With today’s market, no one needs more bad news. As I have written before, the bad news from this market will linger for months and persist even once the recession finally comes to a close.
During these difficult times, navigating through down days, earning disappointments, layoffs, and anything else the market and media may throw at you can be very difficult. If you are not a financial professional, the question of what to do can create sleepless nights and extensive worry.
It is during these times having a financial professional you know and who knows you can payoff. While you may not always agree with their advice, having the opportunity to discuss rationally the steps that should/need to be taken can be very beneficial. But, herein lies the problem. Many of the firms that are going through the most difficultly are the banks and large brokerage houses. Merrill Lynch is no longer a stand-alone company and is now owned by Bank of America. There have been other large and small firms affected as well. These firms will be experiencing a multitude of changes as they adjust to new ownership or shift business direction. This may include many staffing changes. During this period many of the financial personnel will move to other firms, and in some cases they may leave the industry altogether. Other large brokerage houses such as the insurance groups or some of the banks may be in the process of laying off professionals to help manage costs. So do not be surprised if you knock on your advisor’s door and someone new answers it, or perhaps no one answers to your knock at all!
Many financial professionals are subject to the same repercussions a bad economy deals any firm. When revenues are down, costs have to be cut as well; and in so many cases, this may mean layoffs. For some professionals, this only means they are transferring to a new broker/dealer, and you will hear from them shortly so they can perhaps transfer your account to their new firm. However, they may be subject to non-compete agreements, meaning they have moved to a new firm but are unable to let you know of the transfer and cannot solicit your accounts. So, while you may believe your advisor is on the job and will call you if adjustments need to be made, there is a possibility they too have been a victim of this recession.
If and when this happens, the institution assigns your account to another representative at the firm. But that may not always mean your account is getting the attention you want or that you will get a call when required. Like so many businesses during recessions, the workload does not always slow down, but the number of hands available to do the work often does become fewer.
If you have not heard from your financial advisor within the last quarter, it is time to give them a call. You should share with them your concerns about the markets if any and review the allocation. Make sure changes have been made in light of the current economic times. For those still seeking to grow their investment values and have the time to wait for the recovery to eventually occur, it may be time to nibble at some of the best quality firms whose values have been impacted.
Recessions create opportunities for those who have patience and the time to wait. But you must be able to tolerate the account value changes that always come with recessions. For some, this may mean a substantial amount is still invested in equities, while others will have little or no equity exposure. Share your comfort level with your advisor so they have the best opportunity to assist you during these trying times.