What financial planning lessons can individuals take from the pandemic?

Unfortunately, no one can predict the future. The best we can do is prepare for any situation.

Evaluate how much emergency cash will help you survive an economic downturn. Having a trusted adviser is crucial for both business and personal finances. In the past, it was normal to have your business and personal relationships at separate institutions. Today, my most satisfied clients are ones with whom I have a full relationship. I make suggestions to them knowing every aspect of their life.

A good adviser will not try to sell you something but rather will put your interests first and present you with options. He or she should address what’s important to you and help you through any situation, including current needs, future needs and your legacy. Finally, a good financial adviser will tell you that the best time to put things in place is before you need them. This could not have been truer during this pandemic. Clients have thanked me for having a line of credit in place for their businesses as well as their personal needs to help them through the crisis.

Discussions of estate planning, business planning and preparing for the inevitable are often pushed to the side. Don’t let situations that you can’t control impact your future. Take charge of your financial well-being by speaking with your trusted adviser. If it’s been a while, establish or reestablish that relationship.

—shelley heidrich
vice president and area manager
first bank

It is a common human trait to alter course when faced with emotionally charged events such as the current pandemic. Behavioral economists have written at length about the biases people exhibit in these moments, which lead to poor decision-making and adverse outcomes. More than ever, it is critical to reflect on why you set in place the plan you are currently following. If the long-term reasons are still intact, making significant changes now may be a poor choice.

Markets always have been and always will be volatile. Adding exogenous events like COVID-19 only exacerbates the situation. Do not let the current volatility lead you to altering well-thought-out plans. Ask yourself not what the world will look like in six months or even a year, but rather in several years or longer. Despite interim instability, if you believe the economy and market will survive current challenges, then modest tweaks to your financial situation are far more appropriate than wholesale changes.

For those individuals and families that have not developed a well-structured and thorough plan for the management of their wealth, now is certainly a good time to reflect on the value of doing so. A long-term plan constructed with forethought, analysis and the experience of a knowledgeable professional, can make significant differences in your financial life 10, 20 or more years from now. As the saying goes, the best time to plant a tree was 20 years ago; the next best time is today!

—brian yost
managing director
alpine private capital