Blog: Let Me Hear (From) You


We live in dramatic times. Thanks in great part to a dysfunctional U.S. Congress, and amplified by a non-traditional U.S. President with an eye and ear toward making news, our every day seems to require a status update in regards to national events, both social and economic.

U.S. relations with Mexico and most of Europe have changed since President Donald Trump took office in January. Relationships with North Korea have turned from impractical to dangerous. 

Add to that the recent run of natural disasters, from Hurricanes Harvey and Irma to the unprecedented swath of wildfires on the west coast of the United States.

All of these news-making topics, whether they be natural or man-made, should prompt conversations between affluent investors and their financial advisors. Whether it is the investor making the call or the advisor making contact, all of the headlines that pop up on our electronic newsfeeds or scream at us in our daily newsprint should be cause for a discussion of how they affect an investment portfolio.

According to a story from Investment News, advisors who work in Florida and Texas have weather emergency contingency plans, in which they contact investors with advice on protecting major financial documents and physical property. Through group text messaging, advisors tell investors to photograph and electronically file key documents to cloud-based systems, and to photograph all replaceable and valuable physical property such as furniture before packing up and evacuating the home. 

Now, more than ever (excluding economic recessions, perhaps). investors need to know how their finances are affected by the peculiar set of circumstances that keep CNN and Fox News occupied all day long. Even when times are (semi) normal, investors want to hear from their advisors frequently and proactively. With the way events are taking place these days, advisors would not be remiss if they called every investor on their client list every single day.

According to our research, one of the more plausible reasons an investor would drop an advisor is if the advisor is not proactive in calling about factors which could impact portfolios, or when advisors fail to return calls in an expected timeframe. In Advisor Relationships and Changing Advice Requirements, 71 percent of Ultra High Net Worth investors with a net worth over $5 million say “not returning phone calls in a timely manner” is a reason to change advisors, and 53 percent said “not being proactive in contacting me” was a reason to do so.

Considering the fluid nature of world events these days, the significance of those communication factors could become heightened as investors wonder whether they are properly invested for financial and economic chaos, today and in the near future.    

Advisors will quickly discern which investors do not want constant updates on current events. They will also discern which investors recognize the opportunity to benefit from the topsy-turvy status of current events. 

Over the last couple of weeks, we have discussed the need to keep investors updated on the legislative battles over the national debt and tax reform. The national debt topic is on the immediate calendar for legislators (and hit the headlines again last week), while the tax reform issue may not be resolved for months. But both of them could bring significant upheaval to an investor’s portfolio, and advisors would be wise to keep investors updated on how those conversations in Congress could impact investment decisions both present and future.

The natural disasters of Harvey and Irma are another, albeit different, example. Certain businesses and industries are dramatically affected in events such as these; the oil and gas industry is likely going to need months to recover, although the supply and demand balance could end up being beneficial financially for companies involved. Investors heavily invested in industries dealing with coastal conflicts need to know whether they need to increase or decrease their exposure as a result.

Similarly, Houston and South Florida are going to need to be rebuilt. While both areas need to beware of nefarious sorts trying to take advantage of homeowners in need, there are legitimate companies involved in home building and construction that will have an opportunity to take part in the recovery efforts in those areas.

If, as some people suggest, natural weather events are on the upswing, is there something going on with the insurance industry that could impact investors? If the question can be asked, there are investors who are asking those questions, just as there are investors who do not know they should be asking.

These are fluid times we live in. Standard behaviors no longer seem to be the norm. The environment for investments and financial maneuvers is in flux as well. Advisors need to be more vigilant than ever on their communication with clients about how all of this turmoil affects their investment plans.