Podcast: Financial Firms’ Outreach to Clients Amid COVID-19

SIFMA’s Private Client Services Committee recently conducted a survey and released a report assessing how SIFMA member firms are communicating with their financial advisors (FAs) and how, in turn, FAs are communicating with their clients to help them better understand market and economic conditions, and maintain continued connectivity during this period of unprecedented physical, emotional, and financial challenge.

In our latest podcast, SIFMA CEO Ken Bentsen sat down to discuss the findings with our Ken Cella who leads the Edward Jones Client Strategies Group,  Kent Christian,  President of Wells Fargo Advisors Financial Network, and Evamarie Schoenborn, President and CEO of Northwestern Mutual Wealth Management Company.

As these four leaders review the report’s findings, they provide anecdotal evidence and context around the shifting communications and assistance financial advisors are providing to their clients today.

Survey Highlights include:

  • 31 firms comprising more than 100,000 financial advisors participated in the survey. These firms represent a broad cross-section of the industry in terms of firm size, structure and location.
  • Excellent representation across firm size, based on FA headcount (13 greater than 7,500, 7 from 1,000 – 5,000 and 11 under 1,000).
  • All 31 firms noted direct outreach by their FAs to clients.
  • 27 of the 31 firms also noted direct outreach to clients by either the CEO or the head of PCG.
  • Most firms have communicated to clients on multiple occasions with most communication occurring on, at least, a weekly basis.
  • The primary method of communication was via email and social media. These communication methods often included recorded video.
  • 25 firms reported that 75-100 percent of their FAs, and Client Service Associates (CSAs), were working from home. To enhance remote work, firms reported providing their people with some or all of the following: 1) real time IT support, 2) hardware (i.e. laptops or PCs, 3) remote desktop access, and 4) enhanced wi-fi connectivity.


Edited for clarity

Ken Bentsen: Thank you for joining us for this episode of SIFMA’s podcast series. I’m Ken Bentsen, President and CEO of SIFMA. Today we’re here to talk about a recent survey SIFMA’s Private Client Services Committee conducted.

The survey aimed to assess how our member firms are communicating with their financial advisors and how, in turn, financial advisors are communicating with their clients to help them better understand market and economic conditions and maintain continued connectivity with their clients during this period of unprecedented physical, emotional and financial challenges resulting from COVID-19.

To discuss the survey’s findings, I’m pleased to be joined by our board-level Private Client Wealth Management Subcommittee Chair, Ken Cella, who leads the Edward Jones Client Strategies Group; Kent Christian, Co-Chair of SIFMA’s Private Client Services Committee and President of Wells Fargo Advisors Financial Network; and Evamarie Schoenborn, President and CEO of Northwestern Mutual Wealth Management Company and a Private Client Services Committee member.

The emergence of the global pandemic, COVID-19, in the first quarter of 2020 caused severe economic and capital-market shocks. Sharp price declines in equity markets and spikes in volumes clearly illustrated this volatility. U.S. equities closed the first quarter with their worst performance since the 2008 financial crisis.

Amid this volatility, though, markets remained open and functioning as intended. Investors across the board were anxious to understand the short- and long-term impact on their finances and portfolios. Ken Cella, what did the survey tell us about how firms and financial advisors are working to meet this need for information and maintain connectivity with their clients?

Ken Cella: Thanks, Ken. Yeah, before I get into the findings about the survey, I think it’s appropriate to call attention to the important role that our financial advisors play. We know that our financial advisors play a role in serving our clients’ needs, but they perform a critical service in helping investors navigate complex and challenging financial markets like we’ve been through. This is really magnified during times of extreme volatility like we’ve been through in the last 90 days. The implication of this work that they are doing is clients are able to remain focused on their long-term goals.

Individual investors engage with their financial advisors and their firms through a variety of communication methods. The survey really pointed that out. There has been a growing and evolving way that that has been done through updating clients on markets, some their portfolios or holistic financial updates, as well as just helping clients with assuring their wellbeing during these times of volatility.

The survey also pointed out that firms and FAs have built a holistic approach based on trust and regular communication with their clients. Skype, Zoom, podcasts, recorded video — there is a lot of ways that that’s happening that’s new and different, and that’s really been encouraging to see.

Firms and their financial advisors continually emphasize the need to build a culture focused on doing what’s best for clients. That came out loud and clear in the survey: ensuring that trust is at the foundation of every relationship that they have with clients.

These building blocks that we’re finding in the survey create a solid foundation, as firms really had to rapidly pivot and address the current circumstances with all the communication that was necessary to keep clients informed.

