How has Covid-19 affected finance advice?
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Diane FIsh and Phil Beck are Independent Financial Advisers with Smith & Pinching, Chartered Financial Planners, discussing financial advice during coronavirus.
In a departure from our normal Q&A column, this week we look at how financial advice is being delivered during the COVID-19 pandemic. We asked experts at Smith & Pinching how the crisis has affected their work.
Phil Beck: It really has been business almost as usual during lockdown. At Smith & Pinching we had the technology in place right from the start of lockdown so that we could meet with our clients either online over video calling or over the telephone. We are meeting clients face-to-face again now (at the time of writing – we’ll stop if the guidelines change!), but we are of course observing social distancing rules and wearing masks as needed.
Diane Fish: One of my specialist areas is mortgage advice and I did have lots of conversations with clients about their mortgage worries at the start of lockdown. Now I have clients wanting to take advantage of the Stamp Duty exemption to move house. Lockdown gave people the chance to think about their finances, so I’m also talking to clients about reviewing their mortgages to see if they can get a better deal.
Phil: Yes, I’ve found that clients are ready to review all aspects of their finances. Planning ahead for retirement is a priority for most people so pension investment is the area most often at the top of clients’ discussion list. Lockdown has changed some clients’ plans for the future – but in different ways. Some clients didn’t enjoy being at home all day and are determined to work longer but others are looking to bring retirement forward. Where we have a change of expected retirement date, we’ve often needed to adjust pension strategies to take account of the altered need.
Diane: COVID-19 has been a wake-up call for many people in terms of what protection plans they have in place if something stopped them earning an income. We’ve seen an increased awareness of income protection and critical illness insurance plans.
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Phil: The pandemic and the subsequent market volatility have also changed some people’s attitude to investment risk. Investment risk is something we discuss with clients at every review: it’s a critical factor in decisions about what investments are suitable for each individual investor.
Diane: For many older retirees, 2020 has been a time when they’ve re-assessed their lifestyle and general attitude to life. Many have spent very little while they’ve been shielded at home, but there is a real sense of making the most of life once we emerge from the crisis, or of ensuring that family members are financially secure. I’ve discussed various forms of later life borrowing with a number of clients.
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Phil: The most important point I’ve been making to clients is that financial planning is all about the long game. Markets may be turbulent in the short term but history shows us that they normally recover over time. If you have a sound financial plan, reviewed on a regular basis, then you should be able to meet your longer term objectives – but it is essential to keep everything under review.
Diane: Absolutely, Phil. At Smith & Pinching we believe that it is so important to know our clients well, to build a strong financial plan and to revisit it regularly to keep matters on track.
The value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested.
Your home may be repossessed if you do not keep up payments on your mortgage.
There will be a fee for the mortgage advice. The precise amount will depend upon your circumstances, and the type of lending taken. Smith & Pinching’s minimum advice fee is £700.
Any opinions expressed in this article do not constitute advice.
For more information please visit www.smith-pinching.co.uk