Principal Financial Officer
First off, I hope everyone is healthy and able to spend some extra time with your family. Adjusting to the global pandemic and social distancing guidelines is a challenge for us all. We hope you’re staying safe and getting everything you need to wait this virus out.
Like many, The Leaders Group has pivoted to remote work in the last two weeks with 90+ percent of our staff currently working from home. We’re operating at full capacity with respect to communication, processing business, paying compensation, registrations, and compliance. We still ask that you submit business electronically when possible as we only have a few people in the back office to process mail and overnight packages. Also, please be patient as you call in with questions. You will typically get a quicker response if you call direct extensions.
As we’ve all seen in the news, the economy is expected to take a major step back in Q2 and stumble to get its footing thereafter depending on how well we mitigate the spread of the virus and how quickly we develop treatments for COVID-19. Many experts are projecting annualized Q2 GDP to fall by at least double digits. Goldman Sachs is expecting an annualized drop of thirty-four percent in Q2. Many experts are also expecting a sharp rise in the unemployment rate considering the 3.3 million claims that we saw last week plus the expected claims in April despite the stimulus package.
Where We Are
At this point, The Leaders Group is in the best position we’ve ever been in terms of net equity and liquid assets. We anticipate that we have plenty of cushion to weather this storm whether it lasts another few weeks or a few months. We also plan on leveraging the SBA loans available from the stimulus package to give us an additional 8 weeks of payroll relief for back-office employees without impacting any of our capital. At this point, there doesn’t seem to be any clear expectation on when all of this could be behind us. There are already talks of a fourth phase of U.S. stimulus which may indicate congress feels there may be a longer quarantine period than originally anticipated. We’re adjusting rapidly to new information and doing what we can to make sure The Leaders Group comes out of this economic downturn strong and with the ability to meet your needs and exceed your expectations of what you need out of your Broker-Dealer.
What You Can Do
As always, we encourage you to stay in communication with your clients. Most investors are looking for reassurance that things will eventually get better. Luckily, in the digital age, a lot of business can be done by utilizing online tools. In addition to what we have with online processing, we’re exploring preferred enterprise pricing with Zoom Video Communications. Using Zoom enables you to see the client via webcam and share screens back and forth. Also, make sure to stay up to date on the federal stimulus packages and how that may help your business and provide relief to you and your employees.
We would suggest that you consider the SBA Emergency loan package if you are planning to keep all of your employees since at least a portion of the loan will be forgiven if it is used for payroll. As Dave and others have suggested, it may make sense to draw down on business credit lines to help maintain liquidity through the duration of the pandemic.
Don’t hesitate to reach out!
Wishing you and your family good health,
Questions? Comments? Concerns?
Download our staff directory and reach out. We are maintaining normal business hours while working remotely, and have a small team in the office as well.