business man in home office with stylized coronavirus cells looming large outside window (Photo: Shutterstock)

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As financial markets and the economy at large are roiled by theeffects of COVID-19, financial advisors are beingproactive with clients and don't see panic in their ranks,although they do report clients showing heightened concern.

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That's among the findings of a report from Practical Perspectives, which also notesthat large asset managers, such as First Trust, American Funds, andJP Morgan; broker-dealers and home offices; and information sourceslike CNBC, Morningstar and the Wall Street Journal are proving tooffer the most useful support.

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Coronavirus restrictions aren't creating a lot of disruption toserving clients, either, with phone, email and remote conferencecapabilities enabling advisors to connect. Advisors arerelying on asset managers they already work with, andbroker-dealers —with the most helpful resources proving to beeconomic and market updates, portfolio manager insights and clientapproved materials.

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Major changes to portfolios aren't in the cards, with mostadvisors just increasing cash allocations and moving to lessaggressive equities—but they're by and large not only confidentabout how they're meeting client needs but also predicting a marketrebound over the next six months.

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How much the market will come back, however, is another story,compared with where it stood at the end of the first quarter ofthis year.

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Damage will likely be seen in revenues and profitability fromthe crisis. And while they don't expect to emerge completelyunscathed, many advisors see silver linings: growth in new clientacquisition and enhanced ability to effectively serve clients.

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But if the financial strength of advisor practices takes a hit,that could result in faster consolidation and the exodus of smalleradvisors from the industry.

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Marlene Satter

Marlene Y. Satter has worked in and written about the financial industry for decades.