The show must go on for UK’s financial advisers

CORONAVIRUS has left many of us self-isolating, maintaining social distancing, firms have been forced or told to close their doors … but you can’t just shut down the need for financial advice.

A couple of examples for you.

You might be approaching your chosen retirement date and don’t want to work past it if you can avoid this. That means you will need to access your pension pot, and you shouldn’t do so without first seeking advice.

Let’s suppose you are currently taking your pension via drawdown. This may have been affected badly by the stock market crash – down a third or so on its previous highs. If your pot has fallen commensurately then you may be in a panic and desperate for guidance.

Unbiased, an umbrella organisation for independent financial advisers (IFAs), states: “Even in a pandemic, you can’t just put your life on hold.

“People aged 70 and over have been advised to limit contact with others as much as possible. But if you’re in or near this age range, you will have another big concern on your mind: your retirement income.

“There is, ironically, a big overlap between those who are most at risk from coronavirus, and those most in need of receiving one-to-one financial advice.

“All of which means that financial advice simply can’t wait. Traditionally, a financial adviser will meet you face to face, often coming out to your own home.

“But remote advice has always been available from many IFAs and mortgage brokers, and in the current circumstances looks set to become far more common – whether from choice or necessity.”

Initially, a majority of IFAs continued with face-to-face meetings, according to a poll by New Model Adviser.

Taken in early March, it found that 57 per cent of IFAs were still doing so, 19 per cent had asked the elderly or vulnerable to reschedule, while 24 per cent had cancelled these entirely.

But quickly pretty much everyone had bowed to the inevitable and were working from home, keeping in touch with clients via web-based platforms.

Under normal circumstances, most advisers prefer to meet clients in person, and there is wide agreement that this method works best.

Nevertheless, in the short-term, however technology-averse some clients may be, they could have little choice but to adapt.

Unbiased states: “Online video calls are generally the next best thing.

“Your financial adviser will need to have sight of certain documents in order to assess your finances and provide an expert view. In most cases these can either be posted, or scanned and sent electronically.”

As for the wider effect on IFAs, given house moves are on hold, FTAdviser has reported that up to 30 per cent of the mortgage advice sector might struggle to survive. Others believe advice companies will emerge from the chaos in a position of strength, with a rising pipeline of new clients and more streamlined businesses.

Sitting at home bored, this is a good opportunity for people to take a long hard look at their finances, finally getting round to making a will or sorting out their pension. Further down the line it might also boost savings, putting reserves away for a rainy day, because another rainy day, whatever it be, will certainly come.

It might also spark a greater focus on income protection.

The former head of Cofunds and now chairman of Soprano Consulting Stuart Dyer told Money Marketing: “One of the things we are starting to see is an increased interest in protection.

“It is the Cinderella of advice in many ways but going forward there will be fewer yawns about this subject.”

Trevor Law is managing director of Eastcote Wealth Management, chartered financial planners,

based in Solihull. Email: tlaw@eastcotewealth.co.uk The views expressed in this article should not be construed as financial advice