The coronavirus crisis has turned our lives and habits upside down, almost overnight, in 2020. All of us, across the UK and globally are coping and managing the best we can.
What has been the impact at Lifetime Connect, based in Hertfordshire? Here, Wealth Director David Owen kindly takes time to speak and share his thoughts and experience. And please note: the ongoing coronavirus crisis has been, of course, very fast-moving. All David’s comments were correct and given in good faith at the time of interview [8 April].
How has the crisis disrupted you and your firm?
Rather than disrupted, I would say it has actually enabled us as a business. We’ve not hit the pause button – we’ve carried on, just with a different rhythm and routine.
Where our clients were busy before with their retirement and, like a lot of us, dashing all over the place – tying them down could be difficult. But now largely all clients are contactable and what we’re doing is having shorter, but more meaningful conversations than what we were before.
Will there be a lasting impact, do you think, from this to the way we work?
I’m an optimist, so I’d like to say, ‘Yes’. However, we are a funny species, humans, so I do have a horrible feeling that we will go back to driving 2hr to attend a 1hr meeting and then 2hr back.
Hopefully, that won’t happen as much in future and we will say, ‘All that driving about was crazy; we were polluting the planet; and it was unnecessary. Look at how much better off financially we are by not paying so much for petrol each month?’
Hopefully, some advisers will embrace this change and carry on holding client meetings remotely in future and once we start to get up to speed and move away from things like having to have wet signatures, for example, we can be in a position to work more effectively.
Can you compare this crisis to anything you have experienced before?
Honestly? No. I first began working in the profession in 1987, so I remember Black Monday and everything which has happened since then. Most of us remember of course 2008 and the financial crisis, which people have been talking a lot about lately, for obvious reasons.
If you remember the press commentary of the time – ‘The end of capitalism’ and all that. In 2008, emotionally we moved from first learning of the crisis to feeling angry about it very, very quickly. With this current crisis, there was a lot of denial I think initially. There were stages of beliefs where first the virus was only in China; then it only really affected older people; then it was Italy; then here that we can keep working in the office; and so on.
Of course, 2008 was about losing money, but this is about staying alive and about people you know who very sadly are dying. It’s about survival, community and about caring for people. That’s why this current virus is different.
What conversations have you been having with clients, worried about their portfolio?
We have, as a business, been doing lots of coaching with advisers before all this and they, in turn, have been coaching their clients. And it’s been a great story, hasn’t it? It’s been a long bull market and funds and clients have done very well. We have been warning that, at some point in the future, things will take a downturn, but obviously we weren’t expecting anything quite like this.
We have been talking through with clients the impact of markets in the context of their own situation. For example, using cash flow modelling in Dynamic Planner, you are able to say that a pension that was worth say £800,000 is now worth £620,000. But if you retired today and you drew an income, it is only worth £1,600 less a year, so you can show that the impact, in reality, is not as bad as first feared. The client then feels better and of course you can also say that markets will bounce back at some point.
At Lifetime, we have a lot of city clients, who have been investing, which is really interesting, because they are seeing the value in the sayings like, ‘Be brave, when people are fearful’.
Over the 53 advisers that we have, I have only heard of three cases where clients have wanted to move to more secure assets and of those, only one executed and two perhaps saw sense. When you consider you’re talking about £1bn of assets under management that we have, that’s pretty good.
How is Dynamic Planner helping your firm operate remotely, at the moment?
The risk profiling tool in Dynamic Planner is incredibly powerful, allowing you to talk about a client’s investor experience, their attitude to risk and their capacity for loss. To be able to recheck, at the moment, their attitude to risk and capacity for loss is great. You can have the conversation with the client, ‘You’re coming out as a risk profile 7, but can you really afford to be? From what you’re telling me, it appears you can; or you can’t’. You can then take an action.
Using something like Zoom, you can go through the risk questionnaire with a client and share your screen and analysis like the ‘efficient frontier’ to check that they are comfortable. It’s absolutely brilliant.
Before, we were producing Dynamic Planner’s Client Review report and presenting face-to-face with the client – now, we can share the report live, in real-time on Zoom and talk it through, particularly the page, ‘Your review outcome and next steps’. You can look at an action, like moving cash into an ISA and say, ‘Why not get it done now, while we have the chance?’ We’re able to do that, which again has been brilliant.
Once upon a time with technology, you had to complete a load of training before you started using it. That idea can still be anchored in people’s minds. But if you think of things like Zoom and Microsoft Teams, you don’t really need training. They’re intuitive to use, aren’t they? It’s more about curiosity now, in that sense. If you’re curious, you will use technology – and Dynamic Planner falls into that camp, I think.
The great thing about Dynamic Planner is it’s very easy to screenshare; it’s very easy to navigate; you can’t really go wrong; and the Client Review report – you can’t really undersell it. It’s probably the greatest step forward in financial planning in a while, since cash flow modelling – allowing advisers to articulate to clients their value, in a stylish way that appears like it has been completed by a team of 10 people, who worked for hours to create it.
To be able to create a presentable report for a client, in a relatively short period of time; to share it with them via your screen; then to give the client the context and financial planning tips is brilliant.
We write to clients, in advance of a review or an annual advice meeting, as we call it, to get an update on their situation and if their goals have changed etc. We then get that information back and update the fact find for the client; we get latest valuations for the client in Dynamic Planner; then, once they are updated, the paraplanner team can create reports for clients and share them with advisers. You can also beautifully style and personalise reports in Dynamic Planner and they look incredible. The adviser can pick up, have the report ready to present and share in the meeting and then complete any actions post-meeting.
The administration cost for us as a business for all that works out at about £180, which for 100 clients equals £18,000 a year. Yes, that is down to having a fantastic admin team, but Dynamic Planner and our CRM system 360 Dotnet enables us to achieve that.
If an adviser is working on their own, Dynamic Planner’s Client Review is still a huge timesaver, compared to how they were working before. They can create a report in about 15 minutes, once they are used to the system. How long would have that have taken them before? Hours – around half a day probably.