Forsyths principal and financial planner Julie Sherwood

Julie Sherwood, a principal adviser at Forsyths in Tamworth, says she’s noticed a trend in her conversations with clients in the last few weeks.

At the end of every phone call, the same sign-off gets repeated.

“Stay safe.”

It’s cottoned on, Sherwood says, “even with the oldies”.

The phrase is an indication of where advisers are right now and the timbre of conversations they are having with clients during the coronavirus crisis. Portfolios are a concern for clients, of course – which is to be expected during a significant market correction that has no apparent end in sight. But the fact that this crisis stems from a threat to our health and well-being makes it vastly different from the global financial crisis in 2009. This time it’s much more personal.

“Obviously there’s financial concern when clients call, but what they’re more concerned about is the fact that this is a health issue,” Sherwood says. “They’re asking me about my children and how we’re doing as a family.”

Sherwood reporting a much more personal nature to the discussions she’s having with clients makes sense. The impact of the virus goes beyond markets; despite three stimulus packages being announced by the government in response to the crisis, unemployment is rising rapidly and businesses are being shut down across an alarming array of sectors. Almost everyone has been deeply affected by this crisis, and while it has brought out the worst in some – lets hope the toilet paper panic is over – it’s also brought out the caring, nurturing side in many.

According to Phil Thompson, a principal adviser at Rise Financial in Canberra, the majority of his clients are more concerned about health matters than they are about their finances.

“At no point am I complacent that we’re through all of this, but I think it is a bit different from the GFC,” Thompson says. “Health has dominated people’s thinking rather than the investments.”

There are a few reasons clients would be less concerned about their finances than they were a decade ago. Advisers themselves have a sharper, more acute awareness of portfolio diversity and have positioned investments accordingly. They’ve also been diligent about coaching clients to refrain from reacting to a crisis by selling down their equities en masse. The chasm between advised and non-advised investors has never been starker – a point Sunsuper head of advice and retirement Anne Fuchs made clear last week.

Thompson’s clients have another reason to be relatively sanguine; predominantly Canberra-based public service workers, it’s likely their jobs are safer than most.

The overarching feeling from advisers, however, is that the nature of the crisis itself – a flu-like pandemic that threatens the health of our kids, partners and parents – has brought humanity to the fore.

“Most of them have been really sweet actually,” says Jordan Vaka, an adviser at Planning Solo in Melbourne.

Vaka says he’s noticed a stark difference in his client list, which is comprised of a core group of ongoing clients and a book of legacy or orphaned clients. The legacy clients are slightly prone to panic, he reports, but the main group refuse to fret.

“The ongoing are fantastic, sitting tight and really calm,” he says. “We touch on the portfolio and that’s about it, we don’t need to go into it too much.”

This core group of clients, Vaka says, have supplanted financial concern with personal warmth.

“They’re saying they don’t want to call us because they know we’re busy and they’re asking about us and how we’re doing,” he says. “It’s really lovely.”

Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning. Contact at [email protected]
One comment on “‘It’s more personal’: Why this crisis isn’t like the GFC”
  1. Avatar Jeremy Wright

    Trust and having your adviser to call when times or circumstances turn for the worse, has been the foundation of what advisers do for their clients for decades.
    To the regulators, fees were and still are their main focus, to the point of obsession, which has led us down this path, where now only select Australians have someone to turn to when they need help or guidance.
    It is coming to light now from research, though those of us in the advice community already knew, that advised clients are better prepared and suffer less anxiety when stuff happens.
    The long term cost to the millions of Australians who previously had an adviser and who are now lost in the wilderness, will be in the multi billions of dollars. The 1 cent in the dollar per annum to have an adviser, which the regulators saw as a fee for no service, is one cent in the dollar saved, though has now created millions of anxious and confused Australians, with no-one to turn to, facing losses and missed opportunities much higher than that, as they wander through what is an impenetrable maze of complexity and uncertainty.

Leave a comment