By Hardi Swart, Director of Autus Private
I doubt there’s a single person on earth who hasn’t been affected in some way by the events of 2020: the Covid-19 pandemic and the subsequent lockdowns around the world; the market volatility; the travel bans; adjusting to working from home, or adjusting to having no work for months on end…
It’s all quite depressing and sometimes I’m tempted to press the snooze button, turn over and bury my head under the pillow. I’m sure you feel the same way! But then I think of all my remarkable clients and colleagues and how they’ve made the most of some truly horrible situations, and I’m inspired to think differently about the crisis we’re in.
Here are the lessons I’ve learned from those brave people.
Don’t stress about things you can’t control
We are financial planners – we help people make good decisions that will benefit them in the long run. We have no control over the markets, especially what happens in those markets during an unprecedented global pandemic.
However, we can manage our emotions, and we can adjust our advice accordingly regarding budgets and spending habits. We can make sure that our clients’ investment portfolios are properly diversified, and their asset allocation is aligned with their long-term goals.
Look after yourself
Your health is another aspect of your life that you can control. The old saying “health is wealth” rings truer today than ever before. You can’t alter your genes, of course, but you can prevent a range of lifestyle diseases by eating well, exercising and by thinking twice about that extra glass of wine.
Lockdown brought this message home for me. Without having to waste hours in traffic, I finally had the time to take proactive steps to improve my health. Many of my clients did the same. Get healthy now and you’ll be well set for the future: Nobody wants their retirement savings depleted on doctors’ bills.
Create an emergency fund
I have always emphasised the importance of having a suitably stocked emergency fund, but I never thought I’d see the day when so many of my clients needed to access theirs. I hope we all learned from 2020 why it’s critically important to have at least three to six months’ worth of living expenses put away.
Nobody could have predicted Covid-19, and that’s exactly the point. Even if your clients came through the pandemic relatively unscathed, don’t let them deliberate about starting an emergency fund. Get them to start saving now, because the next global crisis might have their name on it.
Stop the doom scrolling
Social media has always been in the business of selling sensationalism, but this was taken to the next level in 2020. Lockdown was an extremely emotional period for all of us, made worse because we were bombarded with fake news on a daily basis. Indeed, so much information online is inflated, taken out of context or entirely fabricated – and it’s becoming harder and harder to tell the difference.
I had a few clients call me after they’d read some or other article about the market on social media. They wanted to sell all their investments and put their money under their mattress! My advice? Identify a trustworthy news source and stick to it. Tune out the noise. Encourage your clients to do the same.
Slow down, pause and reflect
The one good thing about lockdown was having extra time to reflect. The time I got to spend with my family was priceless, as was the time to reconnect with clients and help them re-visit their goals and objectives. Even though we spoke to each other from a distance – on the phone and on Zoom – we had some wonderful conversations about life and values how to ride out this stormy year together.
This has been the greatest lesson for me. As things begin to speed up again and the world slowly returns to normal, remember how powerful it is to pause, how important it is to connect deeply with people, and why you should never take anything for granted again.
This year has been one for the record books, albeit for all the wrong reasons! But with crisis comes opportunity, and it pays to seek out the positive.
All the expertise, products and service to help you to keep your clients focused on the destination.
Momentum Investments is part of Momentum Metropolitan Life Limited, an authorised financial services (FSP6406) and registered credit (NCRCP173) provider.