How has the lockdown disrupted you?
Before the lockdown, I essentially ran my business from home, so obviously I have not been able to have any face-to-face meetings. Because most of my clients are older, they wouldn’t ideally have wanted to have a meeting over the telephone or over Skype. Some clients don’t mind, but to be honest I’m not a big fan either, so normally I would physically go see people.
Ultimately, I think the crisis has been disruptive, but I think it’s more fundamental, in that people generally haven’t wanted to think about money. They have been worrying about bigger things.
Can you compare the coronavirus crisis to anything you have experienced before?
No, not really. I began working in 2001, so of course I worked through the financial crash in 2008, which was worse from purely a markets point of view. That was more worrying in that sense, because of the systemic problems and at one point we all thought the wheels were coming off, didn’t we? But this crisis and its wider disruption and panic and fear is a lot more than I would have expected and also than I have experienced before.
What conversations have you had with clients, worried about their investments?
In 2008, I had clients ringing me up and panicking and crying – so from that moment I made a real point, moving forward, that I would have a doomsday conversation with all my clients. Even in some recent reviews with clients, where I had helped make them 20% for the year and they said, ‘Oh, this is amazing’ I said, ‘Yes, but one day I am going to be sat here telling you that your portfolio has gone down by 20%. You must always keep that in mind’. Whether it is those conversations or that clients are more self-educated today, it seems to have worked.
So far in this crisis I have only had one client – a new client – who has had a real panic and in his defence he had literally just begun to invest and in only a week or so he was down significantly.
The average conversation with a client has gone along the lines of, ‘Is my money down? Yes. How much? 10-15%. Oh dear. Oh well. Let’s sit tight’. I have also had emails from long-standing clients, who wrote, ‘Obviously, everything is down. Do I need to be worried?’ I have replied, ‘Don’t worry. Yes, everything has hit the fan, but you haven’t lost anything yet. As usual, please hold on for the recovery’. And they’ve said, ‘Okay. Fine’.
Of course, I’m not happy about the situation as their adviser and they’re not happy as clients. But I am pleased with how people have reacted – I don’t think I actually could have asked for a better general reaction. Hopefully, that was down to the preparation work we have together done in readiness for this type of market fall-off.
People obviously have lost varying amounts – ranging from not very much, to as much as 20%, which clearly has been dependent upon, for example, their risk profile. But people have generally been very good about what has happened.
How has Dynamic Planner helped you during the lockdown?
In one sense, we were already using Dynamic Planner so much that it had already helped us enormously – it’s an incredible system. Had we not adopted it, it would have been a nightmare trying to work through this crisis.
The risk profiling is extremely useful obviously. The integration Dynamic Planner has with Intelligent Office [iO] is also essential. And the Client Review reports are just amazing. Incidentally, I’ve just been dropping off some food shopping for a friend, who is also a financial adviser and I had been telling him about Dynamic Planner and its review reports. He now uses it and thinks the reports are amazing too.
I completed a review for a client the other day in about 20 minutes. Obviously, nothing much was required – and if a review is more complex, it will of course need more time to go into. But what Dynamic Planner has allowed me to do is review around 100 – 120 clients each year and have greater capacity, definitely. The report itself is nicely presented; it keeps MiFID happy; it’s extremely quick to produce; and everything feeds in from iO, which is excellent.
What have you done differently, in 2020, because of the crisis and lockdown?
One of the sad parts of the crisis and lockdown is the social interaction, which nobody’s been able to do – and we have a lot of older, vulnerable clients, who live on their own.
The first thing we did was get on the phone to all of them, to see if we could help in any way. A lot of 5-10min phone calls initially were 25-30min, because we were asking how they and their families were, and because they needed someone to talk to. Most people were fine, but there were some customers, who we have had for 30 years, who we did help out with things like food shopping and picking up prescriptions.
One of the other things we did was get Microsoft Teams installed for everyone and we’ve had regular meetings on Teams. We also had an 11am ‘coffee break’ on Teams each day for the social interaction and to help with everyone’s mental wellbeing.
