In a recent survey by the Certified Financial Planner Board of Standards Inc., about a quarter of financial advisors reported that the pandemic has caused clients to lean on them as therapists.
That could become the new normal, said Anna Rappaport, a fellow of the Society of Actuaries. She also believes that advisors who do more to help clients solve problems will probably do better.
Rappaport, who recently co-authored the “Impact of Covid-19 on Retirement Risks" report, noted that many advisors say they are spending more time with people who need emotional support and confidence.
She posited that Covid-19 has affected so many different areas of peoples’ lives that advisors have their hands full engaging with clients across a range of issues including investments, retirement planning and family issues. She added that the pandemic makes people think about a wider range of risks and how these risks interact with their retirement.
Rappaport said Covid-19 could either pose an opportunity for advisors to become heroes or pose a threat if clients feel they are not getting the help they need.
She noted that when the Society of Actuaries began its post-retirement research program more than 20 years ago the focus was mainly on money. But the organization subsequently realized the topic was much bigger than that. If you just focus on money, she said, you are not properly looking at the picture.
Rappaport pointed out that Covid-19 has raised many questions for retirement planning. Among them are the challenges surrounding the affordability of housing and the need to make appropriate housing decisions in retirement—these being especially important because housing is the biggest expense for retirees and the biggest asset for many of them, she said.
She added that financial advisors should be able to help clients with questions regarding where they should live, whether they should pay off their mortgage or take a reverse mortgage, or whether they should downsize.
Rappaport said her organization’s research found that many people do not focus much on family in their retirement planning because they do not want to be a burden on their adult children. Yet family members often play a role in taking care of their loved ones when they get older and need assistance.
“It would be better if people took this more into account,” she said.