When life takes an unexpected turn: Financial resilience in action

A close friend of mine experienced an unexpected financial crisis last year. She had followed all the right steps — worked hard, saved diligently, invested wisely and lived responsibly. But life can be unpredictable. When her husband was unexpectedly diagnosed with a severe illness, everything changed. The emotional toll was overwhelming, and the financial strain made it even worse. A significant portion of their household income disappeared overnight, and mounting medical expenses — many not covered by insurance — threatened the future they had carefully built together.

My friend’s situation is not in any way unique. I am sure we all know someone who has had to face an unanticipated financial crisis. And I am equally sure we have noticed that some people are markedly more successful than others in dealing with such crises. Some seem to be more resilient than others.

But what does that actually mean? Resilience in this context is not a character trait, like courage (although courage is part of it); nor is it simply an attitude, like optimism (although optimism is the foundation on which resilience is built). Resilience is how a tree is able to withstand a hurricane; how Thomas Edison, perhaps America’s greatest inventor, persevered through 10,000 failed attempts to create a practical electric light before finally succeeding. Resilience is nothing short of a superpower, and it is one that Finseca is dedicated to conferring on every American.

Financial resilience gives you the ability to withstand and recover from financial shocks. What is more, financial resilience is not a luxury reserved for the wealthy; it is a fundamental necessity for individuals and families at every income level.

And most important, financial resilience is not just about how much you have in the bank — it also is about having a comprehensive, holistic plan that ensures security and stability today and tomorrow and that empowers you to navigate life’s inevitable uncertainties. In short, it’s not just about planning for a rainy day; it’s also is about preparing for the storms you cannot see coming.

A world fraught with violent change

Every generation seems to believe that it is living through the times of greatest disruption and uncertainty. As humans, we seem to be hard-wired to perceive reality that way. Nevertheless, the past few years make a strong case for our world being particularly fraught with violent change. We have traveled through what feels like the perfect storm of disruption — from a global pandemic to rising inflation, and from supply chain chaos to the stunning, sudden impact of artificial intelligence and other transformative technologies. And frankly, things have not become any smoother. 

My takeaway is that the world is unpredictable and will only get more so. But your financial security shouldn’t be. And in our ever-changing world, financial resilience is more than just a buzzword. It is a lifeline.

At Finseca, we believe that creating a holistic plan is the single best way to build strong financial resilience. Traditional approaches, such as focusing solely on investment returns or short-term financial goals, are no longer sufficient. What is needed is big-picture thinking that considers the full spectrum of an individual’s financial life, from budgeting and debt management to risk mitigation and long-term planning — and the ability to connect the dots and see how all aspects of a financial plan translate into freedom, security and peace of mind.

This is what a financial advisor can provide.

Traditionally, people tend to think of financial advisors as stock pickers or investment managers. In reality, good financial advisors are so much more. They provide not just knowledge but the wisdom, perspective and strategy that no amount of Google searching or DIY investing can match.

An advisor is like your personal financial GPS

We have all come to rely on our phone’s GPS to get us to our destination. Consider that a financial advisor is like your own personal financial GPS, able to tell you where you are, how you got there and most importantly, the best possible route to where you want to go. Your advisor is your navigator, knowing the terrain and the traffic flow, able to predict delays, guiding you past obstacles, alerting you to speed traps, helping in every way to make your journey to financial security as smooth as possible.

When challenges arise, as they inevitably will, your advisor is your financial first responder, confronting your challenges with courage and expertise, protecting you and yours from danger, guiding you through difficult situations, rescuing you if necessary.

One thing that makes the role of the financial advisor even more critical is the startling fact that so many Americans do not consider themselves financially literate. According to a study from the Global Financial Literacy Excellence Center, only slightly more than half of U.S. adults say that they are financially literate. And there are real-world consequences, with the National Financial Educators Council estimating that this illiteracy cost Americans annually an average of $1,819 per person in 2022. Although governments and educational institutions have obvious roles to play in improving this state of affairs, at Finseca we believe that financial professionals are key to improving this statistic.

As noted earlier, skilled financial advisors do far more than simply manage investments; they serve as educators, planners and advocates, helping their clients navigate a complex financial system, avoid costly pitfalls and achieve their desired long-term goals.

In fact, if we think of financial advisors as educators, the holistic plan that they develop with a client is essentially a dynamic and comprehensive syllabus for lifelong financial learning. You don’t have to take my word for it, though; independent research from Ernst and Young proves it.

In a 2022 white paper, EY estimated that in just five short years, by 2030, there will be a $240 trillion retirement savings gap and a $160 trillion protection gap. We see those dire statistics not as inevitabilities but as challenges. We are fiercely determined to help Americans at all income levels, at every stage of their lives, have the secure financial futures they deserve.

Building financial resilience in an era of economic uncertainty is not just a goal; it is a necessity. It is not just an individual responsibility; it is a societal and generational imperative.

The best time to start planning for financial resilience was yesterday. The second-best time is today. You can’t afford to wait for a crisis before you act. The time to act is now.

Maggie Seidel is executive vice president of external affairs and chief of staff at Finseca. Contact her at [email protected].