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The impact of lockdown on your business

The impact of the pandemic will be felt for many years to come. It’s affected us in ways we may yet be unable to understand. From a business perspective, the census showed there were three main areas impacting your business both positively and negatively: employees, financials and clients.

Select a region on the map to see results at regional level.

Northern Ireland excluded due to an insufficient number of responses

Our firm ran online client meetings prior to lockdown

Most clients will return to full face-to-face advice post-lockdown

How would you rate the overall impact of lockdown on your business financially?

If Covid-19 was eradicated tomorrow, how would you split your time between remote working and being in the office?

Pre-lockdown

Prior to lockdown, a significant proportion of Nucleus users were already exploring alternatives to face-to-face advice and conducted online client meetings. This rocketed as lockdown restrictions were introduced, but for many the move to online working would’ve been an easier transition (although not on the scale seen).

Our firm ran online client meetings prior to lockdown…

During lockdown

Lockdown of course meant offices were closed. Despite lessening of restrictions over the summer and the subsequent return to lockdown after Christmas, eight out of ten users say all or nearly all employees have worked remotely since March 2020.

Since March 2020, roughly what proportion of your staff still in employment have worked remotely?

Staff factors

Has your business taken any of the following measures during lockdown?

The financial impact of lockdown had clear implications with firms turning to government help to ensure survival. 50% of responders work with firms that furloughed staff, 10% saw staff redundancies and 10% saw a reduction in salary or bonuses. Clearly any reduction in staff is a last resort, is upsetting for those within the business and can disrupt the natural flow of working (albeit nothing was natural over lockdown). This isn’t a decision anyone would’ve taken lightly.

Some firms (30%) took the opportunity to bring in more staff, and some turned to outsourced solutions (compliance or paraplanning) to help keep things moving for clients.

Financial factors

Has your business taken any of the following measures during lockdown?

There’s a big divide relating to the financial position many firms found themselves in, with around a third believing lockdown had a negative financial impact on their business. Only a small proportion of firms turned to government assistance (out-with furlough) or took out loans. Around two-thirds believe their business has been unaffected or has improved over lockdown, potentially as they embraced (and retained) a new way of working.

Client factors

By what channel was new client acquisition done across lockdown?

Of course, face-to-face interaction with clients or prospects was near impossible across much of the year. Unsurprisingly, the majority (87%) of new client acquisition was done online or mostly online. A quick look at comments in any of the trade press will confirm there are split camps about the merits of both approaches, with many believing the trusted relationship between adviser and client can only be achieved through a face-to-face approach. But there’s no doubt for some, the digital adviser model is the way ahead with no detriment to the client experience. This may be the type of approach they’ve dreamed of introducing, but never found the time or opportunity to research and implement.

What client measures has your business taken during lockdown?

Improved client experience

Many have embraced client webinars and alternative contact channels to ensure more frequent contact with clients.

Staying more closely connected with clients is likely to be particularly appreciated across these worrying times. And this increases trust. During early 2020, when many direct investors were trying to trade (and time) the market, around three quarters of Nucleus users said their clients made no change to their portfolios, demonstrating the value and benefit of an advised relationship.

Vulnerable clients

Lockdown meant an increased focus on vulnerable clients, with FCA research showing a significant increase in clients who could be classed as vulnerable.

The increased focus on digital engagement meant scams became more frequent and sophisticated, so it’s great to see nearly six out of ten firms increased communication to clients over this period. The FCA has committed to protecting vulnerable clients and rightly believe the financial consequences of Covid-19 will be around for years. They are clear firms should be doing more to prevent harm from scams, so this feels like a step in the right direction from many.

Beyond lockdown

Working patterns

Working patterns don’t look to be returning to 'normal' anytime soon. The desired approach looks to be a mix of remote and office-based working, with the average score being 6.12 out of 10 (0 being fully remote and 10 being a full return to the office).

However more than half (53%) wish to return to a more office-based working pattern. After a year+ of potentially solitary working from home, it’s easy to understand why.

A permanent change?

96% of responses state new technology and/or ways of working will remain in place, so the new way of working is here to stay.

That’s not to say there isn’t a place for face-to-face meetings – in reality, a lot of this will be driven by client demand (93% say clients will determine the mix of online vs face-to-face engagement).

Another interesting development from lockdown surrounds location. Eight out of ten responses showed geography is no longer a consideration and their firm will service clients from all over the UK. This approach may allow firms to widen their target market of clients but would be heavily reliant on the continuation of virtual client engagement.

Next… chapter two

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© Nucleus Financial Services Limited 2021

Nucleus Financial Services Limited is authorised and regulated by the Financial Conduct Authority, is registered in England with company number 05629686 and has its registered office at Elder House, St Georges Business Park, Brooklands Road, Weybridge, Surrey KT13 0TS. Please note that telephone calls may be recorded in order to monitor the quality of our customer service and for training purposes.