By David B. Mandell, JD, MBA, and Jason M. O'Dell, MS, CWM, OJM Group

The COVID-19 crisis has created a significant financial setback for almost all physicians. For the first time ever, many medical practices and medical spas closed completely, decimating revenue and personal income. This was accompanied by a stock market downturn and extreme market volatility, where many investors have seen years of retirement savings wiped out in a matter of months, or even weeks.

All of this leads to a common but crucial question among physicians: "What should I do?" In this post, we will discuss six actions to take proactively, in terms of your personal finances and investments.

1. Focus on the Long Term: Macroeconomics

The long-term history of the U.S. stock market and economy is one of the topics we encourage you to discuss with your trusted financial advisors. Looking at more than100 years of data can help nervous investors reduce stress, with seeing previous serious shocks to the system (such as world wars, the Great Depression, the Great Recession, etc.) and subsequent recoveries. Doing so can help you apply the ancient wisdom "this too shall pass" to the financial arena.

2. Focus on the Long Term: Microeconomics

Perhaps even more valuable than reviewing long-term macroeconomic history with your trusted financial advisor is re-examining your personal (microeconomic) long-term future. This means reviewing your long-term financial model with assumptions that reflect our new reality—ideally through adjustable, iterative software where variables can be altered, and best/medium/worst cases saved for future review. Many who are years away from retirement may see that even the short-term pain of today will have a relatively minor impact on their long-term plans. This realization can be a relief.

Refocusing on cash reserves and personal spending is another benefit of looking at your personal planning model. In good times (i.e. the last decade), many lost focus on both personal spending and maintaining a sufficient "rainy day fund." Times likes these can lead to an appropriate refocusing on these two key elements of financial modeling.

3. Make Tactical Investment Changes... or Don't

Moving from the long term to the short term, there may be tactical investment changes to implement during this crisis. For some, this will simply mean rebalancing asset class allocations to their long-term strategic percentages. As an example, an investor with a long-term strategic model of 70% stocks and 30% bonds and alternatives might see those percentages move significantly from those benchmarks during a stock downturn, especially if stocks lose value when bonds and alternatives remain steady or gain in value. Simply rebalancing back to the 70/30 split would require some trading, even if both the client and advisor agree nothing should change for the long-term model.

For others who need cash to maintain their practices or pay personal bills, securities may need to be sold regardless of, or in addition to, rebalancing. Determining which assets to liquidate and how to minimize tax implications is extremely important in these situations.

Finally, many investors may make no changes to their portfolios. In all three cases, of course, investors should be driven by rational decision-making, ideally with the assistance of a professional advisor.

4. Make Sure Your Financial Advisor Is Acting in Your Best Interest

Understanding the difference between the fiduciary and suitability standards under which financial advisors work is crucial, yet it is a distinction that even many experienced investors do not comprehend.

Stated succinctly, one set of investment advisors operates under a professional standard that requires them to make suitable recommendations to their clients without having to place their interests below that of the client. A key distinction in terms of loyalty is also important, in that this type of advisor's duty is to the firm they work for, not necessarily the client served.

In contrast, another set of investment advisors operates under the fiduciary standard, meaning they have a fiduciary duty to their clients—i.e. they have a fundamental obligation to provide suitable investment advice and always act in their clients' best interests.

There is no better time than during this crisis to understand how one's advisors make money and to whom they owe their duty. Ask the right questions and you will learn the answers.

5. Protect Against Other Risks

As we deal with the COVID-19 pandemic, we are primarily focused on its direct impact on business and personal financial risks. For those who have the capacity to do so, this can be a good time to focus on protecting against other risks as well. Many may re-examine their insurances, from disability insurance and life insurance to long-term care coverages for themselves or family members. Others are finally getting to legal planning that they have put off for years, including asset protection and estate planning.

6. Use Downtime Wisely

We encourage all physicians to use any downtime they have during this crisis productively. Many of your practices or businesses may be closed or operating at a significantly reduced capacity. For these reasons and others—including lack of travel, conferences and children's activities—many have more time on their hands now than at any other time in their careers.

We encourage you to spend some of that time focusing on the actions outlined in this article. Doctors can also take advantage of a wide range of free educational content to increase your knowledge on financial matters. At some point, we will all go back to busier schedules and we will thank ourselves for being better prepared to handle the items on our financial to-do lists.

The authors of this post have recently completed Wealth Planning for the Modern Physician, their first book for physicians in five years. To receive free downloads of this book or Wealth Management Made Simple, text MEDSPA to 555-888, or visit the OJM Bookstore and enter promotional code MEDSPA at checkout.

David Mandell, JD, MBA, is an attorney and author of more than a dozen books for doctors, including Wealth Planning for the Modern Physician. He is a partner in the wealth management firm OJM Group, where Jason O'Dell, MS, CWM, is also a partner and financial advisor. They can be reached at 877.656.4362 or mandell@ojmgroup.com.

Disclosure: OJM Group, LLC. ("OJM") is an SEC registered investment adviser with its principal place of business in the State of Ohio. SEC registration does not constitute an endorsement of OJM by the SEC nor does it indicate that OJM has attained a particular level of skill or ability. OJM and its representatives are in compliance with the current notice filing and registration requirements imposed upon registered investment advisers by those states in which OJM maintains clients. OJM may only transact business in those states in which it is registered or qualifies for an exemption or exclusion from registration requirements. For information pertaining to the registration status of OJM, please contact OJM or refer to the Investment Adviser Public Disclosure web site www.adviserinfo.sec.gov.

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This article contains general information that is not suitable for everyone. Information obtained from third party sources are believed to be reliable but not guaranteed. OJM makes no representation regarding the accuracy or completeness of information provided herein. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. The information contained herein should not be construed as personalized legal or tax advice. There is no guarantee that the views and opinions expressed in this article will be appropriate for your particular circumstances. Tax law changes frequently, accordingly information presented herein is subject to change without notice. You should seek professional tax and legal advice before implementing any strategy discussed herein.