As the Covid-19 pandemic continues and the country adapts to new ways of working, Tim Sargisson explores what this will mean for the advice profession.
As more and more people and businesses across the country are impacted by the coronavirus (COVID-19) many of us will be wondering what the world will look like when we are through this and out the other side.
Continuing the theme of stating the bleedin' obvious, firms in the strongest place before this crisis and who continue to support their clients over the next few weeks will be best placed to get through this. For example:
Business Continuity Planning (BCP). It is recognised that all firms must have robust BCP. Most firms will have invoked the first stage of their BCP as a reaction to this pandemic. We had already prepared and planned for such an event and this allowed us to introduce home working overnight following Government guidelines and advice.
Homeworking can only work effectively through using technology. This crisis will reinforce how those firms who have invested in robust technology are best placed to weather the storm. Employees who are equipped to work remotely ensures firms can continue to support advisers and clients, especially in the event of an extended lockdown such as we currently see in Italy, France and Spain.
Investment propositions. The strength of a firm's investment process and the skill to map a client's risk appetite and capacity for loss will be put under the microscope like never before. No one likes to lose money, however the clients who will feel especially aggrieved will be those where firms failed to instigate a robust investment process.
In doing so they have exposed their clients to too much risk in relation to their appetite to take on risk. The concern is that FOS will be kept busy for months to come with unhappy clients. These clients will be lost to the firm and possibly our profession forever.
Communication. There is the critical need to do our very best to support clients during these challenging times. The Yardstick Agency has produced an excellent guide: Coronavirus: Your essential guide to successful client communication. This stresses the point that our clients will be looking to advisers for a safe pair of hands.
The continuing upheaval in global stock markets demonstrates the need for all partners to provide words of reassurance at this time. The importance of how we communicate in the coming weeks and months will either enhance our reputation or significantly damage it. There's probably no middle ground.
When it comes to communication, advisers must accept that clients will be reluctant to arrange a face-to-face meeting over the next few weeks and possibly months. Many advisers still prefer this approach, but we must be realistic that this might not be an option for weeks or months to come.
Again those firms with great technology provides the firm with numerous channels to communicate with clients. Firms with a dedicated wealth platform will know that this provides an excellent way for keeping clients up to date and not just at times like these.
Finally I can't let this go without highlighting another factor close to my heart. The FSCS's forecasts for the levy. 2020-21 is estimated to be £635m, up by £87m on the total for 2019-20, with advisers expected to pay £213m towards the levy for the coming year, almost 13% more than the previous year. The main driver for this increase is compensation paid for SIPP-related claims.
The brutal fact is that poor advice has placed an intolerable financial strain on the advice community over several years and Coronavirus means that for many firms that position will worsen. We would be so much better placed to weather this storm with the money in our bank account rather than disappearing to fund the FSCS.
The good news is that we will get through this and we will get through this together. For now, we must ensure we are all in the best possible place to weather the storm that lies ahead and provide the help and reassurance that our clients expect of us.
Tim Sargisson is chief executive at Sandringham Financial Partners
This article was first published by Professional Adviser