Pandemic highlighted need for advisers to have face-to-face relationships with clients

Though the COVID-19 pandemic forced financial advisers to form a digital relationship with the clients through different outlets such as Zoom, the “face-to-face” interaction cannot be abandoned, according to the head of a major financial services company.

On a recent episode of the ifa Show podcast, ClearView managing director Simon Swanson said that though there are obvious benefits to a digital relationship, the “true value of advice” comes through the traditional interactions.

“If you want to sit down and truly understand the needs and aspirations of clients, I think that is a face-to-face conversation. And dare I say, normally that’s sitting down with a family, sitting down with partner, etc and actually having that conversation,” Mr Swanson said.

“I just know from personal experience, my knowledge of what’s going on in the market, dropped significantly through COVID because I was not talking to people face-to-face. You can’t have the same conversation for a Zoom meeting or for a Teams meeting, that you can face-to-face. And I think the true value of advice comes out in that face-to-face conversation.”

Mr Swanson’s comments come after Morningstar Investment Management issued a white paper in May which looked at the adviser-client relationship and what makes someone trust a financial adviser, outlining that “the best-interest standard is paramount”. 

“One attribute clearly rises above the rest: ‘When my adviser acts in my best interest.’ The overwhelming support for this attribute reiterates the importance of the fiduciary standard in advising,” the paper read.

Morningstar said it found that “trust, delegation and recommendations” came from cognitive-based actions, such as expertise and communication over affective-based actions such as concern and integrity.

“Our findings indicate that a person’s willingness to trust, delegate, and recommend an adviser likely has the same underlying drivers, as evident by the similarities between the average ranking of attributes,” Morningstar said.

On the same episode of the podcast, Mr Swanson boldly predicted that the number of advisers will increase significantly in the coming years.

Though adviser numbers are currently tipped to drop to 13,000 by the end of 2023, the ClearView head predicted it will increase to about 25,000 over the next 10 to 15 years.

Listen to the full podcast with Mr Swanson here.

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.