The pandemic this year has impacted different sections of society in different ways. An example: research by Legal & General highlighted that 1.5m people could now delay retirement because of Covid-19 and its financial impacts.
This year’s subsequent lockdown, demanding people spend extended time at home than they might otherwise, has further caused many to re-evaluate their priorities in life. According to further research by Canvas8, many of us are reassessing the importance of work and professional life in comparison to personal relationships. As a result, if people can retire earlier in future, perhaps they are now more likely to do so.
The need today for engaging and expert financial planning and advice, in this changing environment, is arguably greater than ever. In complex and stressful times, where the future really is not known, planners have a pivotal role to play – listening carefully to their clients, empathising and trying to help them understand their priorities and options now.
Going back to basics – perhaps on a video call and asking core planning questions, such as those from American-based thought leader George Kinder – could well illicit answers very different to those given by clients six months ago. For example:
- ‘What does money mean to you?’
- ‘If you were financially secure – how would you live your life? What would you do with money?’
- ‘If you only had a few years to live, would you change your life? How?’
In a socially distanced world, the answers to these questions and building a subsequent financial plan and offering regulated advice raises new demands of firms’ previous processes. There are three key considerations, I would venture, now needed in this new normal:
- Financial advisers are increasingly adopting a single system covering the entire planning process and integrated with their back office and platforms they use. Why? First, it saves time and also removes more room for human error associated with re-keying information. It also means that firms are embracing and adopting a consistent and single definition of risk throughout their client proposition, mitigating what the FCA has termed the risk of ‘mis-calibration’ between the adoption of different planning tools and technology.
- Financial planning technology comes into its own when it enables advice firms to build and plan dynamically, in real time, with their clients. Not only is this faster than more traditional processes, it frees up advisers to do what they do best: know the client and shape recommendations accordingly. All the while, technology does what it is best at – automating often complex analysis. Many firms using financial planning technology to complete annual client reviews over Zoom, for example, have reported being able to shift from three to four meetings a week, to three to four meetings a day. A huge change.
- The presentation of information to clients must be fair, clear and not misleading. This becomes even more vital when technology is used via video chat. The field of behavioural finance is rapidly offering significant insights into how clients are likely to behave, based on their personality, situation and information they are given. The best technology will incorporate such insight into outputs.
What does this all mean? In short, financial planning today is even more valuable as a result of the coronavirus pandemic. Adopting technology which helps advisers objectively create plans in real time, offers not only transformational productivity benefits, but the ability to support good outcomes for many more clients at a time when they need it most.
If you are not already a Dynamic Planner user – and would like to find out more about how we can help you and your firm – please get in touch.