A growing number of clients are expected to see their financial circumstances change for the worse this year because of Covid-19 and its widespread impact, presenting one of the biggest challenges for advisers over the coming months.
UK unemployment has been climbing and is predicted to peak at 7.5 per cent when the furlough scheme comes to an end, with people from all demographics unfortunately impacted.
Advisers can play a key role in helping clients whose job circumstances may have changed to be able to adapt their financial plans.
As advisers, we’re in the business of growing wealth and we’re all used to having those ‘easy’ clients, whose annual review involves congratulating them for being on track to meeting their goals before sending them on their way.
Covid-19 has changed that. Not since 2008 have we seen a wave of redundancies like we are seeing now, and that was on a much smaller scale than this.
Lots of the people we are talking about here are going to be in that group, so what do you tell them when there’s suddenly a big red line through their plans? That calls for a whole new set of skills.
Cashflow modelling is the key to helping these clients move forward and keep their plans on track.
Cashflow modelling is the most practical tool advisers have at their disposal right now. It’s the only thing that will help clients truly understand how long they can cope without income before it’ll really start to impact their plan, helping map any potential financial impact now or in the future and enabling the client and financial adviser to adapt their strategy for any shortfall.
This is the absolute best thing we can do to comfort struggling clients right now, especially as true recovery is a long way off. While the Prime Minister’s roadmap out of lockdown provided real hope for the future, it is vital to take early action and help clients gain confidence in their financial future, regardless of what this may look like now.