We’ve introduced electronic signatures and we’ve looked at and upped our IT security, which we’ve always been conscious of before, but during this even more so. It’s worked well. I think some companies and providers still insisting upon something like a wet signature need to stop focusing upon their solution, but other organisation’s solutions and what can be done for the customer.
How does Dynamic Planner help your firm?
I am quite typical as an IFA, in that I don’t take many new clients on and as a result I do a lot of reviews. I think the Client Review in Dynamic Planner is wonderful – and with new cash flow Dynamic Planner is going in exactly the direction we want: the ability to show to clients the impact of, ‘What if?’ scenarios.
It says it quite early in the review reports, ‘Plan for this, but be prepared for this’. All our advisers have that conversation with clients: ‘How will you feel if markets go down?’ Of course, it is easy to say you are adventurous in terms of your attitude to risk, until it goes wrong and your portfolio has fallen in value.
We always remind our advisers that they are advising. It is the clients who are taking the risk. It is up to the adviser then to explore a client’s capability, in terms of capacity for loss, to take on agreed risk, which we always have done.
It is up to the adviser to explain risk, because there is risk in everything the client does. Even in an old-fashioned Risk Profile 1, ‘Under the bed’ there is the risk of theft and of inflation. That is where Dynamic Planner helps so much, in pictures and words, to explain that. We couldn’t be without it and it is exactly where we want to be in terms of customer experience – for attitude to risk, capacity for loss and fund analysis.
After 2016, we developed a Brexit strategy for portfolios, moving away from UK equity, but while also being prepared to return to it if needed. We wanted portfolios to have a more global outlook and Dynamic Planner allows you to build multi asset portfolios how you want, but while being aware all the time of the impact of risk and how that translates on the ‘efficient frontier’, which you can see at a glance.
‘Dynamic Planner was the first company to come to us with an actual review proposition for clients’
For a typical client review, the first thing I would do is go into Dynamic Planner and get a latest valuation for their portfolio. We then send the client the risk questionnaires to redo and then prepare the report ready for the meeting. Once with the client, you can decide if a rebalance is required.
Dynamic Planner is embedded within all our processes – and, for me, was the first company to come to us with an actual review proposition for clients. It’s the audit trail it creates and provides, in that interaction with the client from start to finish. There’s nobody else out there providing that, that I can find.
Dynamic Planner is, as we are, very customer focused and the way it is driving forward, it is exactly the way we want to go. I sing Dynamic Planner’s praises to different people and companies within the industry, because I have full confidence in what it enables me to offer customers.
Are there lasting benefits, do you think, to working remotely from home?
Yes, I think accelerating the adoption of electronic signatures, which we had been increasingly looking at for clients in the last 12 months. Also, video chat on a platform like Microsoft Teams, which we all knew about previously, but this has made us use it and we’re now going to keep it – instead of asking people to physically travel to meetings constantly.
I think Teams will allow us to have shorter, regular meetings internally – because we always ask our advisers to share information. Each client is different, which means things have to be done slightly differently, so we like our advisers to share their client cases.
I think for clients we will also introduce more meetings using Teams, which will be more efficient and better for the environment. For example, for a client we saw three times a year to review their portfolio, we’ll now do two of those meetings face-to-face and one on Teams, to cut down travel, because in a county like Cumbria you can drive for 1hr to see a client.
Moving forward, we want to make sure we can share our screens and show the client the review report during a meeting if it is remote. We’re also deciding how people who want to work from home, who didn’t previously, can in future – maybe only two to three days a week. But we’re going to do it.
What types of conversations have you had with clients?
The conversations we’ve been having have been testing how they feel emotionally and then if necessary completing again the risk questionnaires. Then of course we always have the option to rebalance their portfolio. We’ve been advising people and telling them what we think – but asking them how they feel about it, because obviously it’s their money.
For more conservative clients, we have been talking about holding their current position until we have seen more clarity in markets – and for the more adventurous, they have been putting more money in, because they recognise an opportunity and some have even wanted to rebalance their portfolio more aggressively, again because of that opportunity. They are prepared to take that risk.
