Helping Clients Understand and Address Job Loss

Written by: Marshall Heitzman, CFP®, ChFC, FLMI, CPCU, BFA™

Aug 4, 2020 Share This 



Life is rarely uneventful. It’s unusual to live long periods of time without some kind of curve ball or surprise.

In financial planning, there are certain instances that prompt a review of a client’s financial situation. They’re encouraged to get help from an experienced financial advisor when life events occur, such as a new birth, a death in the family, a change in health, or a significant purchase or sale of a home. A good advisor helps them to be prepared with a plan that addresses the certainty of uncertainty.

The current economic situation is resulting in a lot of life-changing events for individuals in the form of job loss or career changes. Unemployment, in particular, is a life-changing event that many are experiencing, given the pandemic. Such times of uncertainty may drive many upcoming client conversations.

Job loss changes the future and will impact your client’s financial goals. The current times serve as an opportunity for advisors to engage with clients as soon as possible to talk about 401K rollovers, help them uncover other assets and align their retirement strategies. First, it’s important to understand where things are currently.

Unemployment in the United States

How bad is it? Here’s a snapshot of the latest official unemployment data released by the Bureau of Labor Statistics:

  • The unemployment rate declined by 2.2% to 11.1% in June 2020, down from its high of more than 14% in April
  • Compared to February 2020, the jobless rate in June went up by 7.6%
  • 17.8 million people are unemployed in June, an increase of 12.0 million since February1

While it’s relatively straightforward when it comes to unemployment data, the true jobless rate is more difficult to pinpoint. That’s because it’s challenging to disseminate the number of Americans who are furloughed yet have applied for unemployment. Many of those who are furloughed may be called back to work once the imminent threat of the pandemic passes. They’re likely still considered employees and may even receive insurance benefits or matching retirement funds, but without their regular paycheck.

Their future employment status is uncertain, however. The number of unemployed people who were temporarily laid off did decrease by 4.8 million in June, but the number of those with permanent job loss also rose, increasing to 2.9 million in the same period.1

Kantar recently conducted its own COVID-192 survey which provides further insights into the state of employment in the U.S.:

  • Because of the coronavirus, nearly 40% of respondents are working less. Those earning incomes between $25–74K a year have been impacted the most.
  • Only half indicate that their job security is unchanged, but Gen Xers (ages 42–55) are among those who feel least secure.
  • There are ethnic disparities, too. Non-Hispanic Whites are most likely to feel that they’re considered essential workers, meaning their workplace hasn’t been forced to shut down during the pandemic.

Hardest Hit Industries for Job Loss

The Bureau of Labor Statistics also gives insights into the industries that are most impacted by the economic downturn as a result of the pandemic. After practically coming to a standstill during stay-at-home orders, employment in leisure and hospitality rose by 2.1 million. Many of these establishments are operating at reduced capacity, however. While employment rose by 1.5 million in food services and drinking establishments, it’s still down by 3.1 million since February. Another hard-hit sector is government jobs, with state government unemployment actually rising.1

Some unemployed workers are seeking side jobs to help make ends meet, perhaps driving for a rideshare company or delivering meals or groceries for the millions of additional consumers who are now ordering in. For example, delivery orders rose 67% in March despite overall restaurant traffic falling by 22% as a result of the pandemic.3

As the economy slowly begins to reopen, businesses and government health agencies remain cautious. Some industries that can rely on remote workers are growing their workforce amid the pandemic, including recruiters, sales account executives, customer service representatives, mortgage loan originators and computer support specialists.4

Financial Opportunities During This Time

The federal government implemented the Coronavirus Aid, Relief, and Economic Security (CARES) Act to help those who face challenging financial times, including the extended deadline for income taxes, stimulus checks and additional unemployment income. There are other legislative changes we’ve written about affecting required minimum distributions (RMDs) which were waived for the 2020 calendar year, additional charitable contribution deductions and special access to retirement funds without early withdrawal penalties. It’s important for advisors to review all these changes and understand the opportunities and implications they present.

Next Steps for Investors and Advisors

The events of the past several months might have revealed that some of your clients had a lower tolerance for risk than you or they thought. As an advisor, you can help provide reassurance by framing conversations around their values as much as their finances and help them set long-term goals that align with those values. You may even want to rerun your planning projections, which will serve a better purpose once life stabilizes again, but will likely show that the long-range plan is still on track.

Beyond finances, advisors may best serve their clients by simply listening to concerns and helping them process what they’re going through. Sometimes the best decisions need to wait until they can be made with clear, rational logic once a person gets past the emotional reaction to a life event.

Go deeper and gain further insights into how to help clients navigate these uncertain times with our resource, Decreasing Uneasiness by Preparing for the Certainty of Uncertainty. It addresses the complexities of behavioral finances and how emotions impact decision making.


Marshall Heitzman
Written by: Marshall Heitzman, CFP®, ChFC, FLMI, CPCU, BFA™

Marshall is CUNA Mutual Group's Head of Advanced Planning and has more than 25 years experience in the insurance and financial services industry. He consults Financial Advisors on advanced retirement planning concepts for retirement and wealth management clients.


1Bureau of Labor Statistics, The Employment Situation — June 2020, July 2, 2020.

2Kantar, U.S. Monitor COVID-19: Volume 2, April 19, 2020., DoorDash scores valuation of $16 billion as coronavirus pushes it to top of food-delivery chain, June 19, 2020., During the coronavirus pandemic, these 5 remote jobs are in high demand, June 11, 2020.


Topics: Advanced Planning