Two years into the Covid-19 era, financial advisors are seeing an epidemic of a different sort: The U.S. saw a stratospheric increase in at-home drinking between 2019 and 2020. The average cul-de-sac kitchen or den turned into an open bar as people endured extended lockdowns, tended to kids home from school, worked from home, did not work, dealt with parents in assisted living or nursing homes or otherwise suffered social isolation. Those who were just trying to keep everything above water before March 2020 suddenly found themselves drowning.
The arrival of Covid vaccines at the end of 2020 made people hope for a reprieve and a return to business as usual, yet, surprisingly, 2021 private alcohol consumption was on par with that of the year before. What started as a short-term crutch for many people may have turned into a longer-term habit, and financial advisors likely fear their clients’ substance use will turn into substance abuse, something that can be devastating to their financial security.
“My business has doubled,” says Amanda Koplin, the founder of Koplin Consulting in San Antonio, a nationwide concierge mental health treatment and recovery service that connects the clients of financial advisors and other professions to support like in-home therapy and live-in care. “And most everyone I talk to, their business has doubled, too.”
Before the pandemic, Koplin was often a panelist at financial advisor conferences where she educated advisors on how to address the issue of substance abuse with their clients or clients’ family members.
“I think many advisors know when there’s an issue, and that’s why they’d show up to these presentations,” she says. “My goal was to train them to identify the problem and connect their clients to resources. They don’t have to become the therapist or the hero or the savior. They just have to connect their clients to the resources they need.”
Ashley Folkes, a CFP at Bridgeworth Wealth Management in Birmingham, Ala., says that before Covid-19 he was very social with his clients and built deep relationships with them, both inside the office and out in the community. He often bumped into them when he was out and about.
But because of Covid, he says he’s not even seeing them once a year. If he were, he says, he’d more likely spot any signs of alcohol overuse.
“In the past it would happen where clients come in, their faces are red, they’ve put on 15 pounds and are a little shaky. But now we’re at home, and people can cover it up better,” Folkes says. “It’s happened a few times in my career where a spouse has reached out to me and said, ‘He’s struggling with this.’ But Covid seems to have made it worse.
“Addiction doesn’t discriminate,” he continues. “So it doesn’t matter if they’re teachers or nurses or people with $70 million or $80 million in assets. We see it in our industry as a matter of course.”
Catherine Seeber, a vice president at CAPTRUST in Lewes, Del., says she’s seen many advisors completely duck the alcoholism topic with clients. But she thinks addiction should be treated no differently than any other illness. “Specifically now during Covid, advisors should be contacting their clients more frequently anyway,” Seeber says.
The contacts should be more frequent, though for perhaps less time, so the advisors can keep conversations about goals and health going. “But most advisors don’t take advantage of those conversations to talk about addiction because it makes them uncomfortable.”
But as uncomfortable as those talks might be, they’re necessary to the advisor’s work, she says. There’s no reasonable way to talk to clients about trusts, powers of attorney, fiduciary appointments, or even advice on portfolio allocation if there is no understanding of the personal and financial costs of a client’s addiction.
Koplin says advisors likely fear bringing up a client’s alcohol or drug dependency because it might mean losing the client. “My response is, if your client depletes their wealth, you’re going to lose your client,” Koplin says. “If your client dies, you’re going to lose your client. You need to deal with your client’s financial life. How can this not be part of their financial life? If someone were aging, you’d plan for that. Well, you need to plan for this, too.”
The Data Is Mounting
Back in 2014, the U.S. Census Bureau’s “Monthly Retail Trade Report” estimated that total beer, wine and liquor store sales—a reasonable proxy for measuring at-home drinking—tallied around $47.395 billion. That total grew at a fairly steady pace of just under $2 billion per year through 2019, when it reached $56.805 billion.
Then came 2020, the year when Stanley Tucci’s video on how to make a Negroni broke the internet, when Zoom happy hours were bottomless and to-go booze cups kept restaurants alive in cities like New York, which until Covid-19 still held an archaic prohibition against drinking in public.
This was the year when beer, wine and liquor store sales jumped the equivalent of six years into the future, landing at $66.852 billion. And it looks like we’re still going strong. For January and February 2021, sales hit $10 billion, compared with the pre-pandemic $8.5 billion of 2020.