Coronacrash Advisor Insights: Strongbox Wealth’s Chuck Cooper & Tony Sirianni
AdvisorHub’s Publisher & CEO — Tony Sirianni — asked top advisors from leading firms their opinions on the dual management of the Coronavirus and market meltdown crises. Read how these advisors are managing one of the most unique challenges we have faced as a financial community.
Here is how Chuck Cooper, Advisor & Managing Partner of Strongbox Wealth responded.
- So we’re in a new and challenging dynamic, where not only do our clients need us more than ever, but we have to change the tried and true way that we have always interacted with them. How are you handling the challenge of working remotely and managing clients? Is video conferencing effective? How do you maintain a sense of normalcy personally and professionally?
From a pure timing perspective, we significantly changed the way we communicate with clients in late August 2019 because we launched our RIA after being with a national broker dealer for over 20 years. Fresh off a 90%+ client conversion rate after just 4 months, we were feeling good and settled by the onset of this health crisis. Our client communications were beginning to pivot to the delivery of our reporting and planning vendors within our technology stack. Add the market volatility to this circumstance and it made for a very captive clientele.
I’m thankful for our ability to efficiently communicate with clients in timely and better ways. We’ve leveraged social media for sure. Most important, being able to craft and deliver original market related or economic commentary to clients in near real time has been critical and well received. Many of our out of town clients were already accustomed to Zoom screen sharing portfolio reviews. With stay at home orders affecting near everyone, our video communication has simply expanded to include our in-town client base. Our Operations Director is working remote and forwarding office calls to us as needed. Maintaining a sense of normalcy must be a deliberate choice given the systemic disorder otherwise. I have consciously found optimistic perspective and ensure productivity by compartmentalizing the extra workload into single attention blocks.
- People who have never done this job don’t really understand how much psychiatry we do every day — how close we have to get to our clients to get them to tell us about their hopes and dreams and plans, nor do they realize how closely the physical fears of coronavirus and the all too real fear of financial ruin are so closely related. How are your clients reacting to the dual threat of Covid-19 and the market crash? What are you telling them?
This is a profound question because it speaks directly to the intimacy of our duty as advisors. Delivering financial advice may be difficult when the chips are down, but that’s obviously when our clients need us most. We shouldn’t confuse our big smart advisor brains with a bull market, as much as we sure cannot preempt a global pandemic’s effect of heavily weighing down client portfolio valuations. Instead, we need to recognize the moment that now is our time to prove value, galvanize relationships, recommit our clients to their long-term financial plans, and remind them that this is what market risk will occasionally look and feel like.
We’ve been discussing with our clients the necessity for “psychological resilience”. In other words, the initial shock of this COIVD-19 event will abate, but portfolio and economic impairment will likely last much longer than the biological threat. We are very candid in our views that the fallout from this pandemic will have long lasting consequences and it will be imperative to patiently hold ourselves accountable to the plan. This directly speaks to how we respond to adversity. We believe the proactive action of succumbing to fear by greatly altering one’s asset allocation is likely a negative (flight) reaction. We prefer instead to advise on more certain proactive positive (fight) reactions. For instance, life gave us lemons with this virus, so let’s make lemonade through a partial traditional IRA conversion to Roth, then offset that realized taxable income through a tax deductible contribution of appreciated stock (or cash) from non-IRA assets to a donor advised fund. What do you know…we just tax-efficiently funded two tax-free accounts to improve the tax character of our retirement income and benefit our favorite values based organizations. Both measures ultimately improve the efficiency of how we sequence our long-term cash flows. Near all people don’t need to be talked off a ledge during these times. Instead, most just want to isolate an opportunity and feel a little action has been taken for their long-term best interests.
- What about your business? Are you just “maintaining” or are you growing? Is there an opportunity to build your book because other brokers are afraid to pick up the phone right now? How do you prospect without traditional client interactions during a market climate like this?
Beyond maintaining, business is strong. We are opening new relationships primarily through referrals. We run a planning based advisory practice grounded in customized portfolios aligned to individual client objectives. Each client has at one time or another been bored with our reminders to expect risk to show itself and when, not if, we’ll experience severe downturns along the way. Now that this decline is upon us, existing clients are calm in understanding their investment returns were never intended to be a linear equation. Having those advance expectations means clients are eager to share our name and their poised perspective with otherwise worried friends or co-workers. For us, prospecting has been interestingly productive because we have a handful of “busy” former clients who had yet to transfer from our prior firm. With investment portfolios now top of mind and being detached from us as their chosen financial advisor, those folks have become hastened to transfer their assets back to our care.