The Covid-19 pandemic and the resulting lockdowns across the UK have altered the way advisers are interacting with clients, however, the core of the profession has stayed the same: building relationships. 

Gathering at a virtual roundtable organised by PIMCO and Citywire as part of a series of regional events, advisers from Scotland discussed how they have adapted to a new world of lockdowns, the role of technology and how some aspects of providing financial advice will never change.

The pandemic has been a ‘huge cloud’ according to Keith Mackie, director at Acumen Financial Planning. And as with any cloud, he says, ‘there’s always a slight silver lining’.

‘Pros and cons will come out of this and like anything, we’ll always just have to adapt to what’s going on and we’ve all had to adapt in the last six, seven months.’

Richard Libberton, a chartered financial planner at Thomson Cooper Accountants and the chair of the Personal Finance Society for Central Scotland, says that because of the adoption of different technologies, such as Zoom and Microsoft Teams, everyone has to build even stronger relationships with their clients.

How technology has impacted advice

‘If this had happened 10 years ago, I don’t know how we’d have coped,’ says Mackie. ‘So as a firm, we had remote servers and we had Zoom before, but we never used it, we only used it very occasionally.’

Financial advisers agree that technology has become more widely used and increasingly important for managing relationships with clients.

‘Certainly, technology is a fantastic tool for us to use in any environment and it does mean that clients do have more time actually, to meet because it’s easy,’ according to Mackie. ‘They don’t have to travel to the office. I actually find that clients are more relaxed as well sometimes, not being in an office. But I can’t wait to get back to the office, to be honest.’

For Craig Hendry, managing director of Johnston Carmichael Wealth, technology is allowing his firm to ‘fish in a bigger pond’. Historically, he explains, advisers were constrained by their physical location when it came to taking on new clients. However, in the new world of home working and virtual meetings, Hendry believes firms can go further afield.

‘Clients will still want to meet, they’ll still want to see you face-to-face, but I do think [technology] will allow you to offer different solutions to different clients at different locations and in a more efficient way,’ he says.

Hendry adds that it has also allowed him to have shorter but more efficient and more frequent conversations with clients. ‘If you travel a certain distance to meet the client, you feel you’ve got to spend your time there to make your travel worthwhile. Whereas, if you’re doing it via Zoom, you can maybe just do a half hour catch up,’ he points out.

Echoing Hendry, PIMCO vice president and account manager Joseph McCurdy says: ‘I completely agree with Craig’s point about fishing in a bigger pond now and the ability for firms, regardless of where they’re based, to engage with firms anywhere in the world now.’

He says that in the past, if clients in the UK wanted a meeting with a US-based portfolio manager, the asset management group could only set up face-to-face meetings twice a year. But now, these are a lot easier to organise.

Sam Wealth partner Daniel Oliver says before Covid-19 he wasn’t brave enough to hold many virtual meetings, however, he has come to realise that technology allows him to have more contact with clients and be more organised.

However, he is still ‘looking forward to the days that we can go back to having face-to-face meetings, be able to read people and they can get to know us’.

‘You can’t replace a handshake and a discussion face-to-face informally. You pick up lots of information there that maybe, we won’t do in this format,’ Oliver adds.

Gaining a client’s trust

Despite the rise of technology and changing modes of interaction, the most important thing to establish long-term relationships with clients is still related to building trust. And according to Hendry, it is about doing what you say you are going to do.

‘If you do not hit expectations, then it’s very difficult to bring that relationship forward. If you do what you say you are going to do, trust will naturally come through,’ he says.

Knowing when to stop talking and start listening is also at the top of the list when it comes to establishing rapport.

‘The key is not to talk and not to go straight to solutions but actually to listen, and that is something I’ve learned in 20-odd years,’ says Oliver. ‘Keeping your mouth closed and trying to listen to what the client is saying, but also, what the client is not saying. Sometimes, they are opening up in front of you and giving more information in this meeting than they do to their partner. That’s part of it.’

Mackie, who agrees with both Hendry and Oliver, points out the importance of being your own person. If you try to be somebody you are not, you will not come across as genuine to the client, and that can hinder the relationship.

For McCurdy, whose clients are financial advisers and wealth managers, the key is to really understand what they need.

‘It’s very important to have a timely and appropriate conversation with a client.  The vast majority of the financial advisers and wealth managers that I deal with, they’re not just building an asset management portfolio, they’re running a business, they’re seeing their own clients, they’ve got staff to manage and so forth.  So, the most important thing for me is to understand that the be-all and end-all is not speaking to their local bond guy, but they may need to be able to do that at some stage.’

