Hospitality Housing Horrors
Melissa Joy is a certified financial planner and president ofPearl Planning, an independent advisory group in Dexter,Michigan (near Ann Arbor) and an affiliate of Raymond James.
Early on in the pandemic, she said: “Overall, my clients
have been sticking with the pro-
cess. We haven’t had anybody
liquidate or go to cash. It was a
After a few weeks, though,
Joy started getting phone calls
“about layoffs from clients in the
hospitality industry and with
small businesses. We’re triaging
that,” she said at the time.
Her clients were generally well positioned, “as I’veencouraged everyone to haveemergency reserves. Weworked on that together,” sheexplained earlier this year.
“But one client’s house was
sold, and now she’s buying a new [smaller] home,” Joy added.Both deals were under contract to close in May, but the hotelexecutive was set to be furloughed.
In the end, “We helped to save thishome [purchase]. She really wanted tolive in the new home and has relativesecurity in that she should have thesame job once the hotel’s reopened. But itwas very bad timing for her and the closing,” the advisor said.
“I explained to her, ‘I feel so much empathy for you in thesecircumstances. Let’s get to work and look at the possibilities. “Is there any possibility with the CARES Act that peoplecould be called back [to work at the hotel]? How about talkingthough mortgage options. Could you qualify based on yourassets? As a 40-something-age accumulator, would it be possible for your retirement assets to count?” Joy shared.
The CARES Act provisions allowed individuals to take acertain amount of money out of some retirement plans withoutpenalties, for instance, so the client could at least show thatshe had those funds to lenders. “It’s a lot easier to be actionoriented as financial planners, with the CARES Act at thattime, for instance. We could get to work and figure out how tosave that deal,” the advisor said this past spring.
Joy’s client did get the mortgage she wanted, and the homepurchase went through. “Still, that process was stressful forthe client, who remains out of work but is doing well otherwise,” she explained in mid-September.
Why Planning-Led Advisors Are Better Positioned in a Pandemic
When the stock market plummeted as a result of COVID- 19 andthe economic uncertainty it created, financial advisors saw anuptick in the number of investment-focused clients looking foradvice. After all, the Dow suffering the most severe drop since
1987 was reason enough to drive investors into a state of panic.
However, it wasn’t until a few weeks after this initial shockthat investors began to shift their focus to a financial planningperspective. Throughout the pandemic, the increase in demandfor financial planning has been significant. What is the value ofa comprehensive, planning-led approach, and how are financialadvisors accomplishing this?
Amidst the current pandemic, as Americans struggle withmass furloughs and layoffs, the volatile stock market and theoverwhelming sentiment of uncertainty, it is no surprise thatplanning around finances can be a stressful experience. In fact,a recent eMoney survey found that the majority of people in theU.S. purposely avoid talking about their personal finances.
However, talking about their financial situations and their
plans can help. According to the eMoney COVID- 19 Pulse
Survey, 64% of advisors say they have seen an increased need
to connect with clients about their financial plans. Many pro-
spective clients who initially set out for targeted financial advice
have begun to realize the value of having a comprehensive
financial plan, one that can endure unexpected obstacles, like a
pandemic. As a result, 93% of advisors feel the current environ-
ment has had a positive impact on client relationships.
There is also research that confirms the value of financialplanning. According to the Fidelity 2016 eAdvisor Study, clientswith a financial plan are seven times happier than those without, which suggests the added benefit planning can provideespecially during times of uncertainty. In fact, in the eMoneyCOVID- 19 Pulse Survey, 85% of advisors felt clients with afinancial plan felt more prepared, while 81% felt clients with aplan felt less discomfort and anxiety.
When obstacles, like a global pandemic, become a part of aclient’s financial journey, collaborating with planning-led advisors allows them to navigate challenges more comfortably andeffectively, continuing to move them toward their ultimate goals.
The use of technology in financial planning is not unique to thepandemic, however, its value has become all the more obvious