How Advisers Can Better Support Clients in a Turbulent Economic Climate
The financial impact of the COVID-19 pandemic is likely to be felt by the people of the UK for some time. Job security has got steadily worse, investment performance has been turbulent, and savings rates have been slashed.
Consequently, it is of little surprise that more people are turning to financial advisers and brokers for advice. This constitutes an important opportunity for advisors to play a key role in helping their clients negotiate the economic uncertainty that lies ahead.
What All Advisers Must Do
First of all, advisers need to acknowledge and appreciate the fact that their clients’ circumstances will be extremely varied and dynamic from one to the next. Some may have held onto their jobs and even prospered, resulting in additional savings for potential investment purposes.
Elsewhere, many entrepreneurs and self-employed workers may have largely missed out on the government’s financial support package. In which case, they could be in a much more vulnerable position than they were prior to the pandemic.
Consequently, it is essential for advisers to dig as deep as possible to understand why a customer may have reached a decision regarding a specific financial product or strategy. All of which must fall within due diligence protocols, along with FCA guidance on how sensitive conversations should be broached.
Essential Safety Net
Brokers and financial advisers are interpreted by their customers as important safety nets in difficult times. They provide access to the information and insights needed for educated decisions to be made.
Now more than ever, it is essential for advisers to adopt a dynamic, thoughtful and creative approach when providing guidance. This includes familiarising clients with products, services and options in general they may not be aware of. For example, tools like equity release where there are cash flow issues, methods of reducing tax obligations and how to safeguard savings for the long-term.
When providing support and suggestions, advisors also need to be mindful of how the financial position of the client could result in them needing different types of support.
With younger people, the main goal could be to mitigate as much financial disruption as possible from the COVID-19 crisis to enable them to get on the housing ladder. For clients approaching retirement, the main objective could be to ensure they get maximum value from their pension savings and continue to generate an income stream, even when they have retired.
Unprecedented Events and Economic Uncertainty
In times of widespread economic uncertainty, advisers have the unique opportunity to simplify and improve the lives of the clients they work with. Ultimately, it is down to the customer to make all the important decisions regarding their financial position, objectives and any action to be taken.
However, it is the responsibility of the adviser to provide them with all the information, insights and support they need to ensure they make informed decisions.
Following a year spent primarily in lockdown, the priorities of most people have shifted radically from pre-pandemic times. Subsequently, advisors must provide an increasingly flexible, accommodating and proactive service, in order to help their customers overcome the challenges of the past year and the ones still to come.