Coronavirus-proofing financial planning is fundamental
Whilst progress is being made globally to fight the virus, the world is also preparing to affront a coronavirus-fuelled economic downturn, all major financial markets are volatile, unemployment is on the increase, government coffers are feeling the pressure and, up to now, there is still no vaccine available.
As it stands, worldwide over 76,000 people have lost their lives due to coronavirus, with over 1.4 million cases around the world. At the time of writing, in the UAE, there are 2,076 reported cases and 11 fatalities.
Going back to February, when organisations were beginning to issue profit warnings and economies across the globe were starting to feel the impact from the pandemic, people were urged to review and revise their financial planning strategies sooner rather than later to make sure they're still on the right track to hitting their long-term financial objectives.
Typically, this involves re-evaluating savings, investments, pensions, tax planning, retirement planning, wills, education fee planning and foreign exchange.
Nevertheless, there remains a surprising number of people who have still not coronavirus-proofed their strategies, which is worrying as the world has undoubtedly changed because of the pandemic, and will continue to do so, perhaps at a faster rate.
For example, the world is moving towards negative interest rates, which will adversely impact savings but reinforce equity prices.
In addition, as is always the case during times of heightened turbulence, the economy will see winners and losers. This will result in job losses in certain sectors and, theoretically, unparalleled job and investment opportunities in others.
Indiviudal's finances will inevitably be affected by the change and disruption. A 'new normal' will stem from this pandemic, which is why it would be wise for them to reassess their financial planning strategies to ensure risks are mitigated and opportunities capitalised upon.
Financial security, more than ever before, will potentially become a personal responsibility. Finances are far too important to allow them to go off track during these unprecedented times. The time for reviewing financial planning strategies is now.
- Nigel Green is the CEO and founder of deVere Group. Views expressed are his own and do not reflect the newspaper's policy.
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