Need financial advice? The art of the digital check-in

Shelly Gigante

By Shelly Gigante
Shelly Gigante specializes in personal finance issues. Her work has appeared in a variety of publications and news websites.
Posted on May 8, 2020

If you are worried about your retirement prospects, are considering tapping your home equity or 401(k) for cash following a job loss, or just want reassurance that your investment strategy remains on course amid the coronavirus pandemic, you’re not alone.

Financial professionals across the country have been working overtime to help their clients maintain financial wellness during a period of unprecedented economic uncertainty.

Due to social distancing measures, however, the vast majority of client check-ins are being conducted by phone, email, or teleconferencing.

“We’ve been having a tremendous amount of conversations, some of it just hand-holding and reassuring our clients that their plan is still sound,” said Daniel Drabinski, a MassMutual financial professional in Dallas-Fort Worth, Texas, in an interview. “Many have lost their jobs, but in most cases, they’re prepared because we had stress-tested their financial plan and set aside emergency funds for a rainy day.”

In those cases, he said, the mission is merely to remind them that their retirement account balance may be down in the short term, but their long-term plan is still solid.

Others need guidance on more complex financial matters, including:

  • Whether to take advantage of the federal government’s temporary leniency regarding borrowing or withdrawing funds from their 401(k)s, IRAs, or other qualified retirement accounts.
  • Using a home equity line of credit (HELOC) for cash during a job loss of indeterminate length. (Learn more: Home equity loans: The pros and cons)
  • Deploying an old tactic for claiming Social Security early and making up for the early withdrawal later through voluntary suspension.

“In some cases, our clients are also opportunistic, especially the ones who have set aside cash and take a long-term view of the markets,” said Drabinski. “They’re now looking to put that money to work in the markets.”

Whatever your reason for reaching out to your financial professional remotely, it’s important that you prepare ahead of time to ensure that your privacy remains protected and your questions get resolved.

Protecting your privacy

Most financial professionals use encryption technology to conduct business with clients, which facilitates the secure exchange of sensitive data. But there are steps consumers should take, too, to protect their privacy, which has become a growing concern.

In 2019, identity fraud reached nearly $17 billion in the U.S., according to Javelin Strategy & Research.1

Armed with personally identifiable information, criminals can withdraw funds from your financial accounts, file a tax return to collect your refund, open a credit card in your name, and damage your credit by opening a new checking account and writing bad checks. (Learn more: 8 simple steps to secure you digital data)

“Privacy is definitely a concern,” said Drabinski, noting that his firm uses the highest level of password and encryption technology. “We’re not exchanging any confidential information like Social Security numbers through teleconferencing technology that is not secure. And any information that passes through your system, including statements, are always sent through an encrypted email or link.”

Before conducting business with any financial institution — banks, financial professionals, investment firms, tax preparers, or estate planning attorneys — ask what policies and practices they use to protect your digital data.

Never share your passwords, Social Security number, or account information with anyone who does not need to know it. No reputable financial institution would request that information unsolicited.

And always look for the “lock” icon on the status bar of your browser, which indicates the personal and financial information you send is secure, when transmitting financial information online.

Consumer Reports also recommends updating your computers and mobile devices to keep encryption software up to date, using two-factor authentication to access accounts (such as a password with fingerprint recognition), and installing a password manager that serves as a virtual vault to create and store passwords for your online accounts.2

Stay connected

Staying connected with a trusted financial professional during times of market turmoil is more important than ever, whether you do it remotely or in person.

Generally, it’s a good idea to check in quarterly or at least once a year, and always after a major event that affects your finances, such as a job loss, salary change, birth or death in the family, or change in marital status.

Staying in close contact during the COVID-19 crisis and beyond gives your financial professional better insight into your unique financial picture, which enables them to provide more-informed guidance. It can also help ease any concerns you may have amid market volatility, giving you the confidence needed to avoid making costly mistakes with your investment portfolio. (Learn more: 3 tips to avoid locking in losses)

“When a black swan [rare and unpredictable] event like this happens, many of our clients rely on us for advice regarding both their company and their personal financial situation,” said Drabinski. “Some are asking if they should apply for a small-business loan or cut back their staff. But because we are already so entwined with their overall situation, we’re really able to provide holistic guidance through it all. When the market is down X percent and they’re thinking about moving out of stocks and bonds, we can have an educated conversation with them about their options and the importance of staying invested during market downturns.”