We, of course, do have more conservative clients, because we have built a reputation locally of protecting people’s money – and people work hard for their money, so we have to value their position.
Some clients have been saying, ‘We haven’t been through anything like this before’ and of course, no, we haven’t been through a pandemic before. But we have been through market crashes and crises before. The end to this crisis will come – we just don’t know when.
The coronavirus crisis has turned our lives and our habits upside down overnight this year. All of us, across the UK and the globe are observing and respecting strict social distancing guidelines.
But what has been the impact of all of this at one firm, Van der Meulen Associates in South Yorkshire? Here, financial adviser Serena van der Meulen kindly takes the time to share her thoughts and experience of living and working under lockdown. And please note: the crisis has, of course, been and remains fast-moving. All Serena’s comments were correct and given in good faith at the time of interview [2 April].
How has the crisis and lockdown disrupted you and your firm?
My office is from home anyway, so that has made life easier during this. No change there. The issues with the stock market falls are always very unpleasant when they happen. Obviously, because they have been linked with health fears, it has been a really unsettling time for people. Stock markets issues, of course, are one thing – but worrying about health and safety and worrying about my clients’ health and their safety is another thing entirely. It’s exhausting emotionally.
I have been helping my clients getting set up from home for online food shopping deliveries; likewise, with prescription deliveries. I have also been helping clients set up things like iPads, over the phone, so that they can speak to family members. All those kinds of things.
I am worried about my clients who are vulnerable and lonely and old and are poorly. It has been those personal things that I have been dealing with, as much as financial things.
Will there be a lasting impact, do you think, to the way we work?
I think people who have avoided technology in the past are more likely to embrace it now. And people hopefully will have their priorities more grounded and realise the importance of health, of family and of having quality-time. I know people who before this worked an 80-hour week in the office. Now they have time at home to spend with their children.
Hopefully, people will now know their neighbours a lot better, in communities, which I think is really important. Local businesses and shops are thriving in many ways, as people appreciate the value of a good local butchers or greengrocers and how they have really been coming through for people. I hope that continues going forward.
Can you compare this crisis to anything you have experienced before?
I think we have, markets-wise. The dot-com bubble from 2000 was brutal, but it was quite isolated in a sense. It didn’t have a wider public impact. I had also only been advising then for a few years, so what happened then was a new sensation. I wasn’t fully prepared and it was quite scary, but I was part of a big company, so I had more experienced advisers around me who could guide me.
With the banking crisis in 2008, it was about a lack of trust in the world at that time. You almost felt that people would never trust big institutions and banks again after that. People felt angry.
With this current crisis, although markets have been terrible, everything that has been happening makes perfect sense to people. The drops have been based on very genuine concerns. People understand why this is happening because of the very real threat of the coronavirus.
What conversations have you been having with clients, worried about their investments?
Conversations have totally depended on the client. Clients who are experienced have not been overly concerned, because they have seen and experienced market drops before. But clients who are less experienced and who have only been invested a few years – it doesn’t matter how many times you discuss volatility, loss, capacity for loss. All those things. Until they actually experience a market loss, it’s difficult, isn’t it?
You can have all those conversations with a client; you can show them all the stats and graphs; you can prepare and stress test as absolutely best you can; but until a client actually sees those physical drops in their portfolio, the emotions are never the same. It’s terrifying for a client. And we all knew there would be a drop in markets in 2020, but, of course, nobody knew the drops would be as dramatic as this, with these reasons behind them.
There are two types of emotions clients are currently experiencing: physical, at the losses in their portfolio, but also mentally, through wider fears about their health and their safety.
How has Dynamic Planner helped your firm during the lockdown?
Risk assessing a client – I always email them the questionnaires, so there’s never any need for paper. And all my fund research is completed in Dynamic Planner and exported straight into my back office system, ready for my paraplanner to pick up and begin working on. Those are the two key things I use Dynamic Planner for – I couldn’t run my business without it.
