Two years into the COVID-19 era, financial advisors are on notice that they’re about to be hit with an epidemic of a different sort, and now is the time to prepare.
When the stratospheric increase in at-home drinking between 2019 and 2020 turned the average cul-de-sac kitchen or den into an open bar, the reasons were easily identified: extended lockdowns, kids home from school, working from home, not working at all, parents in assisted living or nursing homes, and social isolation. Many people who were just managing to keep everything above water prior to March 2020 suddenly found themselves drowning.
But surprisingly 2021, a year marked with the relief of vaccination and something of a return to business as usual, might be on a par with last year in terms of private alcohol consumption. What started as a short-term crutch for many people may have turned into a longer-term habit, and financial advisors are finding themselves in the unenviable position of having to wrestle with the knowledge that once substance use turns into substance abuse, the impact on a client’s financial security can be devastating.
“My business has doubled,” said Amanda Koplin, the founder of Koplin Consulting in San Antonio, a nationwide concierge mental health treatment service that works with other professionals—including financial advisors—to connect struggling clients with whatever level of service will help them, from in-home therapy appointments to live-in care. “And most everyone I talk to, their business has doubled, too.”
Prior to 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 with 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 said. “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, Alabama, described his practice as a highly social one, both in the office and out in the community. Prior to COVID-19, he said he was used to bumping into clients often when out and about.
“I pride myself on building deep, caring relationships with my clients. But with Covid, I’m not seeing them once year,” he said. “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.”
After almost two years of spending a lot of time at home, with 24/7 access to alcohol and more privacy than was good for them, potentially more clients would be showing up with signs of overuse, Folkes said, except that very few clients are see him in person now.
“In the past it would happen where clients come in, their faces are red, they’ve put on fifteen pounds and are a little shaky. But now we're at home, and people can cover it up better,” he said. “Addiction doesn't discriminate, 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.”
To Catherine Seeber, vice president and a CFP at CAPTRUST in Lewes, Delaware, and formerly a three-year board member of the Financial Planning Association, servicing clients who are facing the challenge of overuse or addiction should be no different than with any other illness, even though she said she’s seen many an advisor duck the topic with clients completely.
“Specifically now during Covid, advisors should be contacting their clients more frequently anyway. More frequent contact for less amount of time,” she said, in order to 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.”
That level of discomfort will prevent an advisor from performing their job, she said, as there’s no reasonable way to talk about trusts, powers of attorney, fiduciary appointments, or even advise on portfolio allocation if there is no understanding of the personal and financial costs of addiction that might arise for the client.