COVID-19 has helped revive the financial planning industry as the public awareness of the importance of professional advice has increased by 54% in the past 12 months, despite falling adviser numbers, according to a ClearView white paper.
According to its study “Fertile ground for an advice outbreak: How COVID-19 has changed the financial services landscape forever”, 56% of advisers reported higher client engagement in the past year while 42% posted an increase in client referrals. Also, a quarter of the surveyed advisers admitted that COVID-19 made it easier for them to talk to clients about taking out or renewing life insurance cover.
On top of this, the study found 20% of advised clients were experiencing significant temporary financial stress, further 14% experienced significant ongoing financial stress and 22% were dealing with mild stress.
As far as advisers’ skills were concerned, the data found that the importance of interpersonal and soft skills such as active listening, empathy and problem-solving to better support clients during difficult times were of a particular value.
The study also confirmed that 73% of clients would immediately contact their adviser if they had a severe injury or illness and 63% would immediately contact their adviser if they lost their job, as evidence of the strong, personal relationship advisers had with their clients.
“The COVID-19 experience has demonstrated that advice businesses need a proposition that is broad and flexible enough to meet their clients’ immediate needs as well as their long-term financial needs,” the paper’s co-author, Gerard Kerr, ClearView general manager for life insurance, said.
“In the past 12 to 18 months, we have seen advisers apply themselves to also help clients access relief measures, rent reductions and short-term life insurance premium waivers. As a result, many are riding a wave of positive consumer sentiment and increased demand.”
ClearView managing director Simon Swanson added that since the onset of COVID-19, advisers stepped up to provide additional support to their clients and long after this pandemic dissipate, more people would likely continue to seek advice.