Coronavirus, coronavirus and coronavirus is the only topic on our minds – too much information or is it too little!
As Warren Buffet said “If you stick around long enough, you’ll see everything in markets. And it may have taken me 89 years to throw this one into the experience, but the markets, if you have to be open second by second, they react to news in a big-time way.”
We at ARQ, wanted to write a personal note having experienced, first hand, the downfalls of the financial markets over the last 25+ years.
We have recently received countless distressed calls, from colleagues and friends, about how their own wealth accumulation in the past fortnight has literally been wiped out. Moreover, many are panicking further as private banks send out urgent margin calls asking them to pledge extra collateral against loans.
Now is a great time to remind ourselves of the 5 Stages of Crisis-Management according to the legendary business guru, Jack Welch. We hope that this helps you to remain calm and aware of your choices in the eye of the storm.
Stage 1 – Denial
This stage usually begins with the belief that the problem isn’t that bad or the impact, on me personally, will be limited. The reality is that we need to deal with the brutal facts of the present and future impact – including financial and succession planning. The quicker we go through this phase, the faster we can look for positive actions and solutions.
ARQ believes that better awareness is an important part of wealth management.
Stage 2 – Containment
The initial symptom of this phase is for people to internalise the problem by outsourcing to their existing wealth manager. The reality of the situation is that every wealth manager has hundreds of clients and will mostly likely be giving the same responses to everyone – along the lines of, "these are unprecedented times but sit tight, have faith and the markets will pull back sometime in the future!” But in times of crisis, it is important that you voice your concerns, seek counsel and speak to multiple leading specialists before deciding on your next steps.
ARQ believes that access to a wider number of opinions and better informed choices lead to better results.
Stage 3 – Shame-Mongering
Jack Welch talks about this phase involving “all stakeholders fighting to get their side of the story told, with themselves as the heroes at the centre.” Unsurprisingly, this has already started with questioning who is to blame for big losses. No doubt each specialist in your wealth management chain will have a different response, but could your wealth manager have been more proactive in limiting your losses?
ARQ believes that it is important for you to have an independent and transparent service model to clearly pinpoint the weak spots.
Stage 4 – Blood on the Floor
In every crisis, there are casualties. In our perspective, this crisis might be the right time to make informed choices about the calibre of your wealth advisors. You may need a new plan on how you need to bolster your decisions in the future.
Our philosophy at ARQ is that Wealth is not a number - it is far more than that - it is a personal story about you and your loved ones. A wealth manager should personally understand the consequences of some of their decisions on your financial wealth, but also on your health, your relationships that surround you.
Stage 5 – The Crisis Gets Fixed
“Despite prophecies of permanent doom, life goes on. Usually for the better,” explain Jack Welch. Crisis primarily shows weaknesses in the system. Therefore, a crisis is another opportunity to learn, and to build a more sound, durable and stable wealth processes to navigate a better future.
We believe that the wealth management industry will adapt to the lessons learnt from this crisis - technology and wealth have to go hand in hand – and our wealth app ARQ will be your comforting aid by providing independence, transparency and digital access 24/7.
ARQ is here to help YOU – Please feel free to contact us and we will do our best to support you in these challenging times.