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5 Ways Financial Advisors Can Deliver Value in The Face Of 2020's Challenges

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2020 has been an eventful year so far. With the pandemic, political unrest, nationwide protests, etc., many people have suffered economically. Businesses have had to shut down, people are living on unemployment benefits, and the markets are showing a declining trend. The challenges have been plenty, and the panic is even higher. However, there are still ways in which you can turn your portfolio’s fate around. And a financial advisor can help you in this regard.

Here are some ways in which financial advisors can deliver value in the face of 2020’s challenges:

  1. Understanding and revising the financial plan
  2. The times have changed so drastically that it now seems impossible to go on with older plans. With a drop in income and investment returns, you may find it hard to continue saving and investing. However, not continuing to save can result in insufficient savings in the future. If you are nearing retirement, you may have to work a few additional years to make up for this year’s losses. Even if you have enough savings, you may still need a new plan to ensure that you use these savings rationally, given the fact that the economic unrest of the pandemic will likely last for a few years. A financial advisor can help you strategize better.


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  3. Making budgetary changes
  4. Most households have had to cut back on some expenses to accommodate the financial volatility of 2020. These budgetary cuts can differ for each family, depending on the number of earning members, dependents, their individual needs etc. For instance, for a family of two working parents and a pre-teen child, budgetary cuts may not be as drastic, even if one of the parents has received a salary cut in 2020. However, a family of one working parent with a child ready for college in the near future is likely going to make bigger adjustments to their budget. A financial advisor can advise you on the suitable level of changes required for your individual needs and family’s requirements.

  5. Considering Roth conversions
  6. Many people have been considering to make a Roth conversion in 2020. Generally, a Roth conversion is considered the most beneficial when the market is in a downturn, such as right now. A financial advisor can guide you in this decision. A Roth conversion can be carried out in different ways. For instance, if you pick the Roth conversion cost averaging method, you can evenly spread out the conversion over small payments through the year, instead of a big conversion at one time. You can also choose the 60-day rollover method, but this involves comparatively more risk. These options can be analyzed better by a professional financial advisor, and can then be taken up depending on your personal preferences, suitability, requirements, and risk appetite.

  7. Using the emergency fund
  8. The financial obstacles posed in 2020 has forced several people to use their emergency funds. While an emergency fund remains a viable resource of money, especially in such times, you should keep in mind that it is a limited pool of funds. The pandemic, on the other hand, is turning out to be a lengthy and arduous battle. The next step after your emergency fund dries up is not something that a lot of people have given much thought to. A financial advisor can help you understand other sources of money in the absence of an emergency corpus. There are several options available, such as a security-based loan or a loan against your employer-sponsored retirement plan. You can evaluate these and pick the one suitable for you, based on the advice of an expert.

  9. Letting go of some payments
  10. It is a financial advisor’s job to find ways for you to cut your expenses. For instance, some states are offering relaxation on mortgage payments because of nation-wide income cuts. Some credit card companies have also offered extended timelines for paying back bills. Additionally, the rate of interest for federal student loans has been waived off for some time. These special provisions are being offered in many states to ease matters for people. A financial advisor can help you identify these cost savings opportunities so that you can concentrate on essential expenses for the time being.

  11. Updating estate planning documents
  12. The increasing unpredictability of 2020 has brought about the need to update or remake estate plans and health care directives. There are many provisions of an estate plan that can require professional assistance, such as drafting a comprehensive will, setting up a trust, drawing directives and power of attorneys. The relevance and applicability of each of these things may not seem evident to you, but a financial advisor can help you decide the things you need. Estate plans are crucial if you want to safeguard your family’s future. Even minor lapses can sometimes end up in probates, causing disagreements and feuds amongst family members.

To sum it up

2020 has been largely unpleasant for most people in all aspects. The implications of the year are also likely to last for a long time and alter the course of the coming years. However, getting on board a wholesome plan with the help of an experienced professional can ease the journey. If you are struggling to cope with the financial after-effects of 2020, you can get in touch with Financial Advisors and secure yourself and your loved ones from further adversities.

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The blog articles on this website are provided for general educational and informational purposes only, and no content included is intended to be used as financial or legal advice.
A professional financial advisor should be consulted prior to making any investment decisions. Each person's financial situation is unique, and your advisor would be able to provide you with the financial information and advice related to your financial situation.