The questions coming from clients

This article is part of
Guide to advice during the pandemic

The questions coming from clients

In the first few months of this year, financial advisers might typically have expected to face pressing questions from clients about tax.

In the run up to the end of the tax year on April 5, clients’ minds were more likely focussed on making the most of their Isa and other allowances before the new tax year.

But this year advisers have had to field rather different questions and concerns from clients as the coronavirus pandemic caused UK stockmarkets to go into freefall in March, with the FTSE 100 tumbling below 5,000 at one point.

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Markets were rattled as Covid-19 spread across Europe to the UK, and prompted the UK government to announce a lockdown as the number of cases climbed.

This left many clients, whether they are business owners or nearing retirement, uncertain about what the immediate future might hold.

Client concerns

Jiten Varsani, mortgage and protection adviser at London Money, says the pandemic has prompted people to think about the financial impacts on them and their families.

“For many, this is from a lack of resilience to a major income shock, be it a complete loss of income or a reduction in income,” he notes.

“During the initial phase of the market turbulence, we had questions about the sudden drop in values and increased volatility,” says Krupesh Kotecha, financial planner at Balance Wealth Planning.

“As expected, clients were naturally concerned, with some asking if they should sell everything to limit further damage.”

He explains: “This allowed us to remind them of the planning we’d put in place before the event.

"For example, we recommend that clients should hold at least six months of expenditure in cash and as part of our cashflow modelling, we account for a market crash scenario.”

Jay Rooney, financial adviser at One and All Financial, recalls that in the first couple of weeks in March he received similar calls from clients who were concerned about the stockmarket falls.

“Then, in the last 10 days of March that changed massively because suddenly it went from our investment clients being worried about the state of their investments to all of our clients being worried about their income – in particular, our business owner clients,” Mr Rooney says.

“By far the most common question is, ‘am I still on track to achieve what I’ve set out to do?’” says Jason Bolton, director and chartered financial planner at Beaufort Financial.

“Clients want to know if they are still likely to meet their primary objective and, if not, what they need to do to get back on track.”

Mr Kotecha also began to receive a range of questions from clients following initial concerns about the stock market volatility, including:

  • I had a planned purchase which is not on hold, where should I draw this from?
  • Is the cash in my bank account safe?
  • I was planning to retire in a few months, should I change my plans?
  • Should I pay into my pension as planned?
  • Is this the right time to invest?

“This tells us that clients are most concerned about the practical aspects of their finances in the short term, while being concerned about their long-term financial security,” Mr Kotecha suggests.