Guest Column: Growing in Uncertain Times, Lessons Learned and Preparing for the Future

The past 12 months has been a year like no other. The pandemic has taken a tremendous toll on people’s physical and emotion well-being. It has also had an impact on people’s financial circumstances, resulting in job insecurity, business closures and left many asking questions about their long-term financial security.

I feel fortunate that my team of advisors throughout Alabama are in a unique position as a trusted resource to help clients navigate the uncertainty. A sign of the growing demand for comprehensive financial advice, Merrill attracted 600 net new households in the region during 2020, a dramatic uptick from just a few years ago.

We as a firm, as managers and advisors and support staff, have learned much during this challenging pandemic through our own experiences, as well so those of our business owner and leader clients. At the top of the list of learnings I would include:

  • The importance of adaptability: Businesses with the platforms and practices to adapt quickly and seamlessly in shifting to a remote model were in the best position to succeed. For some companies, this was due to their technology infrastructure, which may have already been in place prior to the pandemic. But also, the tenaciousness and creativity of employees to make a business work even during these difficult times. Within our own firm, I take great pride in the hard work of our advisors and support staff over the past year. Even in the most difficult of circumstances, client satisfaction reached record highs early in the pandemic and has remained there over the last year.
  • We are in this together: We have all been in this together, working toward the same goal — to get to the other side. From local business owners to our community leaders and colleagues, we have all been dealing with the shifting impact of the economy and markets, the challenges of managing a family, the difficulties of managing a business, the issues associated with working from home, and the uncertainties surrounding health and what is ahead. This has brought us closer together as a community during a time that has physically kept us apart.

Through this lens of adaptability and our common experience with our clients, there are tried and true investment principles that have shaped the landscape of our advice and guidance during this time, which include:

  • The value of long-term investing: As I have observed throughout my nearly 40-year career in finances, volatility is part of the fabric of the market. Instead of short-term reactions, stay focused on long-term investing goals. Take a goals-based approach to investing and wealth management. Start by understanding your goals, hopes and aspirations and then build a financial plan and investment strategy aligned to those goals. Understandably, those priorities change along the way and challenges arise. That is why we recommend revisiting plans to make adjustments and course-corrections.
  • Take a holistic view: It is important to take into consideration your full financial picture when managing your finances. That includes both sides of your balances sheet — your assets as well as your liabilities. It is important that you work with a financial professional with access to investment management, as well as deposit and lending insights and tools.
  • Work to make up retirement savings gaps: From lower income to reduced business revenue, many people experienced financial hardships in the past year and, as a result, reduced or paused retirement savings. As conditions improve, I encourage you to take the opportunity to make up lost ground by making the most of your tax-advantage retirement savings accounts and revisiting your asset allocation to ensure it matches your risk tolerance and time horizon.

As baby boomers reach retirement age and there is an active merger and acquisition market with strategic and financial buyers, we are seeing a historic level of business owners seeking to sell or transition their business. In some cases, the pandemic has accelerated those plans. Based on our experience working with business owners in partnership with Bank of America’s business and commercial bankers, here are some considerations to keep in mind:

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  • Develop an overarching exit plan that considers both your personal wealth goals along with the business goals
  • Surround yourself with trusted professionals, such an investment banker, lawyer, accountant and personal banker or advisor, and lean on these professionals throughout the process for their expertise
  • Prepare for the post-sale and what the next chapter will be for you, such as dedicating more time to your family and friends and pursuing philanthropic priorities

Finally, this is an excellent time to review estate planning, to ensure the orderly transition of assets to the intended recipient in the event of death or disability. The final lesson of the pandemic is that we may not be able to control the world around us but we can establish a sense of control of our assets and what happens to them through good estate planning.

As we all work toward getting to the other side, the lessons learned during this period will help us plot a course for our future. As we look at the possibilities ahead, and set new and exciting goals for ourselves and our families, we can make more informed decisions that will empower us to pursue our best financial lives.

Neither Merrill nor any of its affiliates or financial advisors provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

Always consult with your independent attorney before changing or implementing any estate planning strategy.

David Oberman, Southern Gulf States Market executive at Merrill Lynch Wealth Management, has nearly 40 years of experience in the financial services industry. A Birmingham native and resident, Oberman graduated from Auburn University in 1980 and attended The Wharton School – SII program.

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