Lessons from lockdown: How to find new clients in 2020

That's a not uncommon view among advisers nowadays: the need for the industry to embrace a ‘tech-savvy’ culture is clear. But the issue of how to use this approach to attract new clients - an area of increasing interest, or perhaps concern, as the pandemic makes it harder to form new business relationships - is up for debate. 

Mark Ireland says he has managed to successfully engage and build relationships with new clients by using technology to communicate and gather client data remotely, as more people work from home and require services to be delivered ‘at an arm’s length’. 

He believes there are still lots of opportunities in attracting new clients who are looking for financial help to manage their finances as they navigate through the uncertainty that Covid-19 has thrown up, with ever-changing rules around lockdown as well as concerns surrounding job security.

The chartered financial adviser at Hitchin-based Lyndhurst Financial Management says: “Initial enquiries are dealt with a little differently these days, with Teams or Zoom-type meetings being much more common, as well as using technology to gather client data at arm’s length.

“This is working really well, and as, over time, we engage with more and more people who are ‘computer-savvy’ we will as an industry engage much more digitally with our clients, providing a personal service but tailored to online delivery.”

Since the start of the pandemic, paper-based communication and documentation has become increasingly obsolete in a society-wide effort to reduce contact and streamline services.

Key Points

• Advisers need to make use of technology to attract new clients
• New clients tend to come through recommendations from other professionals
• Clients are rethinking their finances

This shift to providing more digital services was echoed by research from Encompass Corporation, which found that 73 per cent of businesses are more likely to select a bank that could perform all relevant regulatory checks digitally.

The analysis, which quizzed 200 senior business decision-makers in large and medium-sized UK companies, found that 56 per cent believe their bank has noticeably improved aspects of its digital services since the start of the outbreak.

New enquiries

But being tech-savvy is just one way to attract clients. Mr Ireland argues that advisers can also capitalise on a post-lockdown era by tapping into the new and unexpected needs of their clients as a result of coronavirus. 

Sadly, the rise in Covid-19 deaths has also seen a rise in clients asking about wills and trusts.

Mr Ireland said: “New client enquiries have mostly continued to come through trusted relationships with other professionals, so business owners looking for guidance on pension funding and other ways of extracting funds from their company, for example.

“Others have, sadly, been as a result of unexpected deaths, due to coronavirus, leading to new will trusts being established.

“Long-term care funding enquiries have fallen a little, which we understand is similar to a dip in the level of new enquiries in good quality care homes, probably for obvious reasons given the terrible way that the sector was treated and the resulting deaths.

“My experience this year has been that once the initial fear and concern over fund vales had passed, there have been instances where existing and new clients have entered the market with new money, adding more to pensions, switching from cash where they’ve seen the low interest rates on offer fall even further.

“I have several clients who are considering whether they can afford to bring forward their planned retirement date, citing the desire for a better work-life balance or the need to make the most of life as the reason, clearly influenced by the pandemic.

“There are others who have been keen to understand the effects of possible and maybe imminent tax changes upon their plans discussed in the media; also how an increase in capital gains tax or inheritance tax will impact their and their family’s futures, so some decisions that may have been planned in a year or so have been brought forward.”

This is a great opportunity for advisers to showcase the more caring aspects of our profession Kusal Ariyawansa

A similar sentiment was echoed by Kusal Ariyawansa, who says clients need help from them with their short-term plans and not just traditional long-term goals such as retirement and pensions.

The chartered financial planner at Manchester-based Appleton Gerrard says: “Since we went into lockdown, all enquiries have been through online channels and have focused on people’s concerns rather than needs for planning.

“It is clear the vast majority do not have an effective plan in place that would give them comfort and peace of mind in knowing they are prepared for the worst while planning for the best.

“Aside from technical questions around furlough and potential loss of employment, the conversations progressed to understanding what planning had taken place and what their main concerns were. I found that people were less concerned about long-term funds, such as pensions and their losses, and focused on loss of short-term funds, such as Isas.

“This is a great opportunity for advisers to showcase the more caring aspects of our profession. It does not take too much effort or cost to schedule a 15-minute call and reassure those who are in genuine need of help.”

Be prepared

There is no doubt there is a growing appetite for financial advice due to the uncertainty of coronavirus. 

Results from a survey in July by insurer NFU Mutual found that coronavirus has prompted investors to make themselves more financially secure.

It found one in five of the 614 respondents said they had invested more money in the last three months, with 58 per cent of those people saying it is because they are spending less.

Richard Needham, investment and savings expert at NFU Mutual, said: “These figures prove that, despite the negative financial impact the pandemic has had on the stock market and on incomes, many people are looking at ways to best prepare themselves financially for the future.

“Those who now have more disposable income, usually because they are spending less due to restrictions, are trying to invest that extra money.

“Even where customers have taken a hit to their incomes, they are still looking at ways to save for the future.”

Having empathy is another key aspect in attracting new clients in a post-lockdown environment, according to Gretchen Betts.

The managing director at Bridgend-based Magenta Financial Planning says: “We’ve certainly seen more people seeking financial advice in connection with getting better organised and reviewing their plans.

“We’ve also had more enquiries about bringing forward retirement dates, choices about new jobs, or going self-employed – as well as potential investment opportunities.

“As we continue through this period of uncertainty, I think financial planners should look to remain the constant and reliable source of both information and reassurance.

“We can generate work by being highly responsive, quick to act and visible to existing and potential clients – rather than burying our head in the sand or not dealing with the uncertainty. We don’t have all the answers, but we are all in the same boat and engaging with clients with empathy and common sense is, for us, the approach that’s working well right now.”

Interestingly, more clients, both old and new, appear to be making the most of the stamp duty holiday, which is now available on the first £500,000 of all residential property purchases in England and Northern Ireland.

It was introduced by the government in a bid to revive the housing market due to the negative effects of Covid-19.

Alan Chan, director and chartered financial planner at London-based IFS Wealth & Pensions, says: “We’re experiencing more clients coming to us for mortgage purposes as they look to pursue a Buy-to-Let property instead, largely because of the stamp duty holiday.

“As the markets have been more volatile during this time, it has put some newer investors off investing in pensions or stocks and shares Isas for their long-term future who instead prefer to put their money in bricks and mortar, which, for one reason or another, makes them feel more financially secure, despite the unfavourable tax treatment of investment properties.” 

Aamina Zafar is a freelance journalist