Discounts, remote work and charitable gifts: How wealth managers adapt to coronavirus

May 1, 2020 5:06 PM

Faced with the coronavirus and an economy tipping into a recession, financial advisors have their work cut out for them.

“This pandemic has exposed the cracks in infrastructure across the board,” says Cameo Roberson, a business coach and founder of Atlas Park Consulting & Finance. “Now, for advisors, it's really an opportunity to figure out what their best operational plan is going forward that is location-independent. … The advisors who are able to pivot, understand that, and start building the right systems to support it will be able to weather the storm.”

Advisors and their firms are responding to the pandemic in a variety of ways.

CORONAVIRUS IMPACT: ADDITIONAL COVERAGE

Companies of all sizes have been offering free or discounted services and additional support for their employees, sometimes in the form of stipends. They’ve also been adding to resources centers and making charitable donations to those who need it most, such as a Children's Wisconsin hospital in Milwaukee. Regulators, meanwhile, have raced to appoint task forces to ensure advisors, firms and investors know the right points of contact with the most updated information.

Scroll through to see how wealth managers and other industry players are responding to the coronavirus crisis. To see our previous roundup of the industry’s responses click here.

TD Ameritrade TDAI woman Bloomberg April 22, 2019

A pedestrian passes in front of a TD Ameritrade Holding Corp. location in downtown Chicago, Illinois, U.S., on Thursday, Oct. 19, 2017. TD Ameritrade Holding Corp. is scheduled to release earnings figures on October 24. Photographer: Christopher Dilts/Bloomberg

Christopher Dilts/Bloomberg

TD Ameritrade

TD Ameritrade gave its employees a $1,000 stipend on April 3 to help them cover costs tied to working remotely, including technology and daycare, according to the company. The funds went to all full-time and part-time employees at the director level and below, including temporary employees and interns.

Northwestern Mutual

After making an initial donation of $1.5 million to nonprofits in order to assist with their COVID-19 response, the company’s charitable foundation gave another gift of more than $200,000 to Children's Wisconsin hospital in Milwaukee. The money will go toward essential personal protective equipment such as replacement lenses for Controlled Air Purifying Respirators. Northwestern is also supporting a partnership between local arts organizations to sew masks, gowns and face shields. As part of the donations, the firm is also matching all gifts under the “NM Peloton 30 for 30” program started by advisors Mark Kull, Al Schor and Ben Feldman to benefit families battling childhood cancer during the pandemic. The advisors raised more than $30,000 in the first two weeks of their 30 days of exercise on behalf of the Alex's Lemonade Stand Foundation.

Nationwide survey

About 25% of Americans say they’re seeking a financial advisor’s services for the first time ever due to the pandemic, according to a Harris Poll survey of more than 2,000 adults conducted in early April on behalf of Nationwide. About half said the coronavirus drove home the need for annuities or a way to protect their retirement income, while more than half said it made them recognize the necessity of life insurance.

Addepar

Between April 1 and June 30, the data aggregation, analytics and reporting software firm is offering credit worth up to 50% of the cost of a new Addepar license to use its services. The credit will apply for 18 months, or until an advisor’s practice reaches a benchmark of its choice from three options: AUM recovers to its 2019 level, the S&P 500 index stays over 2850 for 30 days or the CBOE volatility index remains below 25 for 30 days. “We've benefited from a strong trajectory of growth over the past decade and want to take the opportunity to reinvest in RIAs, and in turn their clients, when they need it most," Addepar Chief Revenue Officer David Lessing said in a statement.

Twenty Over Ten

The digital marketing firm for financial advisors offered its content library free for 30 days. The firm also cut the monthly fee for its lead service by 50% for new users’ first year, according to Samantha Russell, Twenty Over Ten’s head of sales and marketing. After the firm’s special in-house coronavirus content team began releasing three to four new pieces of content for advisors to use in emails, social media and other forms of communication, FAs have deployed them at least 2,000 times. The firm is giving out free content because “many advisors have reported that their biggest challenge right now is communicating quickly and providing timely, relevant information to clients online,” Russell said.

One Team Financial

In a letter to the firm’s 28 employees, co-founder David Buckwald pledged that the Cranford, New Jersey-based practice wouldn’t lay off anyone in 2020. Buckwald and partners Andrew Serzan and Greg Dillon wanted “to reach out to them and let them know that our team is here, our team will always be here to take care of you and your families,” he told NJ.com. “We honor those commitments and we take them very, very seriously.”

Kestra Financial

The Austin, Texas-based IBD opened a devoted section for coronavirus content in its digital workstation, AdvisorComplete, according to Head of Marketing Amy Gordona. The resources span four main categories: capital markets, the CARES Act, practice management and lifestyle. Kestra also created new virtual events so advisors can share best practices and receive the latest information.

Practical Perspectives report

Among more than 300 different sources of value-add support during the coronavirus, advisors gave First Trust, American Funds, JPMorgan Chase, BlackRock, their broker-dealer, CNBC, Morgningstar and The Wall Street Journal the highest marks, according to a according to a recent survey by the consulting and research firm Practical Perspectives. The firm says it made the proprietary research report publicly available on its website as a service to the industry.

