Keeping calm and carrying on has taken on a new meaning in the wake of the coronavirus outbreak.
On a human level, as the number of cases increase daily, widespread fear has spread to panic buying and increased levels of anxiety. Advisers are neither doctors nor health professionals, but they play a vital role in calming fears over financial circumstances.
So how is the industry coping so far with what is an unprecedented event?
Advisers spoken to by Financial Adviser say they are receiving calls from clients who are seeking reassurance.
Jane Hodges, director at Money Honey Financial Planning, says: “Clients are asking whether they should be doing anything different with investment strategies — they know this can happen but it still isn’t the same as actually experiencing it.
“We have seen these crashes before and usually the worst thing is to panic and encash holdings, so everyone needs that reassurance.”
- Good financial planning is now coming to fruition
- Capacity for loss is key to one's financial plan
- Initial fee income may suffer
Darren Cooke, chartered financial planner at Red Circle Financial Planning, says the evidence of good financial planning is where advisers have factored in falls in the market.
Mr Cooke adds: “Most people know markets will fall. But for those on the cusp they are a little bit more worried. If you knew money was going to be needed you should also have prepared for that.”
Alistair Cunningham, director at Wingate Financial Planning, says: “Diversification does have its benefits. The fundamental thing is to have the planning right. This is why we are employed in this role.”
Individuals who are years away from retiring may not be panicking about their pension as much as those who are close to retiring and are faced with having to work longer.
Mr Cunningham adds: “If people are on the cusp of retiring and they do not have a clear plan to manage this current downturn, then they have not planned properly.
“This is the very definition of ‘capacity for loss’ and should form a core part of the advice process irrespective of market conditions. I am, however, sympathetic that turning off the ‘tap’ of income in the current climate can be unnerving but this is the value of decent financial planning.”
Adviser working practices are also changing. More adviser companies have set themselves up to work remotely.
Mr Cunningham says Wingate has a disaster recovery plan that includes staff working from home.
“From literally two weeks ago when we had our phones upgraded by coincidence back to 10 years ago, we have had a big shift from non-localised IT. There has been a big switch to remote working,” he says.
Changing work methods
Ms Hodges notes: “We set up a remote model that uses VC and a client portal and our team all interact with Microsoft teams, so no change for us at all.
“Nothing is really different for us. We just hope the product provider service doesn’t deteriorate too much, but we use online platforms/providers in the main, so again hopefully no change.”