Coronacrash Advisor Insights: DBR & Co.’s David Root Jr. & Tony Sirianni
AdvisorHub’s Publisher & CEO — Tony Sirianni — asked top advisors from leading firms their opinions on the dual management of the Coronavirus and market meltdown crises. Read how these advisors are managing one of the most unique challenges we have faced as a financial community.
Here is how David Root Jr., Founder and CEO of DBR & Co. responded.
We are in a new and challenging dynamic, where not only do our clients need us more than ever, but we have to change the tried and true way that we have always interacted with them. How are you handling the challenge of working remotely and managing clients?
Like everyone else, we’ve adapted to working from home. Looking beyond some of the distractions, we have found that the discipline required to maintain even greater communication with each other and with clients has been very positive. If anything, it has forced us to sharpen our game when it comes to serving our clients.
Is video conferencing effective?
Yes. And it isn’t new to us. We purchased equipment for both offices last year and have been utilizing video conferencing for some time now. It has been especially effective with our 401(k) participant meetings and long-distance clients across the country.
How do you maintain a sense of normalcy personally and professionally?
We’ve just continued to be very busy. We have maintained a sense of routine with regularly scheduled staff and team meetings. One of the toughest things to deal with during such uncertainty is the indecision and second guessing that takes place during a crisis. But honestly, because things have gone so quickly from euphoria to despair, there just hasn’t been time for all that. We’re staying the course with clients and remain focused on delivering expert advice.
People who have never done this job don’t really understand how much psychiatry we do every day, how close we have to get to our clients to get them to tell us about their hopes and dreams and plans, nor do they realize how closely the physical fears of coronavirus and the all too real fear of financial ruin are so closely related. How are your clients reacting to the dual threat of covid-19 and the market crash?
As I mentioned, the sudden turn of events in the market from normal to abnormal to irrational has happened so quickly that clients haven’t had a drawn-out period of despair or panic. And fortunately the markets where we have offices, Pittsburgh and Toledo, are not hot spots and there are world-class health systems in place which have always provided a sense of security.
What are you telling them?
When assessing the current threat to lives and livelihoods, it’s important to provide some perspective to our clients. When the Great Depression is referenced, it’s important to note the vast difference in government response to the two crises. While our current government is stepping up to provide unprecedented support and intervention, during the Great Depression, the Secretary of Treasury Andrew Mellon believed in a policy of ‘Do no harm’, therefore the government did nothing to intervene. We’ve learned a lot since then!
What about your business? Are you just “maintaining” or are you growing?
We are growing. We added a key employee in mid-February and have already started to identify other candidates to join us on the other side of this.
Is there an opportunity to build your book because other brokers are afraid to pick up the phone right now?
This is the perfect time to reach out to people who are desperate for good financial advice and information. Brokers who rely simply on investment performance now find themselves in a tough spot. We try to be in a constant state of improvement to be a better financial planner and asset allocator for our clients.
How do you prospect without traditional client interactions during a market climate like this?
We are doing everything we can to remain visible and tell our story in the market. We are doing this by providing information and advice that people are looking for via social media, videos, etc. That includes clients and prospects. For us, this is business as usual.
Things are down, but somebody must be making money. Where do you see opportunity in the market?
As volatility has remained high, the stock market is nearly un-investable right now. That said, we are putting together our shopping list of sectors hit hardest (Energy) and are also taking a closer look at fallen angels such as investment grade credit and bonds. These have dropped a level, but still offer higher yields right now and are certainly not considered as junk bonds. That part of Fixed Income is looking more attractive right now.
Are you recommending any investments right now to clients, or suggesting they exit certain investments or sectors?
If you find yourself wanting to make changes now in the midst of all this, you will be making the wrong move. Fortunately, we advised many of our clients to increase their cash positions prior to the crisis. And our process became more defensive beginning in late 2018 when we saw both economic growth and inflation slowing among other economic factors.
Do you have any sense of where to invest post crisis?
As I mentioned, there are some sectors that have been hurt badly, but are strong enough to rebound quickly. These could include small cap value stocks, real estate, the hotel sector and as I mentioned, energy.
How are you riding out the storm?
We are. We haven’t made adjustments to our portfolios that would be panic driven. There is no need to do that at this point.
What’s been the most useful piece of technology or advice that you could suggest to other advisors who are trying to cope in these circumstances, particularly some technology or business practice that you have discovered or rediscovered during this crisis that you will use in your business going forward?
We’ve been forced to use information and communication technology even more than before. As a result, we have been utilizing non-traditional channels to communicate with clients and the marketplace. It has led to increased usage of blogs, e-mails and podcasts – so much so that we are now looking into establishing our own video channel to provide ongoing information and education.
What’s happening in your world during this crazy time that you will take with you into the post corona world that will help you grow your business and deepen your client relationships?
We can now reassure clients that all of the blocking and tackling done during the good times pays off. For example, staying true to our investment process and focusing on a more holistic approach that addresses best habits in financial planning. Sticking to the fundamentals has prepared our clients well. This has proven that having an investment policy in place and an emphasis on financial planning is more important than ever.
DBR & Co. is a member of the Dynasty Network.