In the wake of the COVID-19 pandemic, we are witnessing the rapid decline of stock indices and the beginning of a bear market. As business leaders, we have all been mentally calculating the damage and evaluating what we can do to mitigate it. We are also responsible for many clients and employees, and we need to guide both of these constituencies through this difficult period. We are all in this together! And together we will work our way through this crisis and come out the other side having learned much about the resilience of our firms, our clients and ourselves.

Today we are releasing the first episode in our limited webcast series on Crisis Management. This series is our attempt to harness the great mental powers of our combined G2 Community – the industry's next generation of leaders. The G2 Leadership Institute is a rigorous two-year simulation-based training program that develops the management and leadership skills of second-generation professionals so that they can take on key leadership roles at their advisory firms. You can learn more about the G2 Leadership Institute here. Applications for our next class open this June!

In this first installment, Financial Management in Bear Markets, CEO Philip Palaveev discusses the principles of managing an advisory firm through a crisis and how G2 leadership can help their organizations and clients navigate the bear market during the current COVID-19 pandemic.

Five Key Principles of Management in a Crisis

So what are the principles of financial management that firms should be adhering to during times of crisis? Philip hits upon five key takeaways in his discussion of Financial Management in Bear Markets:

1. Client retention is the number one priority: If we can retain all our clients, we will recover with the markets, but losing clients is fatal.
2. Anticipate and do not fall behind cash flow: Use forecasting to make changes before there is any shortage in cash flow.
3. Protect your vulnerable teammates: New partners buying in, low-income team members and others may need extra help.
4. Make decisive and sufficient changes: Painful changes may be necessary; make those changes swift, decisive and final.
5. Look for opportunities in the recovery: The best years for growth, business development and recruiting come after a crisis.

Philip discusses these five principles in detail and provides answers to many of the questions leaders from advisory firms across the country are asking themselves right now. What steps can we take to prepare our firm and budget for the decline in revenue? How will lower revenue impact careers, partnerships, equity decisions and strategic initiatives? How can we reduce our expenses? Should I consider letting people go, and if so, whom? How can I keep my team morale high and firm culture strong with all of this uncertainty swirling around?

We hope you enjoy this presentation on Financial Management in Bear Markets and find it useful. Please stay tuned for our next episode in our Crisis Management webcast series, all about Communicating in a Crisis.