Where Dynamic Planner has been brilliant at the moment is, for example, if you are rebalancing a portfolio for a client. You can show where their portfolio or where a fund sits on the ‘Efficient frontier’, in relation to the risk and return of the benchmark asset allocation for each risk profile. That can be a really important visual for a client – priceless.
The coronavirus crisis has turned lives and habits upside down, virtually overnight, in 2020. All of us, here in the UK and across Europe and the world, are coping and managing the best we can.
What has been the impact at Barwells Wealth Independent Financial Planning in East Sussex? Here, Chief Executive Lee Waters kindly takes time to share his thoughts and experience of the crisis and subsequent lockdown. And please note: the coronavirus crisis has been, of course, very fast-moving. All Lee’s comments were correct and given in good faith at the time of interview [9 April].
How is the crisis disrupting you and your firm?
Initially, the main disruption was getting used to the different dynamic of everybody working separately from each other – and all those conversations you would normally have across a desk, you can’t have now. It is about keeping everybody engaged and in the loop about what is going on. Video chat tools like Zoom and Microsoft Teams are very good, but they can have their limitations, in that people can talk over each other in a meeting without realising. Video chat, I guess, can lack that dynamic where everybody is physically in the same room together.
Will there be a lasting impact, do you think, to the way we work?
I think the crisis has and perhaps will move a lot of the boundaries with regards to people working from home. Firms, perhaps, have been in two camps prior to this: one camp embraced working from home and members of their team hot desking years ago, while the other is more traditional where everyone comes in each morning at 9am and works until 5.30pm when they go home. I think moving forward, firms probably will be more relaxed about people working from home, because they realise the impact isn’t as detrimental as what they thought it might have been.
Can you compare this crisis to anything you have experienced before?
I have worked through dotcom in 2000 and then obviously the credit crunch in 2008, but no, I don’t think they do compare to what is happening right now. People of course are worried about their finances now, but they are more worried about the affect the virus is having on their life overall. The volumes of calls we have received from clients who are concerned has perhaps been no greater than what we received after the UK voted for Brexit in 2016.
What conversations have you been having with clients, worried about their portfolio?
I think the typical conversation we have had is that clients, yes, are a little worried about their investments; then we explain that volatility is a natural part of investing; and their response is, ‘Yes, we knew that, but we just wanted some reassurance that things weren’t any different this time’. That is really the message we have been saying to clients from the outset of this: it is a product of markets and markets are volatile. Now actually is a good time to be buying equity – so do carry on paying in and carry on with your ISA contributions, because markets are significantly lower now than they were three months ago.
Of course, clients who have already experienced a significant market event like 2008 are more aware now than clients who were not invested in 2008. But since 2008 there have been some other, reasonably large sell-offs in equities, so even if you have been only invested for four or five years you have already experienced some volatility towards the end of 2018, for example.
Clients who have perhaps been most affected by this are people who only have been invested for 12 months. They will have seen a pretty good 2019, with maybe double-digit returns, but now, all of a sudden, they are seeing double-digit losses. But again the message really is the same: ‘Investing is long-term. You’re not invested for the next 6-12 months; you are invested for the next 10-20 years.’ It’s just reassuring people.
How is Dynamic Planner helping your firm, at the moment?
The fact that Dynamic Planner is cloud-based is of course extremely helpful, because everybody at your firm can login as though they were in the office. There is no adverse effect, in that sense. It is business as usual. We can still send the risk questionnaires out to clients, for example and overall, I don’t think there has been any disruption to how we use Dynamic Planner – and it has always been fully embedded within our processes.
We have been able to use it to help reassure clients that their risk profile isn’t changing, because the way people answer the risk questionnaires varies depending upon how they are feeling emotionally at that time – and not just about stock markets, but generally. And if you gave someone the risk questionnaires a year ago and you gave them, them today, they would come out more cautiously, because of what has happened in 2020. Again, it is about that conversation and saying to the client, ‘Are external events driving any change in attitude to risk or is it something more fundamental?’
It is about reassuring clients that we remain on the right track, with regards to risk and if there are changes to how much they want to take in future, we can use Dynamic Planner to map where they are now and where they need to be in future with their pensions and investments.