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  • Colin Lea, BBus (Ag Comm), BA, GDFP, CFP®

Things that matter during crisis...

Updated: Aug 7

  • In times of #crisis there is a tendency to be inundated with vast volumes of information, and it can quickly become #leadership analysis paralysis in trying to consume, analyse and act on.

  • One thing my military training and operational deployments taught me though, was to #adapt quickly, look for key intelligence snippets or analytical papers that cut quickly to the point, and be prepared to hashtag#act quickly and decisively.

  • Here's my take on things that matter during crisis...

Intelligence Preparation of the Battlefield (IPB)

There has been an inundation of information in our social media feeds, emails, texts and twitter accounts as people rapidly pivot to respond to a double black swan event stemming from the Covid-19 outbreak. There is a tendency to be inundated with vast volumes of information, and it can quickly become analysis paralysis in trying to consume, analyse and act on. One thing my military training and operational deployments taught me though, was to adapt quickly, look for key intelligence snippets or analytical papers that cut quickly to the point, and be prepared to act quickly and decisively.

To that end I have focused on some excellent pieces written in the AFR, some great individual posts from Douglas Isles on sharing the data not the virus, two excellent live webinars with Christoper Joye from Coolabah Capital Investments, live updates from Hamish Douglas at Magellan, and more recently two great articles from Josh Brown at the Reformed Broker. The rest has just been noise, so on reflection of reading "I'm here to remind you..." I thought I would share my own thoughts at this point on leadership in crisis.

Be Adaptive as your Season Peaks

Josh Brown calls it being ready when the market turns, as rapidly changing markets are the Superbowl for Financial Advisers. In our case, I would liken it to needing to be the professional athlete at the peak of their performance at the end of the season leading into the finals. In negotiating the current crisis, those Advisers and those firms are those that have been able to adapt rapidly and implement business continuity plans, that would ensure continuity of advice to our valued clients, during an exceptionally stressful time for them. In our firms case, we planned early, trialled work from home contingency planning with split teams, and tested ahead of the curve to ensure our IT would be up to the task.

The top photo is of my home office where I ended up working for 5 out of 6 weeks in isolation, maintaining contact with clients through a combination of phone calls and zoom meetings, and switched operationally to a 'no print' environment (which was one of my goals at the start of 2020). Not only were clients appreciative of us being able to continue to support them, they commented favourably on our speed to adapt, which in turn forced them to adapt to video conferencing as well. One thing is certain, is that those established client relationships were strengthened over the last six weeks, which in turn has led to new client referrals as people pass every business relationship under the microscope.

"Plans are Nothing, Planning is Everything"

As a former logistician and strategic planner in the military, I firmly get what Eisenhower was suggesting when he made the above quote. No plan survives H-hour and it is important to remain adaptive. That doesn't mean your plan or financial strategy becomes redundant in times of crisis, as no doubt there may be tactical changes to be made, but it is equally as important to show leadership and prevent clients subscribing to the herd mentality when things get tough, when there is a tendency to make short term decisions that aren't aligned with long term strategies.

In all conversations with clients over recent weeks, we have discussed the current financial environment, but drawn their focus back to their long term goals and risk mitigation strategies, to keep them focussed on longer term outcomes while equally being positioned to look at short term opportunities. It has been our experience that clients who have an ongoing advice service have been better positioned to navigate the uncertainty of this unique financial crisis. I also read an article on Sunsuper in recent weeks which affirmed a position held by CoreData for many years that advised clients have better outcomes than non-advised clients. Sunsuper reported that advised clients have been focussed on long term strategy outcomes, whereas non-advised clients have logged into accounts and sold to cash at the bottom of the market, which history tells us is the wrong thing to do. It's important to be alert, but not alarmed, and focus on our longer term objectives.

Never Pull the Goalie

Defence is always part of an informed strategy to mitigate against risk. In the military we employ the strategy of flank protection to protect our weak side and we always hold a 'Commander's Reserve' for when the proverbial hits the fan. In football the defence is there to protect the play-maker, or in the NFL the Quarterback's blind side. In financial circles a well thought through strategy will always incorporate defensive components.

