Financial Planning in these extraordinary times
The following article was shared by Andrzej Borkowski, a Chartered Wealth Manager at Arcrate, part of Raymond James Investment Services. I borrowed some of Andrzej’s content for my recent mailshot – thank you Andrzej!
We are now one month on from my last “Brief”. I imagine there is a big spread of feelings of those reading who have felt the last month fly by and those for whom it has felt longer than a month. We are beginning to see easings in the “lockdown” measures implemented in different countries, as each government around the world makes their own assessment of what can be opened, and when, depending on the effects of the pandemic in their respective countries.
It was interesting some of the shops and services have been deemed “essential” in different countries during the “lockdown” which have remained open throughout. In France chocolate shops have remained open, in Australia toy shops made the list and perhaps surprisingly in America, some states deemed gun shops as essential!
The UK is perhaps a little behind some of our European neighbours. The government had originally planned to announce of their “coming out of lockdown” plan on Thursday this week (7th May) being pushed back a few days to Sunday 10th May. In fact some of the details of these plans have already been leaked and are circulating on various news websites already. No doubt spoiling some of the dramatic build up Boris Johnson was hoping to achieve.
Either way, with the lifting (in time) of the various “lockdown” measures, one of the questions that springs to mind is what day-to-day life will look like?
Will it be a “new normal” where lockdowns are lifted, but many of the social distancing measures remain for an extended period of time? Will the way people work change? Will becoming reliant on governments to support part of our incomes become the norm? Will ideas previously seen as extreme and controversial such as “universal basic income” come to the fore? Or perhaps will it be “back to normal” ie things going back to how they were before the outbreak and spread of CoVID 19 OR will it be a “something else”, some sort of pessimistic future that has not yet been anticipated or imagined?
The same paradigms of “new normal”, back to normal” or “something else” also apply to financial markets and economies, as mentioned in my last article. April saw markets rebound strongly, following the shock of March, and the unprecedented size and speed of government bailouts helped restore some positive sentiment.
The way markets rose in April seems to imply markets are currently pricing in more of a “V” shaped recovery, which I suppose is somewhere between the “new normal” and the “back to normal” camps. Whether things will play out this way will largely be down to the success of economies re-opening and how if second or third waves of CoVID arise, how well these are managed. Currently those companies and sectors that were seen as “leaders” pre-crisis are being priced by the market as those that will continue to be leaders in the post-virus economy.
As an aside I wanted to explain an often quoted but perhaps mis-understood term, ie what is “the market”? For example, when people use phrases such as “the markets are expecting….” , “the markets are behaving in…..”. This is a way commentators, authors, economists try and condense all of the different market participants (investors, pension funds, speculators etc) into one “entity” to help explain a behaviour or idea.
I have written a lot before about stock markets and economies, which to many are perhaps ambiguous, non-personal things that are hard to visualise, but as Wealth Managers we are primarily helping individuals and so perhaps some of the “high level” data surrounding markets and economies can miss the day-to-day human side of things.
The whole team at Arcrate feel fortunate that we have been able to continue working throughout this lockdown and it has been business as usual, but there will be many people out there either furloughed, unable to run their business or facing an uncertain future.
With that in mind we wanted to share two documents that were produced by the Chartered Institute for Securities & Investments (CISI) focussed on financial planning in uncertain times. There are two guides, one for those who are employed and one for the self-employed and small businesses. Inside are lots of useful bits of information that could help you, your wider family or other friends and acquaintances.
Please feel free to forward the links to anyone you know who you think may benefit from the information in those guides. Again, if anyone would like us to send them a copy either electronically or in paper, please let me know.
Finally I wanted to offer our support to you, your wider family or other friends and acquaintances who might have questions arising from anything covered in those guides. Myself and the team would be happy to arrange phone calls/video calls.
Links to the guides mentioned above:
Employed guide http://www.cisi.org/c19fp
Self-employed/small business guide http://www.cisi.org/c19fpbusiness
Andrzej Borkowski, Chartered FCSI CFPTM
You can get in touch with Andrzej on 0203 059 6002, email him at firstname.lastname@example.org and see the website here: www.arcrate.com. Or I’d be happy to put you in touch – let me know if you’d like an introduction.