N EWS
July/August 2020
IMPACT OF COVID-19 ON THE FINANCIAL PLANNING SECTOR NMG Consulting survey uncovers how the pandemic is affecting adviser businesses
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ccording to a recently released NMG Consulting survey*, the impact of COVID-19 market volatility on UK advice practices has been dramatic and it could reshape the UK advice market in coming years. As the economy emerges from COVID-19, advisers who have performed well during the crisis will be in a much better position to retain clients and generate referrals for new clients. Although the crisis has created opportunities for advisers to deliver value to their clients those who haven’t performed as well may find themselves under pressure. Analysis of the survey suggests that the Covid-19 crisis has done more damage than many expected with 64% of the respondents said the impact was in-line with expectations, 6% said it was worse than expected but 20% cite the impact as much worse. The recent market volatility has led to a major leap in the communications workload for advisers. Over 60% of advisers are experiencing higher in-bound enquiries.
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Advisers have also ramped up their outbound client communications to help clients respond to Covid-19 volatility with investment discipline. Nearly 60% of advisers have increased their activity in these areas. Some clients will find it harder to afford advice, but the crisis may lead others to seek advice for the first time. According to Mark Fox, Principal Consultant “we have seen this in markets such as the US, where the increase in inbound communications has been from new clients, some of whom are seeking advice for the first time and a freeze in sourcing new clients is a potential missed opportunity”. As social distancing continues to challenge face to face advice, a renewed focus on service models is likely. The disruption will emphasise the need for greater efficiencies in service and communications, even for those advisers that have been reluctant to consider video technology. According to the report, the crisis has exposed advisers’ reluctance to embrace new communication technologies. According to the survey, 91% rely on the phone to maintain client contact and 26% said they would not even consider video conferencing.
I FAmagazine.com
