LESSONS LEARNED FROM COVID-19

these directives occurred and impacted their business models.

By Ryan Pinney, Danny O’Connell, Laurie Adams and Ike Trotter

During the past few months, many agents and advisors have faced a plethora of challenges as they tried to deal with the change and chaos caused by the coronavirus pandemic.

But amid this change and chaos, many have learned some valuable lessons — lessons they are now applying to enhance their financial practices. Here are the lessons some of these advisors shared with us:

(Ryan Pinney, LACP)

The coronavirus pandemic has taught us to be flexible and think ahead. Many carriers weren’t prepared for social distancing and stay-home orders or the speed with which

On the other hand, plenty of advisors and BGAs (including Pinney Insurance) have been working steadily towards a digital-first or digital-only workflow for years. Going digital requires a long lead time, especially if you have employees or a call center.

You have to consider things like remote workspace security, availability and compatibility of equipment, cloud storage, and VPNs. The advisors who planned for economic or environmental disasters are ahead right now because they’ve already figured out how to solve those problems.

In terms of the next potential disruption, now’s the time to start asking questions, such as: keep their businesses running, talk about their retirement accounts, and how to keep their lights on. This, I believe, doesn’t stop at our solutions, but we must remember to educate and guide them in all manners of their affairs.

• What happens if the new normal doesn’t involve traditional offices anymore?

• What if your primary marketing strategy involved a trade show, a convention or in-person seminars?

• What if you never set up an email marketing list or social media profiles because you preferred to do business in-person?

Advisors who are able to make the switch to digital can always settle into a successful hybrid model once things return to normal. But those who aren’t may find themselves unable to compete with the original digital pioneers as well as with the new class of hybrid survivors.

For example, our firm recently shared a webinar done by a CPA and a banker on the SBA loan because our clients’ success is our overall priority.

(Danny O’Connell, MBA, is the CEO of Next Level Insurance Agency in Addison, Texas. He is a past recipient of Advisor Today’s Four Under Forty Award.)

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Impact On Underwriting

Another interesting lesson that’s still playing out is the way carriers are adapting the sales and underwriting processes. On the life insurance side, companies have waived in-person medical exams in favor of streamlined digital underwriting that assesses risk based on records found in databases for prescription drug use, driving history and more.

Companies have also quickly adopted electronic applications, e-signature and electronic policy delivery. Unfortunately, many of the insurance companies are unfamiliar with these processes and uncertain about the longer-term impact on their businesses.

As such, most will pull back on the current easing of requirements and processes once things return to a more normal business environment. The best ones will evaluate these changes, the impact they had, and ultimately, adopt the ones that worked best.

I think this is a good opportunity for the entire industry to modernize and become nimbler, going forward, and I hope it will result in large and lasting improvements for consumers and the life insurance buying process.

(Ryan Pinney, LACP, is president of Pinney Insurance in Roseville, California. He is a member of the NAIFA Board of Trustees and a past recipient of Advisor Today’s Four Under Forty Award.) *****

My most important lesson is the value of setting client expectations, which includes having a tangible plan based on their goals.

— Laurie Adams

(Laurie Adams, CFP, LUTCF, CLU, LACP)

My most important lesson learned during the COVID19 crisis is the value of setting client expectations, which includes having a tangible plan based on their goals. My clients with plans handled the economic uncertainly with considerably more confidence than those without.

The second lesson is that it pays to be prepared to learn. I teach my clients to rely on me as a knowledgeable resource, so keeping up with the shifting landscape in March was like drinking from a fire hose. If I wasn’t communicating directly with clients, I was reading, listening or attending webinars about the market, the economy and legislative responses. I attended four different webinars on the CARES Act alone to be sure I had cutting edge information to help clients. Bottom line: facts calm clients and lead to perspective.

(Laurie Adams, CFP, LUTCF, CLU, LACP, is a Master Agent with Country Financial in Peoria, Illinois.)

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The actions I took this time are similar to what I initiated in 2008. — Ike Trotter

(Ike Trotter)

As advisors, I think we tend to focus on the products and solutions we represent, and we naturally would. However, it is important to remember that we need to look out for our clients’ best interests in every way we can, and COVID-19 has proven this.

While we are lucky to “keep our jobs” during this period of unprecedented change, it is up to us to help our clients

Over my 45-year career, I have witnessed several market pullbacks and recessions. What immediately comes to mind is the great recession of 2008. And for those who remember, the frightening day in October of 1987 when the market dropped 24% in one day is an unforgettable event. I will always remember a few years back when the economic effects of Greece’s shaky economy were being tested in the European Union.

I had taken my family to Florida for a beach getaway and received a call from one of my largest investment clients. The week had been a terrible one for the market due to Greece’s economy, and my client asked me what could be done. Certainly, times like these can cause stress for both me and the people I have the pleasure of serving.

What makes this market pullback so memorable are the pandemic effects of COVID-19 and how they have caused topsy-turvy with not just our economy and financial markets, but with the very fabric of our country’s social structure as well.

The actions I took this time are similar to what I initiated in 2008. My decision was to put all prospecting and sales activity on hold. I made a list of my major accounts, with special attention being given to those who were already retired or who would be retiring over the next five to 10 years.

This action made me call my major clients each week. The primary objective here was not to offer predictions of what the market could or could not be doing. Rather, it was to show empathy for my clients’ concerns and make reasonable changes to their accounts if such actions could possibly help relieve their concerns and provide stability to their holdings

I remember a call from one of my favorite clients who contacted me on a Saturday afternoon. This, in itself, was pretty unique. I suggested we talk the next day and discuss their mutual fund portfolio in detail and review possible means to help reduce the volatility they were seeing with their accounts. We talked over the phone at 10:15 on Psalm Sunday morning.

Going forward, and taking into account that the bulk of my clientele is age 55 or older, I will probably recommend annuity income more for a portion of my client’s retirement holdings. Building a portion of one’s retirement holdings — say 25% to 35% — into a floor of income structured to avoid market volatility can provide needed financial peace of mind about their regular monthly income. It also serves when coupled with social security as a base of monthly income for fixed regular expenses that are due each month.

Additionally, mutual fund holdings that generate retirement income through dividends paid either quarterly or monthly can offer a potential avenue of a more reliable income. Keep in mind, however, that dividends are not guaranteed and can fluctuate. In this situation, it helps to seek out companies or funds that have a good track record.

For those who prefer taking systematic retirement withdrawals from their mutual fund portfolio, I try to recommend that going forward, they create a portfolio matrix that can establish a portion of their monthly withdrawals coming from cash or money market funds. This can offer more security in times of market volatility.

(Ike Trotter is with the Ike Trotter Agency in Greenville, Mississippi.)