Research from approximately 60 Raymond James analysts has confirmed that no sector is unaffected by the short- and long-term impacts of COVID-19. This widespread crisis has altered business trends across every sector of our economy.
With no sector safe from the effects of this unprecedented crisis, each of your clients is being affected by these macro-level trends, whether they're related to their work, lifestyle or how they invest. As a financial adviser, you are in a unique position to help guide clients based on potential effects to their financial plans.
Though long-term impacts are still uncertain, two distinct types of macro themes have emerged from the COVID crisis that are worth watching as you help clients navigate these uncharted waters.
Numerous macro trends have reversed almost 180 degrees overnight, many of which likely won’t ever revert to their prior directions.
In the last 10-plus years, there has been a growing desire to densify office space and essentially any activity possible to help drive improved returns for business. With increased potential for working from home at many jobs, densification is simply not needed or desired for the foreseeable future.
Also in the last decade, and in many instances for much longer, urbanization globally and in the U.S. has increased almost unabated, driven by obvious economies of scale, centralization of talent, and consumer lifestyle choices. We expect the fear of being stuck in lockdown in a high-rise apartment or condo, combined with the experienced productivity of WFH, will drive de-urbanization in both the near and long term.
Many of us have joked about the panic around the sudden shortage of toilet paper. But just-in-time inventory for products including toilet paper had been the dominant supply chain theme since at least the early 1990s. Given the increased risk of disruption amid the crisis, and the fact that the cost of holding inventory is so inexpensive, we foresee the end of the just-in-time inventory trend.
We believe increased disruption risks will also lead to the decentralization of manufacturing. For decades, globalization has driven the outsourcing and centralization of manufacturing to achieve the lowest possible unit costs. However, this strategy has also caused single points of failure, and we would now expect the decentralization of supply chains globally in an effort to lower disruption risks.
Perhaps no industry is poised for a change in public sentiment as much as biotech/pharma ‒ and we expect an increased focus on public/private partnerships and the value to society of biotech/pharma development as a result of the ongoing crisis.
An online disruption of value chains has been accelerating in every industry. At the beginning of the crisis, we saw e-commerce and pickup/delivery in food retail rise, and we expect those percentages to be permanently higher as a result. We’ve also seen online disruption of health care, insurance and education pick up since the beginning of the pandemic.
The ability for white-collar workers to work from home (or from anywhere, essentially) has likely permanently increased, as companies appear to be realizing how productive employees can be when they work remotely, and that costs can be meaningfully lower in a work-from-home environment. We also expect to see some shifts in lifestyles, with some portion of workers who only live where they do because of job location choosing to live where they would prefer, thus driving population shifts.
Meaningful investments will need to be made -- across tech, manufacturing capacity, transportation and more -- to enable these trends over time. But with increasing uncertainty due to recent spikes in U.S. coronavirus cases, it’s important to stay informed on the macro-level trends that are occurring in our economy and how they may affect your clients and their long-term financial plans.
Tavis C. McCourt is institutional equity strategist at Raymond James & Associates.
Voya Financial adds private equity, credit and real estate options to its AMA program, building on support for looser federal investment rules in retirement accounts.
Shannon Reid, president of Osaic and the network’s number two executive, has plenty of challenges, industry executives said.
Auditors flagged the commingling. The COO allegedly knew. Investors kept getting the pitch
The advisors on the move include two brothers leading a family practice in Connecticut, and a husband-and-wife tandem working with business owners in the West Coast.
Business owners and their heirs may be making assumptions instead of having conversations, creating challenges for succession planning, according to new research.
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
Direct indexing is on pace to outgrow ETFs and mutual funds. Northern Trust's Ken Lassner explains why the advisors who get it wish they had started sooner.
