Thoughts from the Lake
Musings from vacation and why Focus did not take an PPP money
By Jon Aldrich
I am up at the lake this week for some rest and relaxation after a stressful and tumultuous first half of 2020. It has been quite a year and I suspect most of us will be glad to see 2020 in the rear-view mirror, if we get through the second half in one piece.
Getting up north to the lake is just what the doctor ordered for me. I can sit out on the deck and look out at the water or watch the sunset. It is very therapeutic and helps me recharge my batteries every time I get up here. When I get back to the office (home or real office) after a week at the lake I feel ready to tackle the world.
Life is slower up here and you really don’t have a set time schedule, except for maybe your tee-time if you decide to go golfing. However, I never totally get away from it and I still find myself sitting on the deck answering e-mails or keeping up on what is going on in the markets and current events. But that is okay, as I can still relax and probably do more so, if I keep my finger on the pulse of things.
We have endured a tumultuous first half of 2020 to say the least, from a pandemic, to a historic market crash and recovery, the death of Kobe Bryant and the protests for the Black Lives Matter movement. Things have settled down in the markets at least for the time being, but I would venture to say, that we are still in store for plenty of bumps in the road as the pandemic is still raging, millions of people are still out of work, companies are filing bankruptcy left and right and the Presidential election is just around the corner. I have a feeling we should enjoy the summer while we can, because there is a good chance things are going to get interesting again.
On another note, you are hearing more and more about all the companies that took PPP (Paycheck Protection Program) loans and there is valid discussions about many companies as to whether they should have taken the money. Many financial advisors I am aware of took PPP loans and that is okay. However, Focus Financial Advisors did not apply for the money. Sure, when it first became apparent, I considered it and debated about whether I should just be safe and apply for the ‘free” money, but when I heard the stories of so many companies that were in dire straits and truly needed the money and I did not want to get in the way of those that needed the help so badly when we were in good shape and weathering the storm. We would not have any issues keeping our employees on the payroll.
As a business owner I run scenarios that account for a severe market drop to see how we would fare and if we have enough in reserves to be able to survive. As a financial advisor helping people keep their financial houses in order and suggesting that people have emergency funds and to prepare for hard times, I firmly believe that I as an advisor better make sure that my company is doing that as well. Sure, we would have to tighten our belt and it would be no fun, but that is what we would do and are doing. However, we were not to the point where we needed to accept help from the government.
Don’t get me wrong, we are very fortunate to be in the position we are in, and there are many small businesses that were devastated by COVID-19 and the shutdowns and absolutely were entitled to the funds available, but our industry (financial advisors) was not as affected as many other industries and thus I did not feel that Focus Financial Advisors should apply. Could things still get a lot worse and I regret this decision, possibly, but I do feel confident that we can persevere.
I am not here to stand on a pedestal and look down on those financial advisory firms that did apply for PPP loans, as each firm's situation is unique, but I do feel that those that did apply, should strongly consider returning the funds because if you have a well-run advisory firm, you should probably not need the money. Of course, there may be some advisory firms that have truly been impacted severely for one reason or another and in those cases taking PPP funds is appropriate. But I do feel the vast majority of financial advisory firms are not in this predicament. I am only suggesting this for financial advisory firms. Many restaurants, manufacturers, hair salons, and other businesses etc. have been totally decimated by the pandemic and I support all the assistance they are getting and are entitled to in making it through this crisis.
Also, don't get me started on all the large, public companies that applied for and got (with the help of big banks) PPP loans that were meant to go to SMALL businesses. Large companies have many other sources of financing that true small businesses do not have access to and many small businesses were put on the back burner as the banks helped their LARGE customers first.
Well, that is enough ranting for now. It is time for me to get back to vacation and get the batteries fully recharged, plus the kids want me to drag them around in the boat for a while. Enjoy the rest of your summer and get some rest and relaxation, I have a feeling we may need it to get through the remainder of 2020.