Case Study: 'She was overwhelmed and anxious'

Adviser name: Ben Lancaster

Firm name: Depledge Strategic Wealth Management

Firm size: 4

The problem: My client, aged approximately 75, had lost her father and husband in quick succession. The former left my client a significant inheritance. The latter always took care of the family finances. She has no children. This left my client with a large amount of money in her current account and feeling overwhelmed and anxious about her finances and what to do.

Ben Lancaster says: "Clearly, this was a very difficult time. Her biggest concern was that her father had left her a significant amount of money and she now had this sat in one bank account.

In addition, she now had the responsibility of managing the assets that her late husband had left behind. These were spread across a large number of accounts and arrangements.

As financial management was always left to her father and husband, the client was very unsure regarding what needed to be done and nervous about taking her first foray into receiving financial advice.

There were questions about tax, how to structure cash accounts, or were the investments in the right place? She felt overwhelmed and anxious.

What were the particular challenges? 

There were several challenges, according to Lancaster. He says: "I needed to establish a way of ensuring the client felt comfortable/calm enough to have rationale conversations regarding her finances and what she hoped to achieve.

This challenge was managed by having her close friend join conversations as a support and chaperone.

I did have a quiet conversation with the client separately to make sure she was truly comfortable with this person being involved in meetings, and how they should notify me immediately if this ever changed.

I wanted to create a safe space for her. 

I also needed to explain to the client, clearly, that all of our initial conversations were at my cost and without obligation. She had never taken financial advice before and did not know how it worked - which was another challenge. 

So I felt it was really important for her to know that there were going to be no nasty surprises (in terms of being presented with a large bill) or having concerns about how things may work.

I took the time to explain how the process works and how, if we did want to work together, I would provide a proposal in writing and ensure she was comfortable/provided written authorisation before commencing any chargeable work.

How did you approach the situation?

One of the key challenges is that the client would feel overwhelmed and emotional if we covered too much ground too quickly.

I had to tailor my approach to break the conversations down into manageable chunks. I also needed to keep checking if she was ok or felt ok to continue, and continually checked for understanding.

I also gave her the opportunity to ask questions, reinforcing the point that she can ask anything she likes and that ther there are no silly questions. I wanted to create a safe space for her. 

I also had to explain the correlation between risk and reward, covering the basics, such as how it’s essential to hold some cash as a contingency and for short term expenditures.

We also had to explain that one should be careful not to hold too much cash, due to inflationary pressures and the opportunities available through medium-long term investment.

We had to work slowly and carefully through the risk profiling process (to establish her ATR) and I had to explain how investment portfolios work, the different asset classes, and how we select the appropriate arrangements for different clients and assess suitability as a result of regular reviews over time.

It really was a case of starting from scratch on the back of a very challenging period for her, hence the need to be sensitive towards this and manage things appropriately.

How did vulnerability play into your process?

Because everything was so new to the client, we often needed to revert back to certain points to re-confirm understanding/cover queries that may have been thought of.

Of course, I was more than happy to do this and only wanted the client to proceed when she was fully comfortable to do so.

Assessing her vulnerability status and ensuring she was only making decisions in her best interest after due consideration and with a clear mind was a further consideration and challenge.

Providers need to raise standards in terms of their communications and processes.

Part of the journey involved talking about how we are regulated, the protections available to her and dispelling certain misunderstandings-misconceptions regarding the industry. As a result of this process, I am certain the client will have gone from ‘sceptic’ to ‘advocate’.

Finally, the client had so many different accounts and arrangements, it was a large task to gather an understanding of what she had.

On top of that, we had to come up with a well-thought-out plan to reposition and consolidate these in line with her goals of simplicity, tax efficiency, and having the maximum available protections under schemes such as the Financial Services Compensation Scheme.

We also had to find a balance of asset allocation that aligned with her risk profile/comfort levels.

Other challenges

The fact that most of her records were kept in paper form, and we had limited access to things like online accounts and online banking, together with the the lack of use of technology made all of this a further challenge.

Since we started working together, the client has purchased herself a new laptop, which I have helped with in terms of answering some technical queries.

I have also offered my support to the client in terms of fixing a printer (that she managed to resolve without my support in the end).

The client has also asked me to proofread a letter she had written to an organisation informing them of a change in circumstance.

It’s a pleasure to help her with these matters and I take so much satisfaction from her feeling comfortable enough to ask me.

