The huge disruption the pandemic has caused is having ripple effects within the way financial advisers and providers communicate with each other and their clients. Still, issues such as the advice gap and preparing for the big wealth transfer to the next generation continue to pose challenges to consumers and the way they perceive financial advice as a profession. In the first of a series of regional events across the UK organised by PIMCO and Citywire, advisers from the Midlands and city fund managers met on Zoom to share their views on how to build and maintain long-lasting client relationships.

Communication is key

Communication with clients has inevitably been more frequent since the Covid-19 outbreak, advisers say, but working towards maintaining a high level of trust with clients hasn’t changed because of the pandemic. ‘Being yourself and telling the truth’ has been the constant mantra for Philip McGovern, managing director for Henley-in-Arden-based MPA Financial Management. ‘Clients trust truth, and obviously, continue to produce solutions for what they want to do during their lifetimes and try to satisfy their goals’.

But sometimes, building durable relationships doesn’t have to be centered around financial statements and investment talk – a simple, kind gesture can do the trick. For example, Gary Metcalf, director at Gemini Wealth Management, shared the inspirational and heartfelt book, The Boy, the Mole, the Fox and the Horse, with a client, who spent lockdown on his own. ‘The feedback I had was amazing,’ says Metcalf. ‘Nothing to do with financial services, just showing that you think about them and you care about them. I do a lot of that sort of stuff with my clients, and it works, and they tell other people and it’s a good referral tool, as well.’

The event’s participants have also discussed building relationships with fund providers, where other dynamics are in place. Joseph McCurdy, vice president and account manager at PIMCO, says timely and appropriate communication and the ability to avoid information overload is what emerged the most during the pandemic in his business relationship with advisers.

‘You do have to be able to know when to step in, but sometimes you have to know when to step out,’ says McCurdy. ‘Going through that period, it’s providing people with the appropriate information. To explain what’s going on in the market, can I produce something that will allow you to communicate better with your clients?’ In the height of the pandemic, where markets saw the biggest selloff in decades, one challenge was how to communicate bad news. As Gareth Cope, chartered financial planner at Intelligent Wealth Partnerships, puts it, ‘you can’t sugar coat these things,’ so advisers need to explain clearly what is happening in markets and what they are planning to do to protect their portfolios.

‘Advice only becomes valuable when people actually go searching for it, and advisers will know this really well,’

Joseph McCurdy

Changing the perspective

For many years, or at least since the introduction of RDR in 2010, adviser businesses had to cope with a change in their models, meaning that a large chunk of the market couldn’t afford financial advice at a reasonable price. This has caused an advice gap that still resonates today within the industry. Changing people’s mind on financial services remains tricky, advisers say.

The trust element always comes into play, says Ian Smith, director of Central Wealth Planning. ‘I don’t think there’s a particularly easy way to suddenly get people [financial advice] that are not interested or don’t trust us to suddenly trust us, apart from if they get somebody else to tell them who they know and trust,’ Smith says. Another issue around the advice gap is capacity and the ability to travel around the country to meet clients. Cope thinks it is in the hand of the next generation of professionals to find more efficient ways to reach out to existing and new clients. ‘It’s going to be the next generation that does it through social media. I’ve been doing it for over 20 years. It’s not going to be me that does this, but other people coming into the industry,’ Cope says.

Attracting younger clients can help build a larger audience, albeit this might not immediately be profitable for advisers. One way to attract a younger clientele is to engage with the daughters and sons of existing clients sooner rather than later.

‘Advice only becomes valuable when people actually go searching for it, and advisers will know this really well,’ says McCurdy.

‘When you’re young and you’re going through that stage of getting married, having kids and so forth, you generally don’t have the money to either pay for financial advice or to invest. And it’s not until you come to the later stages of [life] where you actually inherit money or that you’re earning enough that you do put that money to work for you, that you actually see the value of advice.’