Questions you should ask

A remote meeting with your financial professional via either phone or teleconferencing is no different than an in-person meeting. To make the most of it, you’ll need to get organized.

Come to the table with a list of specific questions that address your concerns. For example:

  • Is my investment strategy still sound?
  • Am I still on track to reach my goals?
  • Is my family protected?

Is my investment strategy still sound?

There’s nothing like a bear market to knock the wind out of investors’ sails. During the decade-long bull market, many investors enjoyed a false sense of security, opting to invest their portfolio in higher risk stocks and mutual funds, only to find that they can’t sleep at night when the market takes a tumble.

Talk it through with your financial professional and don’t be too hasty in tweaking your asset allocation if your original investment strategy continues to be a fit for your financial goals and time horizon to retirement. If you swing too far and become overly conservative with your investments, you may lock in losses and miss any future recovery in the market, which could permanently undercut your financial security.

Your financial professional can help ensure that your portfolio is diversified enough to balance volatility, but also positioned to help you reach your goals.

Are my financial goals on track?

We all have reasons to save. Short-term goals may include buying a new car or saving for a down payment on a house. And long-term goals generally include funding our retirement or helping to pay for your children's college tuition.

If you are among the more than 30 million Americans who have lost their job during the pandemic, you’ll want to find out if you are still on track to reach your personal financial goals. The degree to which you may be affected by an income interruption likely depends on whether or not you have an emergency fund in place to pay the bills until your paychecks resume, how long your jobless status lasts, and how much you have saved toward your goals so far.

Ask what you can do to ensure that your plans don’t derail. For example, you may need to earmark extra savings toward specific goals after you return to the workforce, change your investment strategy to pursue higher returns (and assume greater risk), or scale back your lifestyle expectations.

Tim Essman, a financial professional with West Coast Wealth Strategies in San Diego, suggests asking what steps your financial professional is taking now to help protect your portfolio and prepare for the next market downturn. After all, market ups and downs are inevitable.

“We don’t know what will cause it, but there will be another correction in the market, so you want to find out how they prepare for the next such drop,” he said in an interview. “I find it’s very reassuring for my existing clients to know what our game plan is in the event of these contingencies.”

Are you positioned properly to take advantage of any future market growth?

“From a wealth management position, ask what that strategy looks like?” said Essman.

Is my family protected?

Moments of economic uncertainty also often bring to mind the importance of protecting the ones we love.

If your family depends on your income, ask if you have adequate life insurance coverage in place to provide for them in the event that you should pass away unexpectedly. Many employers offer group life insurance coverage to employees, but that’s often not enough to replace your paycheck.

Your greatest asset is likely your earnings potential. As such, it’s important to consider disability income insurance to help replace a portion of your income if you become injured or too ill to work.

Your financial professional may also be able to review your estate planning documents to see if your assets will be distributed according to your wishes after you pass, or recommend an estate planning attorney who can. Wills, powers of attorney, beneficiary designations, trusts, and guardianship documents can deliver peace of mind. Some can also potentially speed the probate process and possibly help your heirs avoid unnecessary taxation. (Learn more: Wills and the basics of estate planning)

An airtight estate plan is especially important in blended families, if you wish to ensure that your premarital assets get left to the beneficiaries you choose.

Conclusion

Don’t let social distancing measures prevent you from staying connected with your financial professionals. Times of market turmoil are when we need expert guidance the most.

You’ll get the most out of your digital check-in by taking steps to safeguard your privacy, asking the right questions, and putting proper estate planning documents in place.

Learn more from MassMutual…

Regaining financial wellness after COVID-19

How COVID-19 could shape the way we save, spend, and invest

Need financial advice? Contact us

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Javelin Strategy & Research, “2020 Identity Fraud Study: Genesis of the Identity Fraud Crisis,” April 7, 2020.

Consumer Reports, “5 Easy Ways to Protect Your Digital Privacy in 2019,” February 11, 2019.

The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.