Worries about the Brexit transition plus the pandemic meant the FTSE 100 suffered its worst year since the financial crash of 2008, dropping 14.3 per cent.
In the US it was different, with Nasdaq surging 42 per cent and the S&P 500 gaining 15 per cent. Nasdaq – dominated by technology companies – highlighted one of the themes of the year, with the increasing use of tech to combat Covid-19 accelerating industry developments that were already underway.
The past 12 months has seen more progress on the use of technology than in the past 12 years
Forecasting the next phase of the pandemic is not going to be any easier, but you would be justified in concluding that some of the forced developments of last year – such as the increased acceptance of technology by advisers and clients – will benefit the industry in the months ahead.
The hope is that the experience of the past year fighting the pandemic may provide some help in addressing longer-term issues.
The past 12 months, for instance, has seen more progress on the use of technology than in the past 12 years, with advisers and providers rapidly adopting digital processes for the acceptance of new business.
The hope must be that once customers are happy to conduct some business digitally, they will be willing to consider innovations that in the past would have seemed too difficult.
People are facing unprecedented financial challenges because of Covid-19, with many now having questions or concerns about their own financial situation and will be unsure where or who to turn to for help.
The worried wealthy need help
The wealth marketplace is served by a very flexible industry. The need for help and support for the worried wealthy in making the right investment decisions is growing all the time and was an issue long before the pandemic.
Increasingly people are taking decisions on pension funds as workplace auto-enrolment means more are saving for retirement. Savers also have to take decisions on investing lump sums.
They want support when buying investment products but do not necessarily need to pay for advice, and in many cases cannot afford to. Financial providers want to sell them products but cannot afford to be left exposed to the possibility of regulatory action or compensation claims if something goes wrong.
