Sun Life advisor weighs in on national poll findings and the importance of tools and planning in bringing perspective
The link between finances and mental health is one that has been established time and time again – and the state of Canadians in the wake of the COVID-19 pandemic has only added to the mountain of evidence.
In a new survey of 1,001 Canadians released by Sun Life, nearly half of all respondents (45%) said they’ve been feeling less financially secure since the beginning of COVID-19. And among those who said the pandemic has weighed on their mental health, 44% identified financial stress as the top contributing cause.
The COVID-19 outbreak hasn’t weighed on all Canadians equally, however. Focusing on respondents who said their mental health has been compromised by the pandemic, 35% of those who use an advisor cited financial health concerns as a factor, compared to 47% of those who handle their own investments.
But even though they admitted to having financial concerns, just 6% of Canadians polled said they began working with a financial advisor since the pandemic began.
“I think the issue is that some Canadians, especially the younger ones, don’t feel like their nest egg is big enough,” said Bradley Pashby, CFP and president of Narrative Financial Services with Sun Life in Vancouver. “Other people may also be waiting for a life-changing event like marriage or new homeownership as a cue to start working with a professional advisor. However, we always say you’re never too young to start, and financial planning is a lifelong process.”
Among all the groups surveyed, younger Canadians appeared to suffer the greatest impact from the pandemic as 49% reported feeling less financially secure. That jives broadly with observations across provinces; in BC, Pashby said, 54% of millennials and younger Canadians reported feeling less financially secure.
“I think it’s driven by basic concerns around job security, and having to postpone other major personal or financial goals,” he said. From the survey, 55% of young Canadians reported having had to change their financial goals and plans due to the pandemic, with 29% saying they’ve been forced to dip into their savings.
In his own practice, Pashby sees how other significant groups are also feeling anxious because of financial concerns. Business-owner clients, he said, are agonizing over how to keep their business moving and not have to let their employees go. Many near-retirees, meanwhile, are nervously sizing up their nest eggs as sudden termination and market volatility crimp both their active employment income and passive investment income streams.
“As advisors, we do our best to provide some perspective to our clients,” Pashby said. “Anyone can go online and collect information, but piecing it together properly and determining what it means to you is something professionals can help with. That leads to a customized plan that’s fit to their circumstances, which brings a unique kind of reassurance.”
One important exercise in planning is the search for opportunities, which might be present even against the backdrop of economic doom and gloom. From an investment-planning perspective, battered markets might present a chance to set up a portfolio for bigger returns down the road; business owners, meanwhile, could find an opening to acquire a competitor or explore other avenues of growth. And if a client happens to be on the hunt for a secondary property, now could be a good time to find one at a bargain price.
Of course, holistic planning isn’t just about helping clients win; a lot of it, in fact, is focused on helping them avoid losing. That’s why beyond being a strong shoulder for his clients, Pashby makes a point of asking tough questions – How much life insurance do they have? What impact would their death have on the family? Are their beneficiaries updated? – that make them prepared for unpalatable “what-if” scenarios.
“These are not fun topics, not quite as exciting as investments and growth,” he said. “But as advisors and planners, we’re in a pretty amazing position to be able to talk with clients and address those big questions.”
In the wake of the COVID-19 outbreak, most clients are faced with questions and issues that they’ve never had to deal with before. For business owners, these include concerns surrounding layoffs, salary reductions, and tapping lifelines like the federal CEWS and CEBA programs; for other clients, it might be about understanding the nuances of CERB and EI. While helping clients navigate these waters might be beyond what even professional advisors can do, Pashby said he’s arranged forums where employment lawyers, accountants, and other specialists can share their knowledge and expertise on those topics.
Overall, the pandemic has churned up many problems and stressors for clients. But if there’s one good thing that can be taken away from the crisis, it’s how the importance of personalized financial planning and its impact on mental health has come into full view.
“It’s really forcing us to double down on what Sun Life is focused on, which is to help clients build lifelong financial security along with a sense of well-being and a healthier life,” Pashby said. “That’s really what we’re trying to do, and there’s never been a more important time than now to do it.”