Airline industry clients who’ve been “greatly impacted” byCOVID- 19 include “those who are looking at the end of theircareer,” along with “those who are at the beginning of theircareer,” but then there’s also everybody in between, according toJeffrey Baumert, president of Retirement Advisors of America,which has offices in the Dallas, Atlanta and Seattle areas.
The big dilemma for RAA clients nearing the end of their
careers has been whether they should accept early retirement
packages being offered by the airlines they work for or not,
according to Baumert. They’ve had to figure out if these “early-
out packages make sense for them or not,” depending on their
specific circumstances, financial and otherwise, he said, which
his firm’s advisors are helping them figure out. Adding com-
plexity to the situation is that “each airline’s early-out package
is slightly different.”
On the other hand, there are many younger pilots who’ve
been working for an airline for five years or less, and some of
them “are looking at being out on the street” potentially if they
lose their jobs, Baumert said. Meanwhile, just about everybody
was hurt by the reductions in pay across the sector due to
reduced flights and hours, he shared.
Baumert pointed to two RAA clients in their early 30s who
are “on the bottom of the seniority list for one of the major air-
lines” and are concerned they may be furloughed. They called
RAA to “talk to one of our folks,
who actually is an airline pilot who
had been through a furlough him-
self” and was formerly in the military.
This advisor is “providing some coaching for them” on bud-
geting and more, and also has convinced them not to make any
of the “classic mistakes” that many investors make in times of
distress, like panicking and cashing out their 401(k)s.
One client is a married pilot with kids, who was in the
military full time and now is a
member of the U.S. Air Force
Reserve. He may be able to fall
back on the military for income
if he ends up losing his job.
The other client is a sin-
gle pilot who does not have
that option, Baumert said.
However, “we’re working
with him to help him find
some other contacts” in the
airline industry or a related
sector who may be able to
help him find flying work if
he gets furloughed.
as a result. Over the past decade, in particular, the rise of fintech has revolutionized the wealth management industry invarious ways, all of which are especially potent during theseunprecedented times. In fact, many clients have started tochoose advisors based on how effectively they are integratingthese technologies to provide a more collaborative and customized planning experience.
Planning-led advisors are able to leverage fintech applicationsand software to get a 360-degree view of their clients’ assetsand advise them with a comprehensive set of knowledge oftheir finances (not just their investment goals). To help evaluate a client’s probability of financial success, advisors can use asophisticated, cash-flow based simulation engine with built-intax projections and Monte Carlo simulations.
These offerings help clients and advisors work together toplan for the unexpected. Advisors also are able to create different scenarios by adjusting factors both inside and outside of aclient’s control. Factors inside a client’s control include retirement age, retirement spending, public or private college funding. Scenarios outside a client’s control include a pandemic, butalso things like premature death of a spouse, change in SocialSecurity assumptions or an increase in taxes.
Also, digital tools connect client accounts to create onecentralized resource for 24/7 access to all their financialinformation from any device. Advisors have access to digitalmarketing solutions as well to create new client relationships,stay connected and strengthen existing relationships, and differentiate their value proposition to prospective clients in needof help.
Perhaps the most crucial in these unprecedented times, digital solutions enable advisors to meet virtually in a private andsafe environment. According to the eMoney COVID- 19 PulseSurvey, 69% of advisors have seen an increase in virtual clientpresentations. The same things that take place during an in-person meeting can now happen completely remotely, a trendthat will certainly stick around post-pandemic.
There are many lessons to be learned from the global pandemic that can be applied to planning for the future, especiallythose focused on incorporating the right digital tools into thefinancial planning experience. As we imagine life post-COV-ID- 19, advisors will keep these learnings top of mind, as theywill play a crucial role in enhancing their services to supportclients as they plan for the unexpected. —Matt Schulte, CFP,Head of Financial Planning, eMoney Advisor