Guiding Your Clients Through Covid-19

As Covid-19 works its way around the globe, resulting in the UK entering into a stage of almost lockdown – financial services firms need to consider the potential impact which this may have on their customers and how they can continue to service them in a compliant and safe way.

Many financial services firms will have either enacted their business continuity plans (BCPs) and are now able to continue business as usual (although in loungewear from their kitchens rather than suits in the office), or have found that in a real-life scenario their BCP was ineffective. However, whilst having a BCP sets out what firms need to do in the event of a pandemic, your customers do not have BCPs of their own and some are now likely to be worried and concerned about their money (amongst many other things).

Keeping in touch with clients

As clients, and indeed most of us, are understandably going through a phase of worry and uncertainty about this pandemic, the most important thing to consider is how we keep our business going whilst retaining our service standards. With government guidelines changing daily, it has been hard for many to stay up to date with whether they can go to the shops, let alone what their finances are doing.

It has already led many of us to start looking at ways to continue working, looking after the children and how to still meet/talk to clients. There is lots of software out there which can help you remain in contact/see your customers and your colleagues – Skype, Zoom, MS Teams to list just a few. For some customers and advisers, conducting meetings via the Internet will be a foreign idea, however, it is a meeting form which based on the latest updates, we will all need to get used to.

Concerns we have heard from clients recently include how you can complete due diligence on a customer if they are remote. There are options for this, such as the use of third-party verification systems (i.e. Smart Search, World-Check) which allow the customer to upload a copy of their identity documents to you and then you’re able to verify them via a webcam call.

Other ways you can make it easier for customers to engage with you include offering them the facility to electronically sign documents online. This not only reduces the pressure on the postal service, but it also reduces the risk of inadvertent exposure through the use of physical mail.

As financial advisers, it is your role to ease our customer’s uncertainty with regards to their money wherever possible. Therefore, you should be prepared for questions such as “will the market recover?”, “you told me to invest into that fund and I have now lost 20% of my capital” and “should I withdraw from the markets and hold my capital as cash instead?” to name but a few. For many of us, we have already started having these conversations with customers either proactively contacting them through email or phone or reactively through customer contact.

Capacity for Loss

As part of your advice process, many of your customers will have already had their capacity for loss assessed. If this has been done thoroughly, then for many of your customers the falls and (small) rises in the markets over recent weeks are nothing to worry about, as both you and your customer know that they can afford to lose so much and that a market crash has been illustrated and considered. However, no one likes to see their investment portfolio shrink.

For anyone who you may currently be going through the advice process with, and have run capacity for loss a few weeks ago, before markets started to drop; you may want to consider re-visiting this and factor in their new portfolios / transfer values and how these lower values impact on their overall advice and investment choices.

Vulnerable Customers

For many vulnerable customers, they will be feeling especially vulnerable at present. Particularly, those who are in the high-risk category such as having a pre-existing medical condition, or are vulnerable owing to their age. As such, it is key that financial services firms identify those customers who fall under these categories and that we keep their circumstances in mind during any conversations we have with them.

You may want to contact any customers of which you are aware are vulnerable to have a conversation with them, and perhaps offer some reassurance where necessary.

Top tips on what you can do now…

  1. Consider your firm’s BCP – has it worked as expected? Are there areas which could be improved on?
  2. If you are still struggling to provide a continuous service to your clients, have a look at technology and software that can help you communicate and share documentation.
  3. Identify your vulnerable customers; are you able to offer them any additional support at this trying time?
  4. Review your capacity for loss models to ensure that it is highlighting to customers the potential impact of market upheaval in global events such as this pandemic.
  5. Most importantly, stay safe.
Tom Richmond – Technical Consultant