In this article we reflect on the events of the past year and share the results of a recent client survey, designed to understand how your financial plans may have been impacted by the Coronavirus pandemic and what is therefore top-of-mind for you.
Tuesday 23rd March, marked the 12-month anniversary of the UK going into its first national lockdown as a result of soaring Covid-19 infection rates and hospital admissions. One year on and the world is, in so many ways, a very different place.
We’ve adapted to a multitude of ‘new normal’ ways of working, interacting with one another and even how we spend our free time. From video calls, facemasks and social distancing, to exploring more of our local green spaces and staying at home more than we perhaps ever thought we would. No one could ever have imagined how different life would become in the space of just one year. Some may even go as far as to say that their whole outlook on life has changed, including the future they plan for themselves and their loved ones.
In order to try and better understand how the past year may have impacted your plans from a financial point of view, and any worries or concerns you may have, we recently invited you to participate in a survey within our ‘Stay in Touch’ e-newsletter, about the effects of the pandemic on your financial plans.
In this article, we share with you the top three things that you told us were on your mind as a result of the past 12 months, together with some examples of how our Independent Financial Advisers and support teams have assisted clients with their financial plans throughout the crisis.
The top three things you told us were on your mind from a financial planning point of view as a result of the pandemic:
- Investment performance
- Helping family and friends financially
- Changing retirement plans
Unsurprisingly investment performance has been of particular interest for our clients over the past 12 months, with nearly 90% of you who responded to the client survey saying that investment performance was top of mind for you.
Concerns have centred around potential changes in the value of client portfolios due to the early volatility of market conditions and hypotheses around any resulting impact on future plans. Our investment team advocates a well-balanced, diversified approach to investing which, in challenging market conditions, can certainly help weather the storm. History has also shown that markets always appear to recover with an upward trajectory in the long term. This is why we advise clients to take a medium to longer term outlook, to seek reassurance from their Adviser and to not do anything rash.
Investment Director Steven Lloyd, comments: “As we look back to this time last year, investors were shaken by the instant market drop as the stock markets went into shock. At the time, our message was to try to hold firm, stick with long term financial plans and have faith in tried and tested risk mitigation, in the form of portfolio diversification. Many people did not expect the recovery in financial assets to be quite as strong as it has been. Coincidentally, the anniversary of lockdown being introduced also marks a year since the bottom of the equity market and returns have been exceptionally strong since.”
We have sought to reassure clients with regular updates on their investments’ performance during these unprecedented times. Our bi-weekly market update reports from Investment Director Steven Lloyd have been especially popular throughout the course of the past year and are one way that we have been supporting our clients during the pandemic, as have the videos providing regular market insights.
In staying in touch however, there is nothing more important than contact and reassurance from your financial adviser, and we’re pleased that all of our advisers remained highly active and contacted clients all the way through the last year by video and phone instead of the usual face to face meetings.
Mark Rodgers, Independent Financial Adviser, Ascot Lloyd has shared with us a client review he received late last year.
“We were looking to make informed decisions about the best way to invest our funds for the future, particularly around pensions, retirement income and to a lesser extent inheritance. Mark has been very helpful; he is clearly very knowledgeable and has been able to give us good advice.”
Mark Rodgers comments: “Access to advice has been more important than ever during this recent time of unprecedented change with all of us requiring support and guidance to ease our concerns and have our questions answered. I am proud to have continued to deliver ongoing advice and service throughout the last year and as a business, we have embraced new methods of delivery and adapted processes despite the challenges faced.”
Helping family and friends financially
Nearly 40% of you who responded to the survey said you were needing to think about helping family or friends as a result of the pandemic. This could be for a variety of reasons such as an unexpected redundancy, a business that’s struggling financially, wanting to help a younger relative on to the property ladder to take advantage of government’s stamp duty holiday, or concerns about the longer-term value of an estate being passed on.
The coronavirus crisis has sparked an interest in the release of funds from wealth portfolios and we have worked with a number of clients to find the most efficient way of doing so, based on individual circumstances, without forfeiting later life financial security.
Sheetal Radia, Independent Financial Adviser at Ascot Lloyd, helped one of his retired clients support his daughter whose hard-earned business, a coffee shop, was badly affected when the pandemic hit.
With the business on the verge of collapse, Sheetal’s client was understandably anxious for his daughter and keen to help her find the funds she needed to keep her business afloat. But he wasn’t sure how. The widower had worked and planned all of his life for a safe and secure future for himself and his family. However, his investments were part of his retirement income. And whilst he owned his beautiful home in Buckinghamshire, he had planned to leave the property to his children to provide for their future.
Having worked closely with Sheetal, his Independent Financial Adviser for some time, the client knew exactly where to turn for help. Sheetal organised for Marie, one of our mortgage specialists, to help release some of the equity from the family home to support his daughter when she needed it most. Working with his solicitor, Sheetal also helped his client adjust his will to recognise his early gift to his daughter.
Thankfully by doing things as quickly as possible and taking advice, Sheetal’s client was able to remain in his home and minimise any additional cost like further tax. He could carry on enjoying his retirement and relax knowing he had done everything he could for his family, now and in the future.
Changing retirement plans
The worldwide pandemic has prompted some people to re-evaluate how they spend their time and may have even helped highlight what is important to them. In a recent survey we asked how many of you were considering changing your retirement plans as a result of the crisis and nearly 30% of you who responded said you were.
Our clients often come to us looking for reassurance that they have a retirement plan which will maintain their lifestyle and independence throughout their retirement years. As financial advisers, it’s our role to help you work out how much you will need, how much you will have and, if there is a shortfall, how to make up the difference between now and your retirement days. Of course, things may change over time, so regular reviews can make sure you stay one step ahead and keep your plan on track, even in a pandemic.
Aaron White, Independent Financial Adviser, reflects over the last 12 months and comments that many of his clients have reassessed their work life balance and become motivated to retire earlier than previously planned. In some unfortunate cases this has been due to forced redundancy, but in other more positive examples, the pandemic has presented opportunities for the sale of their business or voluntary redundancy. Using cash modelling software (during a remote shared-screen meeting) Aaron creates and illustrates multiple retirement plans to help make that big decision.
Aaron recently worked with a client who was heading towards retirement age and was reassessing their work-life balance. They wanted to know if they could afford to retire early rather than looking for more work in their late fifties. By working with the client to plan ahead, using tools that help calculate how much income might be needed in different scenarios, Aaron was able to present different options to the client and map out what they needed, in order to achieve their goals. Read the full article here.
Continuing to give clients peace of mind
With our tentative route to normality mapped out and almost 28 million people in the UK having received at least one dose of a coronavirus vaccine to date*, there does seem to be a ray of light at the end of the tunnel. It does however seem that some degree of Covid uncertainty is here to stay, at least for the short to medium term.
With this in mind, the value of a close relationship with your Adviser, who is well-versed in your personal circumstances and able to anticipate any changes to your personal financial plans at an early stage, is greater than ever. Lightening the weight of financial stresses is crucial when many continue to feel profound uncertainty and vulnerability in all areas of their lives.
We’d like to thank our clients for your continued custom throughout the course of the past year. We hope that we have been and can continue to be of support to you, especially during these difficult times.
If you have any questions about how we can help with your financial plan or any change in circumstances you have experienced or may experience, please do get in touch.