay until the day is over. Though we always had the capability, we never worked from home until now because we enjoyed being in the office every day.
Has video conferencing been an effective tool for you?
Video conferencing is always an option for our clients, and we would do it in a heartbeat if a client expressed the desire, but up to this point we haven't used it - we're accustomed to talking to our clients on the phone. We meet them in person whenever we can in our offices, but with clients in other states, the phone is a normal tactic for us. There is nothing that cannot be accomplished over the phone, so we have always taken that approach. At the end of the day, we're making the dials and that's what matters.
How do you maintain a sense of normalcy personally and professionally?
Establishing a routine is important. Professionally, the work sequence is now longer. I find that I boot up my computer a couple hours earlier than normal and shut it down a few hours later than normal, which is a new pattern for me. On a personal level, things have been great because my kids are always home, and we sit down for family dinners every night. Of course, I try and stick to the same exercise schedule. Regardless, I've found out that I can work from home and be successful. While things are largely the same, the difference for me is the extended day because I want to make sure I'm doing the appropriate due diligence for my clients.
What will you take with you post COVID-19 to help you grow your business and deepen your client relationships?
Lately, I've been reminding my clients how important it is to have three to six months of living expenses, in cash. The reality is that no one saw this coming. Moving forward, this will be an absolute starter when I speak with clients. Jobs that we believe to be secure (e.g. jobs in dentistry, law or medicine) are no longer guaranteed in this environment. People are seeing the necessity of three to six months of liquidity now.
On a personal level, as a family we're dealing with financial and medical aspects of the pandemic. My wife is a nurse, so we must follow the prescribed protocols closely and take extra precautions. I always maintain professionalism, but this is a little different, and clients understand that I'm working from home with someone serving on the front lines. This crisis has strengthened my client relationships.