Nearly two-thirds of advisors say there has been little or no disruption to client services during the spread of the coronavirus, according to the survey of more than 525 advisors conducted in early April. At least 83% made minor or no changes at all to their portfolio management approach.

FPA

More than 300 CFPs who are also members of FPA have volunteered to provide a 20% discount on their first-year planning fee for some 35,000 individuals certified by the Board of Certified Safety Professionals. The environmental, health and construction safety personnel can search the FPA’s designated directory to find planners offering the discount.

NASAA

NASAA, a state regulators association, started a task force to identify potential coronavirus investment fraud cases. A recent spike in 200,000 web domain names related to the pandemic, the vast majority apparently created in the past three months, will be one of its first items of business, according to NASAA. The targets of its online probe span any websites or social media posts “offering or promoting fraudulent offerings, investment frauds, and unregistered regulated activities” relating to COVID-19, NASAA says.

Lincoln Financial Group

In addition to making $1 million in charitable gifts, the insurer and broker-dealer teamed up with Accenture, ServiceNow and Verizon on a program the firms call “People+Work Connect.” The employer-to-employer service connects companies that have laid off or furloughed workers with those who are hiring. Lincoln has already posted more than 100 openings there. On the insurance and group benefits side of its business, it’s also making temporary adjustments to premiums in an effort to help those impacted by the virus.

eMoney Advisor

To encourage more advisors to help clients with their financial plans during the economic crisis, Fidelity’s fintech subsidiary, eMoney Advisor, is giving away three months of access to its financial planning software. The firm is also coaching planners on how to better serve clients during the coronavirus pandemic via webinars and blog posts. Advisors who already use eMoney can also get temporary free access to its digital marketing products.

Schwab Charitable

Donor-advised fund grants through Charles Schwab’s charitable arm soared by 40% year-over-year between mid-February and the beginning of April, according to the company. Clients have made at least 8,800 grants to some 3,000 charities. Schwab Charitable also launched a website listing potential recipient organizations and other resources for giving through its donor-advised fund platform.

Cambridge Investment Research

The 27 college students who qualified for the IBD’s paid summer internship program, The Next Step, will work entirely remote this year. But as in the past, they’ll each have their own professional mentor, supervisor, and executive champion. About 30% of the college students who complete an internship with Fairfield, Iowa-based Cambridge later return as full-time employees, according to the firm.

HiddenLevers

The developer of risk analytics, economic research and other wealth management software rolled out tools designed to display “good, bad and ugly versions” of the impact to client cash flows based on the pandemic and other unforeseen events. Other new features on its software help advisors and clients build out goals in their modeling, compare assets to liabilities and look into estate plans.

The Securities and Exchange Commission flag flies in front of a building.

Dozens of municipal bond market participants filed letters to the SEC warning of damaging consequences from a new data disclosure law.

Bloomberg News

SEC

The regulator launched a temporary cross-divisional group to monitor the virus’ impact on markets, issuers and investors. The group will also respond to requests for information and assistance from other regulators and partners.

Securian Financial

After the CARES act enabled people younger than 60 who meet certain criteria to withdraw up to $100,000 from their 401(k) accounts without the 10% penalty, Securian waived all its hardship and other distribution fees. It also tacked on ERISA fiduciary services for all participant distributions and loans to all its 401(k) accounts at no additional charge. Participants can tap into financial and grief counseling, legal documentation, and educational services through Securian under the program.

LIMRA’s Consumer Sentiment Survey

Only a quarter of Americans have a favorable view of the economy, down from 56% in January and the lowest share collected in LIMRA’s Consumer Sentiment Survey in more than six years. In a poll of 3,000 people conducted March 25-26, LIMRA found that 44% are very or extremely concerned about their household’s short-term financial security, 45% are very or extremely concerned about their access to medical care and 49% are very or extremely concerned about their long-term finances. They reported worries or anxiety in even larger numbers about three other topics: The overall economic impact of the coronavirus (71%), the healthcare system’s preparedness (66%) and the federal government’s ability to manage the crisis (63%).

Bloomberg News

Remote shareholder meetings and conferences

To comply with regulatory and health organization guidance, many wealth management firms have moved their annual shareholder meetings online. Ameriprise Financial, LPL Financial, Wells Fargo and Charles Schwab are among those going digital.

Schwab is also turning its 2020 Impact conference into a fully virtual event to take place Nov. 10-13. LPL is moving its annual Focus conference for advisors to a remote event in the third quarter.

Advisor Group

The IBD network launched a new Crisis Advisory Council to gather input from its affiliated advisors, in addition to bulking up its Coronavirus Response Resource Center. The services include research reports, content for client communication about the pandemic, guidance on remote work setups and information about the Cares Act. The advisors serving on the new council will facilitate dialogue between the home office and the field during the crisis. In coordination with custodians Pershing and Fidelity Clearing & Custody Solutions’ National Financial Services, Advisor Group also raised the limit on mobile check deposits to $100,000.

ADP

The human resources management software and services firm set up an online resource center to help employers find information about applying for loans through the CARES Act’s Paycheck Protection Program.