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Covid has changed advice needs, report finds

Covid has changed advice needs, report finds

Lockdown and the increased use of technology has driven clients to seek shorter but more frequent contact with their adviser, a value of advice report from St James's Place has found.

Published yesterday (September 2), the report found clients now want advisers to partake in ad-hoc video calls and short updates rather than lengthy annual reviews. 

It suggested this could see clients achieve better outcomes, as advisers are able to provide quicker updates on portfolio performance and markets.

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Holly Mackay, founder of Boring Money, who conducted the research, said many clients saw visiting their IFA as a hassle as they had to travel or take time out of their busy schedule.

She said a few 15-minute calls rather than a long, formal meeting could be a better use of everybody’s time.

Ms Mackay said: “Some 23 per cent of advice users say Covid-19 has changed what they want from a financial adviser, and we’ve found that advisers – and financial services firms – have, for the most part, been swift to react and make radical changes to better serve clients. 

“Given the climate of continued uncertainty in the months ahead, personalised and ‘little and often’ contact is likely to be more valued than ever.”

According to the research, out of 76 advised individuals, two thirds said they now felt more positive about video calls as a way of communicating with their financial adviser.

And being able to talk to their adviser easily and frequently was “crucial to building trust”.

The report found the monetary value of advice was perceived by some clients to be 10-30 per cent better returns on their investments and there was limited active switching between advisers.

For some, having access to a large and well-resourced firm with a good reputation was most important, while others valued their relationship with the individual adviser more and would follow them to a small firm. 

The main reasons people turned to advisers were because they were looking for a financial review (58 per cent), approaching retirement (56 per cent), or they had received money via inheritance (51 per cent).

Although some investors believed they could “get by” without an adviser, many worried they would lose out due to missed opportunities. 

Concerns were also raised that non-advised individuals would make bad decisions and therefore take on more risk than they should or they could invest less and keep more in cash in case mistakes were made, leading them to miss out on stock market opportunities.

Edward Grant, director, technical connection at St. James’s Place, said: “One consequence of the global pandemic has been to demonstrate the value of expert financial advice. 

“Amid the uncertainty caused by the ongoing health, economic and stock market crisis, clients have turned to wealth management professionals, seeking reassurance their investments are in hand, and personalised solutions for the investment needs.

“The outbreak of Covid-19 has also helped to bring more people into the advice process, as attitudes towards intergenerational financial planning have shifted. Faced with new financial pressures and priorities, different generations within families are now coming together to talk about money.