The personal aspect of the COVID-19 pandemic has highlighted the positives of receiving financial advice, after the sector faced scrutiny in the Royal Commission.
In a roundtable, Shannon Bernasconi, managing director of WealthO2, said people who had received financial advice tended to fare better during the pandemic and avoided making risky decisions.
“We haven’t seen a massive panic or people moving into cash, it was less of a panic and more of a ‘tilt’ to portfolios. Only four people enquired about accessing their super which is less than we had expected,” she said.
“COVID-19 is much more of a personal journey than the Global Financial Crisis [GFC], people are wondering what will happen to their assets and to their rental property rather than just wondering about the economic impact. This has meant the role of advice has been more focused than it would have been during the GFC.”
This was a boost for advisers as they had seen their reputation take a hit after the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry which concluded last year. Advisers were also exiting the industry after increased regulatory burden and the need to pass the exam set by Financial Advice Standards and Ethics Authority (FASEA).
“Advice is more valued in these type of circumstance which has helped the community given all the scrutiny from the Royal Commission. Those people who have had advice had done better, advised clients have done really well,” she said.
As to how advisers were working in this ‘new normal’ environment, Bernasconi said advisers had embraced the digital modes of communication available with remote working. This included the use of digital signatures and video meetings, many of which advisers were using for the first time.
“It took two weeks for advisers to settle into a digital environment and it was a bit slow at first but there has been a rapid increase in the last few weeks,” Bernasconi said.
“A few of them have said they see digital as the way of the future and are likely to continue doing 15-minute reviews digitally and then have an annual review in person. It is a new way of engaging with clients and it is encouraging they are still managing to make contact with them.”