Not only this, I expect if the general public could observe the amount of ‘over and above service’ being provided, there would be an additional ‘perception shift’ of how professional advisers do look after their clients.

Were the providers helpful?

There were a lot of communications with providers, via post, telephone and even with the client visiting branches where cash deposits had been made.

The transfers and payments to our chosen platform for any investments could be chased up by us in some instances, as the client had given us authority.

But where we didn’t have this luxury, I supported her as much as possible in chasing providers up.

We have sat together in her dining room on several occasions and made phone calls to check on progress - or to try and make progress.

We got there in the end but it wasn’t easy.

Providers need to raise standards in terms of their communications and processes. I don’t think it is acceptable that providers are generally so slow in dealing with requests.

I don’t think they expected an IFA to turn away business.

Is there an option for each provider to set up dedicated online administration portals via which clients, advisers and administration teams can transact instructions, such as withdrawals or transfers?

This would be better, rather than having to fill out forms and make telephone calls, all without having a specific named contact.

These dedicated administration portals could be set up without too much difficulty and the providers could assign different individuals/teams to different pools clients, so they have a portfolio of clients, similar to how advisers would operate.

Perhaps this would bring a sense of pride to the job and a desire to deliver great service, as well as making things more manageable for everyone?

What other obstacles did you overcome?

Clearly, it wasn’t just a case of building trust and a relationship with the client. It was also a case of building these things with her friend/chaperone. There would frequently be additional questions / separate emails from this individual.

Another obstacle is that while the client does have a degree of technical ability, she would not consider herself an expert. Therefore, we needed to do as much as possible via post and in person.

Overall, I ended up having several meetings with the client to reach the point of engagement and there were several more to reach the point of getting the recommended arrangements in place.

Once we had gotten to know one another and the client felt comfortable to proceed, she actually wanted to invest more than I thought she should.

Therefore, I explained to her we should start small and build up from there if things go to plan. This was a surprise to her and her friend, as I don’t think they expected an IFA to turn away business.

We ended up investing half of the amount she initially suggested on the back of my guidance to her.

What was the outcome for the client? 

The outcome for the client has been very positive.

She has developed an understanding of how financial planning works, in addition to understanding how portfolios are constructed and reviewed.

She has achieved her ultimate goal of simplification, tax efficiency and finding the right balance between cash and investment assets based on her risk profile, comfort levels and future goals. We continue to review her positioning which delivers ongoing piece of mind.

Not only this, she doesn’t have to worry about her finances, as following the loss of the two closest men in her life, she now has an adviser that she can trust fully and that she knows has her best interests at heart.

Remember to walk before you can run.

The decision to invest only half of the client’s initially intended amount was an excellent one.

Markets have been volatile since we started, but the client is not concerned by this due to the small percentage of her overall assets exposed.

We can actually view the volatility as a positive, as it has given her a realistic experience of what investment looks like, without giving her sleepness nights.

This provides her with a foundation to maintain investment exposure in future or even increase it, where appropriate/if she has the comfort to do so.

How do you separate professionalism from the personal emotions involved?

I have a diverse client portfolio of different people with different personalities and needs. Not everyone wants to have a ‘friendship’ dynamic and ultimately, our role is a professional one.

I have clients who certainly would be considered as friends and we talk regularly away from ‘work’. But this cannot impact upon the service delivered.

For example, complacency could be a creeping concern and/or things may become a little too relaxed.

Some clients are very friendly, but we don’t talk away from work.

There are other clients who are very senior and busy people. They purely view our relationship as professional, they want discussions to be highly focussed on where we are, where we are aiming to get to and what we need to do to get there.

Despite being a people person, you have to be able to wear different hats. Understanding the character you are dealing with, how they wish to be communicated with and what they need from you is very important.

What would be your top tip for someone starting out on their journey to become an adviser?

Remember that the textbooks will tell you only so much. Qualifications are essential and open the doors to make doing the job possible.

However, people skills, and the ability to be dynamic and gaining ‘on the job’ experience of different situations is just as valuable.

Get into a good firm with a clear development plan/scheme in place for you as early as possible.

This provides the opportunity to progress through the roles (admin or paraplanning) and into advice, if you so wish, while getting some great experience and connections.

From there, you can think about the right future environment for you, based on how you want to operate, who you want to work with and what you feel your strengths and weaknesses are.

Your career will be a long one, so take your time and remember to walk before you can run.