For others, the rapid increase in DB transfers has pushed more people to seek advice. This has not only raised more queries by people that had never asked for advice before, but also served as a way to distinguish good from bad advice. McGovern says: ‘With this big explosion of DB transfers the last few years, you’ve spoken to people who’d never sought financial advice before. Some people think it’s really expensive, but they don’t fully understand what they’re getting for it.’

For McCurdy, to bridge the advice gap is to demonstrate the value of advice and finding better ways to connect the older and younger generations, especially when it come to intergenerational wealth planning. ‘You spend two or three hours with a client and the client at some stage, does have to appreciate that they’re not necessarily just paying for those two or three hours – they’re paying for the 20 years of experience and the exams and the training and everything that you’ve done through that period of time in order to condense their needs into those two or three meetings in order to deliver them a solution,’ McCurdy says.

For Gemini’s Metcalf, building bloodline protection Wills has worked well as a way to engage with his clients’ children, the trustees and beneficiaries of the will. ‘Certainly, when you’ve got your top clients passing large amounts of money down to their children, they need to understand the value of that and the role of the trustee and the executor,’ he says. ‘Doing any inheritance tax planning, you would like their children there because they’re the ones that will benefit from any amount of inheritance tax planning you do.’

On top of technology

Many lessons have been learnt since March, and the world has come to terms with the start of a new normal. Technology has been a protagonist of the pandemic for those lucky enough to be able to work from home.

For Tim Kirby, co-founder of WKM Wealth, technology has been ‘massively important’ especially since his firm launched during the pandemic. ‘We’ve known nothing else other than being tech savvy to operate the business,’ says Kirby. ‘We’ve invested quite a lot in our online portal, which the clients are really enjoying and really like the two-way shared communication through that.

‘I came from a more traditional firm before I left and set up WKM, and I can only imagine the difficulties perhaps they’re having, not being tech savvy as a business, but all firms have learnt over the last six months that clients are pretty adaptable,’ he says.

While most clients have surprised advisers in how quickly they have adapted to technology and online meetings, things have proved more challenging when building new relationships from scratch.

‘I’ve spoken to people that have taken on new clients very well and we’ll wait and see whether we can do annual reviews again by Zoom,’ Cope says. ‘I suspect we’ll be going back to face-to-face for a fair few because I’m finding that not so many things are cropping up in Zoom. It’d be great if we could have a lot of our meetings on Zoom because we’ve got more time to do our prep or follow up work. We’ll have to wait and see in the next year whether that continues.’

Overall, the enhanced use of technology has allowed advisers and investment professionals to see clients wherever they are located. Since Covid-19 broke out, McCurdy has taken more clients onboard, and working for a US firm such as PIMCO, he was able to easily help clients across Europe, where the firm has a vast bulk of assets.

‘I did a meeting with a firm in Edinburgh and the product specialist was in Newport Beach in California. The firm in Edinburgh had four people from their investment committee dialling in from four different parts of Scotland, and for them to be able to do that and be able to question on a consistent basis was brilliant, because to get those guys into an office in Edinburgh for a meeting and get somebody across from the US takes a huge amount of resources and we don’t necessarily need to do that going forward,’ says McCurdy.

Getting technical

So what are the tech must-haves and must-dos in the new normal to engage with clients? Advisers agree that a coherent and clear website and the ability to respond quickly to client requests are paramount.

Cope believes that the relationship with providers has not changed because of Covid but has made communication quicker, although he still likes to deal with representatives of the firm in person, instead of compiling questionnaires on their website. ‘I do like to speak to someone there rather than rely upon emails and internet forms,’ he says.

The way technology has helped businesses during most of 2020 is unquestionable.As ever, it is up to the single individual and their habits to see how technology can help the relationship further. Kirby says people will still want

to meet their advisers face-to-face, for example.

‘We were talking to a fund manager that manages a £1.8bn investment trust. We’d never have been able to see them face-to-face before, but now, through this type of medium, we’ve got that access. On the client side and on the provider side, there’s some great advantages to this, but it will still take some getting used to for lots of people.’