COVID-19 ramps up client interest in advice

Wealth management group ClearView’s latest paper, Fertile ground for an advice outbreak: How COVID-19 has changed the financial services landscape forever, claims that public awareness on the importance of advice has increased by 54 per cent in the last year.

It notes that 56 per cent of advisers are reporting higher client engagement over the past 12 months and a 42 per cent increase in client referrals.

ClearView general manager for life insurance and paper co-author, Gerard Kerr, said the findings reflect the impact of the COVID-19 pandemic on Australians and the advice sector and that it should “force a rethink of [advisers’] value proposition and how it is delivered”.

“The COVID-19 experience has demonstrated that advice businesses need a proposition that is broad and flexible enough to meet their clients’ immediate needs as well as their long-term financial needs,” Mr Kerr said.

“In the past 12 to 18 months, we have seen advisers apply themselves to also help clients access relief measures, rent reductions and short-term life insurance premium waivers.

“As a result, many are riding a wave of positive consumer sentiment and increased demand.”

The paper also identifies behaviours of advised clients throughout the lockdown and what can be attributed to the renewed interest in advice. It states that 20 per cent of advised clients are currently experiencing significant temporary financial stress, 14 per cent are experiencing significant ongoing financial stress and 22 per cent are dealing with mild stress.

Further to this, 73 per cent of clients said they would contact their adviser if they had a severe injury or illness, while 63 per cent said they would seek support from their adviser if they lost their job.

ClearView managing director Simon Swanson said the data highlighted the importance of advisers needing to engage and provide support for their clients and practise “soft skills” like active listening and problem-solving.

“Higher education and training standards are critical for rebuilding trust in financial services and strengthening consumer protections, however, we need to foster essential soft skills too,” Mr Swanson said.

“In addition to ordinary challenges related to health, relationships and work, Australians have battled natural disasters including severe bushfires, drought and floods in the past couple of years, amidst a global pandemic.”

“During this time, advisers have listened to people talk at length about their fears and concerns, fielding calls around the clock from anxious, depressed and emotional clients.”

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.