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Supporting your clients through challenging times

22 June 2020 Sanlam
Madri Jacobs, Certified Financial Planner at Brilliance BlueStar at Sanlam

Madri Jacobs, Certified Financial Planner at Brilliance BlueStar at Sanlam

The South African Consumer Satisfaction Index (SAcsi) notes that customers’ approaches to their financial planning products and providers are likely to undergo radical change in a post-COVID-19 economy. During these uncertain times, intermediaries have an unprecedented opportunity to deepen client relationships for the long-term. Now is the time that clients need their intermediaries’ advice, expertise and support the most.
Madri Jacobs, Certified Financial Planner at Brilliance BlueStar, Sanlam, notes that the COVID-19 pandemic has brought about various concerns from clients regarding investment performance of retirement funds, market outlook as well as the need to review risk planning and policies. Intermediaries can help to create a holistic, realistic plan to help clients feel in control.

Below, Jacobs highlights ways that intermediaries can assist their clients during challenging times:

1. Ensure your clients reprioritise their expenses

Ensure your client prioritises important expenses such as medical aid, risk cover and other insurance and essential bills that need to be paid.

2. Carefully consider payment holidays

If your client is offered payment holidays, make sure you review the terms and conditions as each situation is unique and would need to be assessed on a case by case basis. It is important to make your client aware that payment holiday arrangements only extend the payment terms and make the debt more expensive; however, this could still be desirable instead of defaulting on payments.

3. Have frank conversations about retirement savings

This is a massive concern for many clients. Paint a holistic picture to help abate panic. And help the person to come up with a plan that feels achievable and reassuring:
• Discuss the impact of Covid-19 on your client’s savings and how it impacts future goals.
• Urge your client to try to preserve their retirement savings if they are retrenched or out of work. It will be very difficult to make up lost savings in future. If it is not possible to preserve the full amount, advise at least preserving a portion of it.
• Suggest clients keep investing in the market at these lower levels for the potential of future growth.


4. Review and update your budget

Now more than ever, your client needs to know what to expect in terms of their cash flow for the coming months to plan accordingly. Advise them to review and update their budget as some expenses may be adjusted, for example, fuel costs if they are working from home during the lockdown.

5. Have an emergency fund and a financial plan in place

Covid-19 has shown the importance of having an emergency fund. Have the conversation with your clients and explain to them how an emergency fund can be the difference between a small bump in your financial life and complete disaster in your entire life. If your clients are financially able to, advise them to establish an emergency fund to cover 3-6 months’ expenses.

Now is also the time to advise your client to look at their financial plan to ensure that their short-, medium- and long-term goals are still aligned. Highlight the importance of including a provision for unexpected events in a plan, especially where it reduces the client’s cash flow and possibly depletes his or her savings.

During these uncertain times, clients need to know that intermediaries have their best interests at heart. “This is also an opportunity to encourage your clients to change bad spending habits if they have any and replace these with good habits to be in a better financial situation post the pandemic,” Jacobs concludes.

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