The survey also found that a broad and diverse set of communications were essential. Firms have stayed in touch with clients from a variety of touch points. CEOs have reached out. Heads of private-client groups, like the folks on this call today, and, of course, individual financial advisors have really done an amazing job connecting. Email. Social media. There’s a lot of ways that they’re reaching out to clients that are supplements to the one-to-one relationship that’s happening more virtually today. We know a lot of firms are not seeing clients face to face.

I would just say that overall most firms have communicated to clients on multiple occasions in multiple different ways, with multiple stakeholders doing that communication on at least a weekly basis. That’s really what the survey told us.

Ken Bentsen: That’s great, and that’s very interesting. Despite the challenges of the situation, firms and financial advisors were, indeed, well prepared to make sure clients are informed. Evamarie, the survey also took a look at what information was most frequently communicated. Can you talk to us about that? And in particular, what and how is your organization communicating?

Evamarie Schoenborn: Sure, Ken. Northwestern Mutual Wealth Management maybe is the lesser known arm of Northwestern Mutual. Northwestern Mutual has 4.6 million risk clients and 1 million wealth-management clients. And when we thought about the challenge that was in front of us specific to this crisis in COVID, what we thought about was being transparent, authentic and visible. And much of the information in the survey is consistent with that.

Our advisors and their clients were hungry for information on the market with an economic commentary. They needed information for portfolio reviews and outlooks. And then they were reaching out to their clients to really check in on them from a wellbeing perspective. Much of the conversation that our advisors have with their clients is really in that space of authenticity and ensuring that how they’re feeling and being is aligned with their long-term goals.

I’d say that, in addition to those very basic kinds of communications that you’d expect from every wealth-management firm, we actually took it a step further and we did some very visible communication with all of our clients from our senior leadership team.

And there were other things that we’re also doing in support of our advisors and their teams. And so it’s not just one advisor supporting our clients but also advisors and their teams reaching out. And so when I talked to our advisors and their teams, that point in time, that inflection point, resulted in them and their teams spending a significant amount of time on the telephone and Zoom meetings helping to train their clients on how to interact virtually.

A very interesting time, and what our advisors and their teams told me is that what was really interesting about it is that clients had more time to actually have those real, authentic conversations about their goals, about the things that they were worried about, about the insecurity that they felt at that moment in time. So, I think that we learned a lot from ’08-’09, and what is really critical to be a sense of true north for your relationship is to be authentic, transparent and visible.

Ken Bentsen: Thank you for that. Now, communications with clients is, of course, a two-way street. Kent, what did the survey reveal about concerns clients were expressing most often to the FAs?

Kent Christian: Thank you, Ken. Look, firms noted multiple topics that were voiced by their clients, things that were on their mind. But if you boil down the most common, certainly market volatility was at the forefront. It was on the news. It was revealed to them in their statements and in conversations. They were concerned about it, and rightfully so.

Certainly, the state of the economy, both for our country and globally. What does this mean? What does this mean for us, not just in my portfolio and in my own investment plan, but what is this going to mean for my community, for my state and my country? And so it gave us a great opportunity to bring a lot of the rich content that a number of our firms create and utilize with the folks in their economics departments and analysts to really show a lot of the best thought leadership that’s out there. They were very appreciative of that.

Certainly, there was a lot of different flavors, but the simple question of: How am I doing? What does this mean for me? What does this mean for my family, for the plans and goals? We are proud at Wells Fargo Advisors that a clear majority of our clients do have a plan, an envisioned plan that helps them plan for the goals that they have in their lives.

A lot of folks said: “Hey, how am I doing? And how is it working?” That includes, of course, portfolio allocation; performance, although we did not get a lot of questions on performance per se. It was more: “How am I doing?” and, “Am I going to be okay, given the plan that I have?” and, “Should I be thinking about changes to my plan, given all that has happened?”

It was really an opportunity for advisors to demonstrate yet again their huge value that they provide to clients in not only guiding them through times like this but guiding the clients to have that plan and to assure them that they’re still on track. We felt good about that.

A couple of other things I would mention. There was, coincidentally, a lot of interest in the small-business loans through the PPP — tremendous interest, inquiry, a lot of questions. We were learning more about that program, as we all know, on the fly. That was a big topic of conversation for a number of weeks.

They were expressing interest and concern about health and safety issues in general, and how that might impact not only the markets but how that might impact day-to-day life. And so a lot of questions, but also a lot of opinions.

And then finally, I would say it is always gratifying to know that you’re helping a group of clients through something like this. But what was really cool was so many of them made a point to ask financial advisors about their wellbeing: How are you doing? How are you and your team holding up through all this? How is your family? So it really showed a lot of, I would say, two-way care and compassion, and it was really great to see.

