Clients suffer financial damage in pandemic

9 June 2021

One in eight clients have suffered financial damage so far during the Covid-19 pandemic, with a large number opting to stop saving and investing during the crisis, research from The Openwork Partnership has shown.

Its nationwide study found that on average, advisers believe 12% of their clients have taken a financial hit, while just 8% of advisers say none of their clients have been adversely impacted by the pandemic.

Nearly half (48%) of advisers say the biggest issue is clients opting to stop saving or investing during the pandemic. Nearly a third  (32%) have clients who have spent savings during the pandemic, while 27% say clients have sold investments.

The research also showed that nearly a fifth (19%) of advisers have clients who have taken money out of pension funds to tide them over, while 31% say they have clients who have taken tax-free lump sums from pensions earlier than planned.

Mike Morrow, chief commercial officer at The Openwork Partnership, said: “Its been a tough year financially for millions of people despite unprecedented levels of Government help and advisers are seeing the impact on the ground.

“Of course, many people have benefited financially during the crisis with more money going into savings but one in eight clients on average suffering losses is bad news and particularly so when people are taking money out of long-term investments to keep going in the short-term.

“The value of financial advice and financial advisers will be very important as the UK starts to recover from the financial impact of the crisis, demonstrating how vital advice is and the role it plays in what are very personal situations.”

Professional Paraplanner