In recent conversations with financial advisers, a common refrain has emerged: I want to do more to help clients who are in difficult circumstances. Many clients have lost or fear losing their jobs. Others have contended with illness in their immediate family. These past few months have been tough for many, and we might not be out of the woods yet.
You’ve (hopefully) been communicating with clients throughout this volatile time, and it’s likely their fears of a prolonged market downturn have calmed considerably. Their personal portfolios are aligned where they should be. Any tax nuances from recent legislation have been discussed.
As an adviser, what more can you do? Try thinking about what might concern your clients, find that pain point, and lessen it. (Note that I said lessen, not eliminate; some issues are too weighty for you to solve.) For many clients, college expenses may be top of mind.
Higher education is a source of worry for many parents, myself included. Students returned from college suddenly this spring to study at home, and for many, it’s not clear when they will return. Colleges and universities have adopted varying approaches: Some are welcoming freshmen or seniors only on campus, others are allowing all students back, and some are permitting virtual learning only.
Parents spending tens of thousands of dollars on tuition and room and board might be having second thoughts about what they are paying for, and wondering if there are ways to reduce that amount. The first area to consider is financial aid.
Earlier in the year, many of your clients probably filled out the Free Application for Federal Student Aid, or FAFSA, a form used by the government and colleges to determine need-based financial aid and merit aid. When clients completed the 2020 FAFSA form, they actually submitted tax data from two years prior — that’s how the form works.
It may be valuable to ask clients what, if anything, has changed since then. It’s possible, for example, that someone lost their job because of the coronavirus pandemic, but what about events from one year ago, or longer, that might have affected their financial situation? Were there other periods of unemployment that might not be obvious to a financial aid office? Were there unusually large expenses for medical care?
Be on the watch for these types of issues, and coach clients accordingly. Colleges have the flexibility to reconsider and rework aid packages, based on unforeseen events. How great would it feel to have helped a client’s child receive more aid, thereby lessening the load on the family?
Encourage your clients to act — the sooner the better. According to a recent survey by the National Association of Student Financial Aid Administrators, 90% of respondents expected to see an increase in the number of requested professional judgments, which allow a school’s financial aid administrator to make adjustments to a student’s dependency status. With the national unemployment rate at roughly 11%, many families are likely to need additional aid, so encourage your clients to make their requests quickly to financial aid offices.
No matter what happens, this fall's college experience is going to be drastically different for students, even those lucky few allowed on campus. If clients are financially strapped, now might be the time to have them reconsider other options, such as community colleges, in-state tuition and of course, online courses. You may have suggested this to them in the past, and perhaps they dismissed the ideas. But with many students staying home and earning college credits virtually, you might find clients are more receptive.
Think about your clients. What are they worried about? If there’s a way to help, offer to do so. When times are tough, unexpected assistance can mean so much. Clients won’t forget you were there for them when it mattered most.
[More: The practice of the future]
Kristine McManus is vice president and chief business development officer for practice management at Commonwealth Financial Network.
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