An old television

Going Beyond The News With Clients

by Aoife Redmond

Coronavirus drives the U.S. and China deeper into global power struggle

Economy of near future not just bad but unrecognisable

Absorb shock of coronavirus now or face permanent destruction, Draghi warns

Do any of these sentences sound familiar? I’ll be surprised if you can answer no!

These are a taste the news headlines we faced from the 23rd – 25th March 2020, when the market took its sharpest drop in history.

The world as we knew it was set to end… or was it?

With many of our clients having lived through and survived the last financial crash in 2008, some by the skin of their teeth, we understand the anxiety the media can inflict on society, especially since global news is available at our fingertips 24/7.

As expected, the week of March 23rd many concerned clients called my team and me. I distinctly remember one client. I answered the call and immediately she frantically asked, Am I okay, is my plan still on track, will my retirement fund be okay?

This client had worked in the banking sector and the 2008 crash had severely impacted her. Understandably, after reading the news and listening to the radio she feared she’d relive the experience all over again.

After reminding the client how diversified her portfolio is, I arranged a virtual meeting with her for the following day. During our meeting we discussed her fund in detail, the numbers of stocks she held within the fund, the regions in which she is invested and broke down her exposure to the various assets classes. We also reviewed and mapped out her fund’s performance since inception, YTD and of course since the infamous 23rd March.

This client is a very low risk investor and as it turned out, her overall portfolio was down by approximately -6% since the crash, not the -30% she had heard about in the media.

We revisited the client’s financial plan, ran the appropriate simulation tests on Voyant and demonstrated that she is still on track financially to meet her lifestyle and retirement goals. The client, at this point feeling much calmer and confident in her plan, remembered how we initially concluded that this particular investment fund was the most suitable fund for her.

This swiftly turned our conversation towards the opportunities a market crash can bring, such as low-cost equities, and how the markets will in time begin to rise again.

We explored the possibility of the client moving from an 85% defensive 15% growth portfolio to a 70% defensive, 30% growth portfolio to avail of this presented opportunity. Lo and behold, she took the leap, while at the same time understanding and accepting that markets remain volatile and there are still some downturns ahead of us.

To our delight, many client conversations followed this same path. Now we spend our client meetings focusing on each client’s individual investment strategy, ignoring the news and identifying opportunities this market crash is presenting for them. While we understand nobody can time the markets, our clients are now eager to take advantage of these low-cost equities to potentially capture the market upswings.

This has been a key moment for our team, proving our clients trust us and we’ve helped them understand how market performance is relevant to their own financial plans.

A key difference I have found between this crash and 2008 is that the media’s devastating headlines do not reflect the performance of many people’s investment portfolios. Unlike in 2008, many people in today’s world were not living in the ‘Boom Bubble’ of 2007 unaware of what they were invested in and the risks their funds were actually exposed to.

At Aon, it is our mission to help our clients make better financial decisions. We do this by ensuring our clients understand how and where their money is invested, creating a life and financial plan, and investing to meet their long-term goals.

Voyant is a key factor in helping us achieve this. It enables us to demonstrate to our clients in real time the impact a market downturn may have on their plan. We can determine their capacity for loss and their need for a return on their liquid assets and then present this to our clients. This reinforces with the client that their investment strategy is the most suitable one for their situation.

Recessions are cyclical, we’re still in one and we have many more to face but going forward our clients feel prepared. They can read media horror stories without breaking out in a sweat and approach market crashes with cautious opportunity in mind rather than fear.

‘Is the coronavirus crash one of the great buying opportunities?’

The above is another headline published the week of the 23rd – 25th March which initially we suspected got buried under the doomsday headlines I mentioned at the beginning of my article. Thankfully, this has not been the case, our clients are now opportunists and even during this volatile period, they hold out hope for the future.

Aoife Redmond headshot
Courtesy of Aoife Redmond

Aoife is the New Business team leader and lead paraplanner within Aon’s Individual Financial Planning group. Aoife began her career in financial services in 2015 joining one of Ireland‘s leading banks, AIB. From there Aoife joined Aon’s Dublin team in 2017.

Aoife is a Certified Financial Planner® (CFP®) and has an honours degree in Mathematics.

Aoife’s main goal is to help clients make better financial decisions and help Aon deliver the best service to their clients.  

Having grown up in what’s known as Ireland’s garden county, Aoife enjoys exploring the outdoors and travelling to new places.