Ken Bentsen: Great. Thank you. At the same time as financial advisors and their firms worked to provide all this information, the pandemic presented a host of challenges for the industry — from the need to quickly activate near universal and immediate remote access and the technical needs such a rapid adjustment required to regulatory challenges and the necessary allowances to allow work to continue. The survey also took a look at what impediments firms and their financial advisors faced. Ken, can you tell us what the survey indicated?

Ken Cella: You bet. Everyone tuned in today can certainly relate to the idea that there were many challenges to overcome. Ken, you mentioned that nearly overnight the switch was flipped, and we had to move from working in our offices to working at home. And that just presents new and different kinds of operational challenges.

Firms reported that 75-100 percent of their financial advisors and client-service associates in their home offices transitioned to working from home. Imagine that for a minute. What a tremendous innovation-thinking problem our industry went through. And in many ways, it accelerated some of the technological progress that needed to happen by several years.

Some of the enhancements that came through in the survey on how people began to work more remotely were things like ramping up real-time-technology support. Lots of additional resources and thinking had to go into that. Hardware and hardware upgrades that were required. Remote-desktop access through a variety of different ways, and different ways of connecting. WiFi connectivity was called into question.

And it’s not so much these things individually but the confluence of all of these together, where it just took, as I said, tremendous innovative thinking to accelerate. And I know our firm and, I think, many in the industry report that it really did move them forward.

The most pervasive impediments that firms had to tackle, not surprisingly, included processes that could no longer be done face to face. Now they really required a virtual or a digital platform to accomplish those. Think about wet signatures or hand signatures. Of course, a lot of work was done there that we saw come through in the survey. Notary-public requirements, medallion signatures, and then just manual processing of a variety of different forms of paper that came across their desks: mail, forms, physical checks coming in, and those sorts of things.

This was a place where, I think, it’s notable to just highlight the fact that SIFMA was really able to come through. There was a tremendous effort from SIFMA to really work with a variety of our different regulatory agencies to explain that paper-only processes and tasks just were not really possible anymore in a social-distancing work environment.

And as we all put together our BCP plans, SIFMA came right alongside us and put together the requirements that we needed to bring forward to these regulators to get the relief that we needed. Ken, I’d like to say thank you to the entire SIFMA staff for that work.

Ken Bentsen: Well, thank you for noting that, Ken. And it is a real team effort. SIFMA’s BCP Committee, which consists of a broad cross-section of the industry, takes its role very seriously to be prepared for these types of stress environments. The industry spends an immense amount of time and resources thinking through all sorts of types of disruptions, whether it’s cyber, physical or other threats, and builds plans around these.

The BCP planning that SIFMA does with the industry and public sector, along with other financial services trades, is something that goes back, really, to 9/11, when the government and others wanted the industry to be in a ready state to deal with any type of event.

And in fact, in 2007-2008, the industry conducted a pandemic exercise at the request of the government, which identified a number of common themes and addresses the possibility of the need — well, it certainly identified a number of common themes and actions that were readily available to pull from the shelf and put in action, but also addressed, as you point out, the need for, really, potential regulatory review going forward on things, as you mentioned, around physical securities operations or remote working than has been the norm.

The whole concept of operational resiliency and how we protect clients’ interests as well as our firm’s own personnel while keeping the markets operating efficiently is a critical function that the industry has been focused on. And events like COVID-19, just as prior events going back to 9/11, allow us to learn from our experience and be even better prepared as we go forward.

I want to thank all of you all — Ken, Evamarie, Kent — for joining me today and for the work that your firms are doing for the industry through SIFMA; and all of the FAs for the work that they do on behalf of their clients during these unprecedented times. The stories you hear are really heartening and really underscore, as all three of you have said, the immense value of the financial advisor engaging with their clients.

I would remind our listeners to go to www.sifma.org to see all the industry is doing with respect to COVID-19 as well as our ongoing work to advocate for effective and efficient capital markets. Thank all of you all for listening and have a good day.

Kenneth E. Bentsen, Jr. is president and CEO of SIFMA, the voice of the nation’s securities industry. Ken Cella leads the Edward Jones Client Strategies Group and is SIFMA’s Board-level Private Client/Wealth Management Subcommittee Chair. Kent Christian, Co-Chairs SIFMA’s Private Client Services Committee and is President of Wells Fargo Advisors Financial Network. Evamarie Schoenborn is President and CEO of Northwestern Mutual Wealth Management Company and a Private Client Services Committee member.