In times where the return on investment (ROI) can be low for lengthy periods, it can be tempting to redeploy those risk-off assets in search of higher returns in risk-on growth assets, forgetting the primacy of defensive assets as part of your overall strategy. Being less exposed to risk-on can leave you less susceptible to capturing the downside of a falling market, providing some dry powder to deploy as markets start to recover. Likewise we have seen validated again the strategy of keeping a number of years pension payments tied up in cash, term deposits and fixed income, so that our retired clients aren't losing sleep about where their future income will be coming from. Always protect the goalie and don't fall to the folly of letting him run off downfield.

Forward! Things to do now

I remember a former Commanding Officer of mine inculcating in his subalterns the premise of the 2nd/14th Lighthorse Regiment motto Forward! Keep looking forward, forget about what is now in the rear-view mirror, and shift your attention to the new challenges and opportunities that lie ahead. Like a new day brings a new sunrise, so to it brings with it challenges that need to be prepared for and opportunities waiting to be exploited.

So here's some things you can be doing now:

  • Reviewing your eligibility for government grants and stimulus measures that you or your business might qualify for.

  • Looking to make end of financial year contributions to super as part of your tax planning with your Accountant and Financial Adviser.

  • If you are only really looking at your financial position for the first time in detail, now is a good time to seek out a Financial Adviser CFP Professional and use the opportunity of a crisis as the stimulus to pivot and act.

  • For business owners its a great time to critically evaluate how and why you do things in business, and a good business advisory team can help you apply the lessons learnt from others to reinvent or refine your business.

  • If you have surplus cash sitting in superannuation or investment accounts, now is the perfect time to consider if a regular investment plan is right for you, keeping in mind our principle of never pull the goalie.

  • Read widely, read financial literary classics, educate yourself. Reading and researching is one of the best ways to educate yourself, to learn from the mistakes and successes of those who have been before you, and in doing so position yourself for future success. This link will take you to some of the resources I recommend studying to broaden your education on life, business, finance and investing, to help you make the decisions that matter for your financial success.

Be like Vinnie

One of my favourite movies is 'The Big Short', not the least because it does a great job of capturing the complexity of what was the Global Financial Crisis, and the lessons to be learned from that.

My favourite character in the movie is Vinnie Daniel, who is the contrarian no BS guy who is always looking a little bit further down the field. Part strategist and part goalie, his character is the perfect onscreen portrayal of the pragmatist in finance looking out for the longer term return on investment for his team.

I think everyone can benefit from having a streak of Vinnie in their character in times of crisis, or if you don't have it in your own DNA, go and find yourself a professional adviser who can be like Vinnie for you. The ROI will pay for itself ten-fold.

Our Vision and Mission

The events of recent weeks has brought my attention back as a Partner in the firm to focus on what we at the Carey Group seek to achieve with our clients, and in doing so I reflect on our Vision and mission statements:

Our Vision: To be the premier Accountancy and Financial Services business of first choice, built around clients and staff who value and respect the ethical service and advice we provide.

Our Mission: To grow our business by helping our clients create wealth and attain peace of mind through the professional delivery of quality financial planning, taxation advice and business advisory services.

If you find this resonates with you and you would like to arrange an appointment to speak with the Partners and discuss how we can professionally assist you with your financial advice needs, please contact the Townsville Office or reach out to me personally and we will be happy to arrange an initial consultation.

About the Author:

Col is a Partner and Financial Adviser CFP® Professional at Carey Group, whose area of expertise is wealth creation and retirement planning, investment strategy development for Self-Managed Super Funds, private wealth advice for high net worth clients, professional athletes, and agribusiness clients of the firm. Col had been a client of Carey Group for 10 years, prior to joining the firm in 2013, and became a Partner in 2017.

Prior to joining Carey Group, Col was in the Australian Army as an Officer serving for 21 years in military and international logistics, strategic planning, leadership and management roles. During this time he completed a Bachelor of Arts at the University of New South Wales, and a Bachelor of Business at Sydney University. 

Authorised Representative of Endure Wealth Pty Ltd (ABN 87 632 221 713 AFSL 516435).


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