Sentiment Low as Clients Face Pandemic Consequences

 

As part of our “Together Australia” campaign, we’ve reached out to thousands of advisers, asking them about their client’s biggest financial concerns in the midst of the Covid-19 pandemic. Perhaps not surprisingly, loss of income, cash flow, debt management, market volatility and uncertainty around investment performance are some of the key themes advisers have identified. In a sign of the depressive times Australians are experiencing, Advisers reported that over 60% of their clients expect to be worse off at the end this year compared to the start of 2020

The ongoing fallout from the Covid-19 pandemic has affected the types of enquiries advisers are receiving from their clients. Our latest survey sent out to thousands of advisers has revealed the key concerns of their clients. Adviser have identified a multitude of concerns raised by their clients with the top five issues raised as follows:

1. Loss of income / Cash Flow / Debt Management
2. Market Volatility / Investment Performance / Uncertainty
3. Job Security / Job-keeper / Redundancy
4. Access to Super
5. Health / Mental Health

The adviser feedback shows the range of concerns financial advisers are dealing with as a result of the pandemic. The effect of the economic downturn and the resulting under/unemployment was clearly evident in the responses, with loss of income and the related issues of cash flow and debt management high on the list of concerns. The continued market volatility has many people anxious about their investment performance with many advisers reporting inquiries about altering investment strategies and portfolio stability.

Other key worries included the amount of debt the country will be in as a result of the stimulus measures, effects of redundancy on insurances and superannuation, and questions around accessing superannuation early.

The reported fears over “health” and “mental health” highlight the fact that advisers do not only deal with their clients’ financial well-being but are also privy to their clients physical and emotional state. The in-depth connection that advisers have with many of their clients is one of the most under-appreciated facets of a financial advice relationship.

Our first chart shows that when asked about their client’s expectations for the future, just over 60% of clients said they expect to be worse off at the end of the year, and only 12% expected their financial position to improve.

The view further ahead was more encouraging, with 41% of clients expecting to be better off by the end of 2021, but still 1 in 5 were fearful that they would be worse off

Our survey also asked adviser whether they were willing to engage with new clients around the four new skillsets relating to our “Together Australia” campaign. Our second chart indicates the willingness of respondents to advise on the various topics being highlighted, along with advice in general in our campaign. We’re pleased to report nearly 3 out of 4 advisers would happily engage with new clients on at least one of these key issues.

We will be implementing a consumer sentiment / mood index of advised clients with the assistance of participating advisers in the weeks ahead, to help identify key clients concerns and areas where advisers might be able to help assuage particular concerns that are raised.

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