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Client calmness as an acid test of good advice

7 May 2020

Colin Dyer, head of Proposition and Private Client Management at 1825, examines the approach to client relationships in the current crisis

Sat at our desks at the start of 2020, few of us would have predicted that in less than three months’ time we would only be allowed out of our homes once a day. And, not many of us in the financial advice industry would have envisaged how much the way we work could change as a result, that we would be working virtually, running businesses and client meetings on Zoom, Teams and Skype.

COVID-19 has turned the world on its head. It has touched every single aspect of everyone’s  lives – from the way we work and how we socialise, to the way we manage our money.

As the largest economies in the world started to shut down the real financial impact of COVID-19 started to become clear. Stockmarkets crashed, interest rates were cut and dividends were cancelled. To echo the words of the Chancellor, Rishi Sunak, these were, and continue to be, truly unprecedented times.

It’s easy, and understandable, for clients to panic at this constant stream of news but COVID-19 has underlined that the acid test of good advice is ensuring clients remain calm through a crisis.

To me, a calm client means the principles of investment have stuck and they feel reassured that their advisers, and planners, are doing the best for them. Their risk profile matches their long term investment goals and, for those nearing retirement, they are less exposed to market falls and hold more money in safe havens. These are people who understand they are in the market for the long-term, long enough to weather market fluctuations and most importantly they have developed a strong relationship and trust the people managing their money.

Communication is key

Regular, clear communication to clients is critical in the current situation, explaining the forward plan while getting ahead of any questions. If you haven’t had a panicked phone call over the last six weeks, it’s likely to be because your communication strategy has been proactive and client focused.

In this ‘new normal’ we’re all having to adapt the way we communicate. Technology has never been more vital. Making better use of the tools we’ve had access to, but before now hadn’t been fully maximised. From the online portals for sharing documents securely, to maximising video calls and greater team collaboration on systems like Microsoft Teams.

One of most significant changes for us, as a business, is the use of video calls. Previously most of our client interaction happened face-to-face, but now we have to find an alternative that suits them, with most opting for video calls. This has dispelled many presumptions for both us and our clients. We have benefitted from many clients becoming familiar with video calls via Saturday evening family zoom parties.  In addition, with reductions in travel time, the team have been able to spend longer with clients, something which is more important than ever before.

We’ve held hundreds of video calls with our clients over the last six weeks, and learnt that the method of delivery is much less important than the relationship and the advice itself.

What has taken us aback is the sheer number of our clients that have been in touch to ask how we, and our families, are coping amid the disruption. These two-way conversations underline the value of the deep relationships the team has built over time. Invariably clients have also, been communicating that they understand market crashes happen and want to stick with the long term plan we have agreed with them.

In short, client calmness during times of crisis is a key indicator that they are receiving good advice. For us, there are three factors underpinning this; regular communication, utilising technology to provide the same high level of service, and proactive engagement from the team.

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