Client-Financial Professional Communication During Times of Uncertainty

Leo Maheras |

During times of uncertainty, communicating with your financial professional can be beneficial when life-altering events occur. For some, survival is their only plan when their financial resources continue to deplete. Others are more fortunate, and their finances are holding while they continue to work. But for most, dealing with COVID-19 and the aftermath can create a fog of financial uncertainty.

When it comes to our investments, experiencing market volatility that does not reflect the economic conditions may not make sense to us. How can the markets be up when the economy is down? This situation may create anxiety and lead to poor investment decisions. Here are some thoughts for communicating with your financial professional during this period of uncertainty:

Distancing is healthy and expected. While you may prefer face to face meetings, keeping everyone healthy is critical. Emails, calls, and video conferencing between you and your financial professional should continue. Social distancing may be required for your daily interactions with others.

Resiliency is critical. If you are having financial difficulty, communicate this to your financial professional. While they generally work with you to save and invest for your future, they also want to know if you need to access your investments to meet your financial obligations.

Under the CARES Act, an additional economic relief provision is built-in for COVID-19 hardship distributions. Still in place, investors can access up to $100,000 from their employer retirement savings without penalty if impacted in any of the following ways:

  • An immediate family member or they diagnose with COVID-19.
  • They were not able to work due to a lack of childcare.
  • Their job eliminates, reduces operational hours, lays them off, or they quarantine, resulting in financial duress.
  • Taxes are due on any hardship distribution from a tax-sheltered retirement plan, but no early distribution penalty will apply.

Find the Silver Lining. If you are having a hard time emotionally or financially, talk to someone who can help you find the ‘positive in the negative.’ It always helps to communicate with others when they can identify with what you are going through and help you focus on the positive.

As recovery from this period of uncertainty begins, remember that communicating your needs to your financial professional during the good times and the bad is crucial to your financial independence.


Important Disclosures:

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

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