Business Owners Impacted By Market Crash More Than Others
Nearly six months after the onset of the pandemic and the related market crash, many investors believe that their financial well-being is the same as before the occurrence of the economic shutdown. Overall, 58% of investors indicate that their financial well-being is the same as before the pandemic, however, 33% of investors indicate that their overall financial situation is worse or much worse. These feelings differ dramatically by various segments with business owners indicating that their situation is much worse than other occupations. In fact, 62% of business owners indicate their financial well-being is worse or much worse than before the pandemic.
One of the reasons that investors may feel their financial well-being is the same is due to the quick market recovery. Additionally, most investors believe their financial situation will be stronger a year from now than at present, with 42% agreeing or strongly agreeing with that sentiment and only 19% predicting their situation will be worse. Only 25% of business owners, however, agree that their financial situation will be better a year from now. That compares to the more than 40% of information technology, educators and senior corporate executives who are more positive about the future.
What can financial advisors do to assist business owners?
1. Business owners are the most likely to have their personal net worth influenced by the success of their corporation. It may be a good time to reach out to assist in assessing any financial plans in place as well as evaluating and diversifying a client’s portfolio. While these may be difficult conversations, the long-term outcome may be worthwhile.
2. Assuring business owners that their personal assets are properly protected will ease some of the stress of the current economic climate. If there are ways to protect various investments and assets, this may be the time to implement appropriate strategies.
3. Keep investors informed about the economic environment and any changes that may impact their business. Sometimes business owners may be too wrapped up in their day-to-day business needs and are unaware of the larger economic picture.
As the economy continues to recover, financial advisors can be an important sounding board for business owners as they seek to rebuild their businesses after the unexpected economic shutdown.