Covid-19 is proving to have a bigger impact on advisers than previous market crashes as lockdown measures and social distancing have put the brakes on new business, according to an adviser survey.
Coronavirus lockdown measures have deterred clients from signing up to advice as they prefer to have their first meeting in person, the advisers claimed.
The poll of 68 advisers, carried out by Scott Gallacher, director at Rowley Turton, via a Facebook group, found 62 per cent had seen new business enquiries fall by 51-75 per cent over the past month, with 12 per cent reporting that enquiries have fallen more than 75 per cent.
Although 22 per cent said the level of new business enquiries were the same not one adviser had seen an increase.
Mr Gallacher said the situation was different to other market downturns as advisers are only able to help clients via the phone or video conferencing.
Mr Gallacher said: “The recent market falls will have had an impact but I remember the dot-com crash and banking crisis and think the current situation is much worse due to the added ‘lockdown’ impact.
“One reason is that face-to-face meetings are naturally out of the question. I know that video calls can work very well but many people still like to ‘meet’ their advisers in the first instance.
“Also many of the catalysts to contacting a new adviser (house move, change of job, marriage, etc.) will be on hold until the situation resolves itself.
“Many retirements will also be delayed as, if you’re currently being furloughed, why would you look to retire at the moment when you might be on 80 per cent of salary for simply staying at home anyway.”
Tim Morris, independent financial adviser at Russell & Co, told FTAdviser he had seen new enquiries drop by about a third.
Mr Morris said: “When it comes to new clients, I’m finding building a relationship is taking longer and it’s definitely more difficult to build trust without first meeting someone.
“That initial meeting is very much a two-way process to get a feel for each other and how well you can work together. I find it translates much better in person.”
Mr Morris said he is focussing on existing clients to ensure they are getting the support they need.
He said: “Most of my existing clients have been keen to invest more money where they have surplus available and to provide some certainty over their financial future.
“I work with a lot of business owners who won’t get back on track for a while. Not in the short term at least.
“For this reason, I’m also spending more time nurturing existing relationships. This is where we really earn our ongoing client fees.”
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