Re-engaging clients with their finances

For intermediaries only

Priorities have likely shifted for many of your clients. Most people are likely to be spending more time dealing with day-to-day concerns and working from home – opposed to thinking longer-term about their finances – especially with investment markets being so volatile.

For those of you looking to encourage your clients to look more carefully at their portfolios, there are a number of ways you can approach the subject to help them refocus on their finances – even while nothing seems ‘normal’.

Offer reassurance

It’s vital that you allay any fears your clients have about future market performance using your expertise and information from previous crises to help put the current situation into perspective. Clients should be informed that while the pandemic has been with us for months now, the measures we're enduring at this stage won't be in place forever.

In short, your clients need to be ready for any recovery when it comes by preparing their investments and portfolios now. This can be done in a number of ways, and in all cases, making sure they know you're happy to work with them to get through such a difficult time will speak volumes and build a better relationship moving forwards.



Communication is key

Communication in a crisis is so important to helping clients feel more in control of a situation – make sure you keep talking to them so they get the best financial advice at the moment they need it.

  • Explore new communication methods

We know that not being able to interact on a one-to-one basis is a challenge – but think about it as an opportunity where you can and make it work for you both.

You probably know the basic communication tools that are out there by now – and might have already mastered them. Think Microsoft Teams, Zoom, Skype etc. Consider hosting webinars or upping your personal brand on social media to complement your virtual presence. Keep exploring new tech options – then regroup with your colleagues to share best practice and find out what’s working for them.

  • Personalise your methods based on your client’s preferences

The most effective communications will depend on how your clients are happiest to engage. Only you know that for sure but try to be creative within what you know works and vary formats depending on the nature of the conversation you are having. An annual review or fact finding is probably better done as a virtual face-to-face while any quick updates or answers to questions could take place via a simple phone call. Above all, be positive.

  • Tell them about the support available

Part of your role as a ‘financial coach’ is to keep clients in the loop with what’s happening that could affect them. Don’t assume clients are as up to speed with developments as you are.

The Federation of Small Businesses has some useful guides that help to explain what help is available in England, Scotland, and Wales which you can signpost or use as the basis of a plan to help any business clients recover.

There are also government sources of funding available for businesses and the self-employed. All aspects of business support from the government can be found on the Gov.UK website.

  • Pass on resources

The majority of your clients are likely to appreciate you sending them on helpful articles or hints and tips tailored to their needs. The good thing is there’s a wealth of content out there – you could consider honing your expertise into writing something yourself or perhaps direct them to our customer and Advice Makes Sense hubs to help kick start a conversation.



Talk about market fluctuations so that clients have a balanced picture

  • Understand their fears

The market falls we've seen since the start of Coronavirus have been in places relatively severe – which, in most cases, worries clients. Even those who have been through previous recessions are likely to see this as something different, primarily because of the unknown and possible health concerns to contend with.

  • Remind clients that markets fluctuate

Many may be tempted to cash in their investments during this period, but it’s worth reminding clients that if they don’t need immediate access to their cash, now could be a bad time to sell as they’ll potentially lock in those losses. And, stress that with some sectors harder hit than others, for instance leisure and travel, there can often be a positive recovery due to the nature of the stock market. If your clients can be patient, they shouldn’t make any rash decisions without getting your advice first.

Many are well-run businesses caught in extraordinary circumstances. These are also sectors that have received unprecedented levels of government support to keep them afloat until the crisis is over. Governments around the world have put billions behind these industries because they know that they are important to our economy.

  • Speak about potential opportunities and explore the concept of ‘contrarian investing’

There are advantages to significant market falls that investors should be reminded of as it could potentially offer opportunities depending on their risk appetite and personal situation. This strategy of ‘contrarian investing’ is, and has been, used to great effect by some of the world’s wealthiest individuals, such as Warren Buffett, John Paul Getty and George Soros. These experts know that buying low and selling high can be the recipe for successful investing and a lot of stocks have never been lower. Some investors will be snapping up quality stocks that could be seen as under-valued currently.



Acknowledge the bad but also point out the good

  • Communicate things openly – and sensitively

It seems that every day brings news of another high street retailer or restaurant chain going into administration or shedding jobs, from fashion retailers Oasis and TM Lewin to food giants such as Pret-A-Manger. This sort of news is alarming for most and, of course, devastating for those affected. It’s important to be honest about the hard times many industries are facing and will continue to face.

Fortunately, you are in the best position to know how best to steer them through this, as you’re likely to know their situation better than any other professional. Point out that there will be sectors and companies that have adapted – and will come out stronger.


Add value by keeping clients up to date with trends

  • Digital expansion

McKinsey Digital found that digital services have seen adoption"...vaulted five years forward in consumer and business digital adoption in a matter of around eight weeks”. This has sparked a trend that is unlikely to reverse.

Technology companies have seen demand for their services surge and as more and more companies move their businesses online, this is set to continue. This revolution is not just energising technology companies but those industries like retail and financial services that provide online shopping platforms and services to customers.

The crisis has accelerated the digital adoption process and remote working practices – we’re likely to continue to see efficiency increases across the services industry.

  • Social trends and green investing

Social impact and green investing are also likely to increase going forwards as there seems to be a greater realisation during the lockdown of the damage that the actions of humans are doing to the planet. Even some of your clients who were luke-warm to the idea might be more receptive now. The European Union has even outlined that climate change investment should be considered a priority in its recovery plan.


Talk about diversification

As advisers know, it’s difficult to predict which companies will come out of this crisis strongest and which will, unfortunately, may not be as successful. This strengthens the age-old argument for maintaining a well-diversified portfolio and limiting exposure to any single sector, geographical region or industry.

Now could be seen as a good time to reassess clients’ portfolios to make sure that they have a good spread of investments. Or consider thinking about multi-asset solutions that automatically spread exposure across industries, regions and sectors.


Increase the frequency of client reviews

As markets continue to fluctuate, it might be worth offering clients more frequent reviews of their portfolios – if they want them. It will be more labour intensive for you as an adviser, but it will help to make sure clients feel you are really on top of their portfolios at a difficult time. This is a good way to improve your long-term relationship with clients.

Any clients who have been furloughed, seen their hours cut, or lost their job altogether will have had to resort to living on existing savings and these will need to be replenished as soon as possible. This could be a difficult subject to broach, especially if your client is still using savings to pay for everyday expenses. But working with them to set a budget for spending could help to free up more money than they thought possible.


In summary

You (more than ever) are playing a crucial role in your client’s lives – guiding them through any possible financial tornados they find themselves at the center of. Continue to communicate in a way that works for both you and your clients – making the most of new technology and helpful online materials. Allay their fears and give them a balanced view of market fluctuations. By keeping them up to date with new support and market trends – you will continue to deepen your relationship and ultimately reengage them at a crucial time with their finances.