‘If the pandemic had happened 10 years ago, I don’t know how we’d have coped’

Keith Mackie, Director, Acumen Financial Planning

Family ties

What does money mean to you? Advisers agree that this is one of the first questions they ask new clients. It helps not only to understand a client’s goals, but also how a family thinks about money overall.

‘It’s very important to find out a family’s dynamics. I go right back to the basics and find out more about their family, their upbringing,’ says Mackie.

Mackie believes it is also important to encourage clients to speak about money in the family. Even if the children do not know everything, they need to know some details about money matters. As part of this, the firm is asking adult children of clients to join so they are aware of financial advice requirements earlier on in their lives. Acumen is also currently working on a digital strategy, to be launched soon, that according to Mackie, will help the firm engage with younger clients.

In Libberton’s opinion, while trying to involve the younger generation is crucial, it is also important to remember that sometimes, you might not be the right fit for the next generation. That’s why he says advisers ‘have to do as much as we can for the clients at the moment’.

He adds: ‘When we see new clients, we’ve moved away from, let’s discuss pensions or your ISA. It is about understanding why are you here in front of me today, what’s driven you to this meeting?  How can I help you?  I just like to sit back and listen. I try my best just to be as quiet as possible and let them open up.’

That is particularly important in challenging situations, such as when dealing with ‘blended families’ according to Oliver. If people are on their second or third marriages and the interests of a spouse are not aligned with the children from a previous marriage, that can bring its own complexities, says Oliver. Another difficult situation is when advisers are brought on in the last minute when there are already problems that need to be solved.

‘I’ve been involved with one case where IHT had never been discussed,’ Oliver recalls. ‘[They were] elderly parents, one of them in particular clearly had a shortened life expectancy and for the first time ever, it became apparent that the children had been advanced vastly different sums of money and that was quite an interesting meeting to be involved in.

‘One of the children had been given a six figure sum more than the other two, but the ability to have that openly discussed means that now, everybody’s interests are aligned, and I was able to facilitate that and avoid World War III.’

Seeking financial advice

All the advisers have ways of establishing new relationships, particularly through referrals, but one of the main challenges in financial advice is still making people who have never taken advice see the value in it.

So how can advisers encourage more people to seek out their services?

‘As financial planners, we can think about telling stories to our friends and to our colleagues about how we are helping families out. Stories go a long way to help people understand the concept of financial planning,’ suggests Libberton. ‘There’s also good work that the Personal Finance Society are doing to get into schools to try and raise awareness of what the issues are around personal financial planning, but it’s quite an emotive subject and people don’t often open up and discuss financial planning. It’s a very personal subject.’

According to Open Money’s 2020 UK Advice Gap Report, the need for accessible and affordable advice has never been greater. There are some 20.9 million UK adults who would potentially benefit from advice yet are unable to access it.

‘The advice gap is very difficult to deal with,’ Mackie admits. ‘If you’re doing a couple’s inheritance tax planning and they’re gifting to children, do we know the children, do we see the children?  Should we see the children? Absolutely, we should, but how do we make those clients profitable?’

Sam Wealth’s Oliver has seen the value of accessing financial advice at an early age. He remembers his father, who took early retirement, meet with an adviser. The advice was paid for by commission.

‘The guy gave him the benefit of his experience. He was probably quite well paid, but I know that because of that advice, my mum and dad were better off,’ he explains. ‘Whereas now, those relatively modest sums are maybe priced out of the market and that’s probably a bigger issue. Some of these clients we’re just not going to deal with day-to-day, but actually people do need to take quality advice.’

While advisers do believe that technology can help address some of these issues, there are still people who need advice but a digital solution might not be appropriate.

‘The point about commission is very valid,’ says Hendry. ‘That was a great way to provide advice in a way that probably, wasn’t paid for, but was.’

‘The key is not to talk and not to go straight to solutions but to listen, and that is something I’ve learned in 20-odd years’

Daniel Oliver, Partner, Sam Wealth

Looking ahead

The Covid-19 pandemic has clearly impacted financial advice, as it has many other industries. With the increasing use of technology creating new opportunities to interact with clients, business has changed for good.

‘It won’t take away from the face-to-face meetings, I just don’t think that you will have to have them as often or you will have to have them as numerous as you may have done in the past,’ points out McCurdy.

But Hendry warns that so far, because everyone has gone into lockdown at the same time, it has been easier to adapt to the new environment.

‘It’ll be interesting to see how, once we start getting back to a bit more of a norm, that then translates into whether we’re still able to do this kind of stuff.  I hope we can, but that might be more difficult because the availability might not be there.’