The coronavirus crisis has turned our lives and our habits upside down overnight this year. All of us, across the UK and the globe are observing and respecting strict social distancing guidelines.
But what has been the impact of all of this at one firm, Van der Meulen Associates in South Yorkshire? Here, financial adviser Serena van der Meulen kindly takes the time to share her thoughts and experience of living and working under lockdown. And please note: the crisis has, of course, been and remains fast-moving. All Serena’s comments were correct and given in good faith at the time of interview [2 April].
How has the crisis and lockdown disrupted you and your firm?
My office is from home anyway, so that has made life easier during this. No change there. The issues with the stock market falls are always very unpleasant when they happen. Obviously, because they have been linked with health fears, it has been a really unsettling time for people. Stock markets issues, of course, are one thing – but worrying about health and safety and worrying about my clients’ health and their safety is another thing entirely. It’s exhausting emotionally.
I have been helping my clients getting set up from home for online food shopping deliveries; likewise, with prescription deliveries. I have also been helping clients set up things like iPads, over the phone, so that they can speak to family members. All those kinds of things.
I am worried about my clients who are vulnerable and lonely and old and are poorly. It has been those personal things that I have been dealing with, as much as financial things.
Will there be a lasting impact, do you think, to the way we work?
I think people who have avoided technology in the past are more likely to embrace it now. And people hopefully will have their priorities more grounded and realise the importance of health, of family and of having quality-time. I know people who before this worked an 80-hour week in the office. Now they have time at home to spend with their children.
Hopefully, people will now know their neighbours a lot better, in communities, which I think is really important. Local businesses and shops are thriving in many ways, as people appreciate the value of a good local butchers or greengrocers and how they have really been coming through for people. I hope that continues going forward.
Can you compare this crisis to anything you have experienced before?
I think we have, markets-wise. The dot-com bubble from 2000 was brutal, but it was quite isolated in a sense. It didn’t have a wider public impact. I had also only been advising then for a few years, so what happened then was a new sensation. I wasn’t fully prepared and it was quite scary, but I was part of a big company, so I had more experienced advisers around me who could guide me.
With the banking crisis in 2008, it was about a lack of trust in the world at that time. You almost felt that people would never trust big institutions and banks again after that. People felt angry.
With this current crisis, although markets have been terrible, everything that has been happening makes perfect sense to people. The drops have been based on very genuine concerns. People understand why this is happening because of the very real threat of the coronavirus.
What conversations have you been having with clients, worried about their investments?
Conversations have totally depended on the client. Clients who are experienced have not been overly concerned, because they have seen and experienced market drops before. But clients who are less experienced and who have only been invested a few years – it doesn’t matter how many times you discuss volatility, loss, capacity for loss. All those things. Until they actually experience a market loss, it’s difficult, isn’t it?
You can have all those conversations with a client; you can show them all the stats and graphs; you can prepare and stress test as absolutely best you can; but until a client actually sees those physical drops in their portfolio, the emotions are never the same. It’s terrifying for a client. And we all knew there would be a drop in markets in 2020, but, of course, nobody knew the drops would be as dramatic as this, with these reasons behind them.
There are two types of emotions clients are currently experiencing: physical, at the losses in their portfolio, but also mentally, through wider fears about their health and their safety.
How has Dynamic Planner helped your firm during the lockdown?
Risk assessing a client – I always email them the questionnaires, so there’s never any need for paper. And all my fund research is completed in Dynamic Planner and exported straight into my back office system, ready for my paraplanner to pick up and begin working on. Those are the two key things I use Dynamic Planner for – I couldn’t run my business without it.
Where Dynamic Planner has been brilliant at the moment is, for example, if you are rebalancing a portfolio for a client. You can show where their portfolio or where a fund sits on the ‘Efficient frontier’, in relation to the risk and return of the benchmark asset allocation for each risk profile. That can be a really important visual for a client – priceless.