Will 2021 be better for advisers?
2020 has been a year like no other. It has created unexpected and unique challenges for financial advisers in terms of the daily running of your business, interacting with clients and growing your business. There was no clue coming into 2020 that it was going to be a year less ordinary…
In looking at the prospects for 2021, I had a number of conversations with advisers about their outlook and prospects for the year ahead. These were hearteningly positive conversations, most advisers that I spoke to are very optimistic about 2021. This optimism is based on a number of factors.
There’s bound to be less upheaval…
Of course there is no guarantee of this, but if we have an event as significant for the whole world as covid-19, we can probably all throw our hats at it! We are in the midst of a once in a generation event… and advisers are still standing. In fact many report that their income has not been particularly badly impacted in 2020, a good place to be as we survey the decimation of the economy as a whole.
It’s important to remember though that this is not just down to good fortune, it is also an outcome of your planned and well-executed shift in income model away from upfront commission towards a recurring income basis.
And let’s not forget that finally it looks like there are effective vaccines on the way.
Your investment advice is well placed
Most of you consistently guide your clients away from trying to time markets and avoiding making short-term investment decisions. If ever this advice was put to the test, this was the year. A 34% drop in markets as a result of covid and huge uncertainty around the US elections certainly tested the mettle of investors. Telling your clients to stick to the plan and avoid short-term noise paid off in spades. Markets were up 60% from their low point in March to mid-November and staying invested through the US elections resulted in a 9% gain over the following two weeks. Those investors who baled into cash at the low points will rue those expensive decisions.
As we enter 2021 and we see the uncertainty arising over Brexit, what will your advice be now? I know what I plan on doing with my investments… I won’t touch them or even look at them again for a few months.
Clients will need your help more than ever
There are a lot of people very badly impacted by covid. They have had a very difficult year and their businesses have been severely impacted, for many their doors have been shut. Some will never reopen or fully recover. For these people, their financial plans are very compromised, and a lot of careful thought and expert guidance is needed in relation to investment and retirement plans. Your calming wisdom and experience is needed now more than ever.
Your clients need help in revising their plans, looking at different scenarios and resetting some of their expectations for the future. They need your honest appraisal of their situation and your best advice – no matter how hard this may be for them to hear. And then you can help them plot the best route forward and build back their confidence in their financial future.
Your processes have likely improved
One of the big advantages of the sudden shift to remote working earlier this year was the need to very quickly develop new and smoother business practices. One year ago, how many of you were able to effectively carry out meetings online, use digital signatures and share files and workflows with colleagues via the cloud? Also so many of you are now so much further along in terms of using social media, communicating more regularly with existing clients and actually delivering an enhanced client proposition. Your business is operationally stronger going into 2021 than you were entering this current year.
You’ve an alternative way of working
This time last year, very few were thinking about ever working remotely. Now we’re all experts in it! Some of you love the flexibility it offers, and the commuting time saved. For many it has resulted in a much better work/life balance. Many of you will retain it on a part-time basis in the future, even when a full return to the office is possible.
While it definitely suits some people better than others, at least now everyone knows it is possible and knows what is needed to work effectively at home. At the very least, it’s an additional work option for you going forwards.
2020 is almost done, it was a year like no other, but ultimately was not too damaging for many financial advisers. All of the signs point to a calmer 2021 that offers great potential for you.