In times of crisis, it is easy to feel helpless, especially when the government advice is to stay at home, as it has been during the Covid-19 outbreak.
But there are those who have felt inspired to step up their efforts and offer a helping hand to those that need it most during the pandemic.
One of these is Billy Burrows, retirement director at Better Retirement Group, who has set up Emergency Financial Advice (emergencyfinancialadvice.org), which went live on April 27, after witnessing global stock markets plunge in March and April.
It is a free telephone service manned by financial advisers for anyone over the age of 50.
IFAs are going to give people a free, no-strings-attached discussionHe says that when people visit the website they are invited to book a call, which will be allocated on a geographical basis to one of the more than 50 financial advisers who have volunteered.
Mr Burrows explains: “What we’re saying is IFAs are going to give people a free, no-strings-attached discussion. And it’s not advice, it’s not guidance – it’s purely a discussion.
“At the end of the discussion, we envisage the adviser doing one of three things: if they can’t help, they will signpost the client to the appropriate organisation or agency. So, for example, if someone were worried about debt, it might be Citizens Advice.
“If the person really is vulnerable or low income, the adviser will use their discretion and will offer ‘pro bono’ free advice.
“If the client wants advice and can afford it, then they will move over into the advice process with a view to [the adviser] charging a modest fee.”
The advisers are referring to Unbiased.co.uk’s cost of advice calculator as a benchmark for fees.
‘Overwhelming’ response
While Mr Burrows admits he thought he was “mad” to take on this task, the easiest part has been finding advisers willing to help.
“People were saying: ‘We’ve been thinking about trying to do this at a local level and it would be better to do it in a more formal and organised way’,” he says.
“The response from IFAs has been overwhelming.”
Among the over 50s who can use the free service, he identified two groups who are likely to have more immediate needs during the pandemic.
“First, the group that is approaching retirement, who might be worried about the effect of falling markets on their pension pots, and then the other group will be those in later life, who might be worried about wills, lasting powers of attorney or later life financial planning.”
Mr Burrows says he expects advisers who are answering enquiries will field a range of questions.
“The questions I envisage people asking [are]: ‘I’m thinking of retiring, do I need to change my retirement plans?’; ‘My funds have fallen, what action should I take?’; or ‘I’m in pension drawdown, should I think about buying an annuity?’” he says.
“People might be worried about getting their financial affairs in order if they were to catch the virus.”
Practical help
He acknowledges there are some similar advice lines and telephone services available to individuals, including the government’s Pension Wise service, which offers specialist pension guidance over the phone to the over 50s.
But he says emergencyfinancialadvice.org differs from Pension Wise by providing direct access to advisers who can go on to recommend a solution should the individual wish to move into advice.
“I think what a financial adviser can do is really get to the heart of the matter more quickly,” he says.
Mr Burrows adds: “Pension Wise is brilliant and the quality of the people managing the telephone lines is amazing.
“With Pension Wise people can go through quite a long process, but at the end of it they’re still on their own.
“We’re saying that if you talk to an adviser first, at least an adviser is able to help you in a more practical way if need be.”
Asked whether he can see the Emergency Financial Advice website and phone line remaining once the current crisis has passed, Mr Burrows says that, for now, they want to keep it “simple and focused”.
He adds: “We want to address the current financial crisis. We’ll just review it as it goes along.”
Value of advice
He warns that individuals over the age of 50 face making potentially poor decisions as a result of behavioural biases if they are left to follow their instincts.
“When markets are doing well – when people can just dip into their pension pots – it’s understandable why people think they can make their own decisions,” he points out.
“But as we all know, converting a pension pot into cash and income, or thinking about long-term care, are some of the most difficult questions in personal finance.
“People owe it to themselves to try and make the right decisions. When things go wrong, the value of advice is really more apparent.”
He says that the advice industry has responded to the current financial crisis by spending more time communicating with existing clients.
“I think the really important thing – and certainly the advice that I’m giving my clients – is that it doesn’t make sense to make wholesale changes to your investment portfolios at the moment,” he notes.
“But as and when the markets improve, we should start derisking and building up more cash or low-risk buffers, so if this ever happens again people have got the comfort of knowing they have a proportion of their funds that won’t be affected.”
Ellie Duncan is a freelance journalist
