While this crisis is unique – as most crises tend to be – we’ve gone through others before (9/11, 2008 recession, etc.), and we’ve come through each a bit more educated and experienced than we had been going in. A lesson from this one may be a reminder that unforeseen events can derail an otherwise robust economy, and that investing is not for the faint of heart.
We’ve been reminded that some industries and small businesses can adapt quickly and that others remain extremely vulnerable, even fatally so, to a quick downturn. Yet, I’ve seen more confidence from investors than ever. Investors have seen this movie before and there’s a sentiment that this too shall pass. The panic that we experienced in 2008 hasn’t been present. Now, that may change the longer shutdowns linger, of course. I think we’ll see (for a little while, until time blurs the memories) more focus on building cash reserves and stricter adherence to asset allocations.
We’ve seen how important technology is for interacting with clients and colleagues, and how the talking heads were right about technology being so vital – and not just to millennials! Advisors will want better technology for use in their practices. Technology that enhances remote working for staff, along with the supervision of that work by firms, will be in greater demand. Protection of personally identifiable information will remain of paramount concern when evaluating and using technology.
Brick and mortar offices and transportation may no longer be as important for some firms going forward. At some point, the pendulum will swing back in that direction, but I don’t think we’ll be abandoning our bricks and mortar overnight. People want to get back to some semblance of normal. They want to get outside of their homes. Many will welcome returning to an office environment and interacting with colleagues and friends. They’ll want to go out for a nice meal and conversation in public. But we now know that physical offices are not required to run many businesses; they may still be preferable for a host of reasons, but they’re no longer a necessity, and they’re now an option to be cut when belt-tightening is needed.
For my firm, CoastalOne, I think most of us will go back to the office after this is all said and done. While I recognize the trends around working from home and the many benefits associated with it, there is still something to be gained from having the team in one physical place. There’s a lot of interaction that occurs between team members from various departments and frankly, there’s just something to be said about walking down the hall and talking to somebody one on one that I think can be much more efficient than countless emails or phone calls back and forth.
As CEO, I am also concerned about losing the character of the business by going mostly remote. We have always afforded our employees flexibility, and that will certainly continue, particularly now that we know how well we can function remotely – but it’s not our preferred way to go. Working remotely for this long makes it obvious there are certain interactions that just don’t happen anymore. I go through periods of feeling disconnected from the team and hear that almost everyone feels less connected than prior to the COVID-19 related health restrictions, so I’m very much looking forward to reconnecting on a regular basis in a physical office.
So, what is the new normal for financial advisors and the firms that support them? Firms with a laser-defined focus on technology will thrive (so long as they can afford the investment). Technology that aids the ever-mobilizing advisory practice in becoming more so is the key. Video conferencing in a compliant manner (secure and archivable) with clients able to utilize on any device will be a focus. Web-based systems, not software-based, that can talk and share data with one another through APIs and with clients will be another focus. Single sign-on account access, less paper documents (ergo, no NIGOs), account opening and servicing electronic workflows – these are some of the changes I think we’ll see come into focus in the financial world after the crisis.