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From the frontlines: Financial planning through a crisis

Zacary Leeson

COVID-19 was the perfect storm that reaffirmed our practice’s core value proposition and allowed us to build deeper relationships with new and existing clients.

When the COVID-19 pandemic hit Australia in early March, there were a number of operational changes we needed to make as a business. Fortunately, we are all technologically savvy. Within three or four days of shutting the office we were all up and running and working from home.

Microsoft Teams replaced the boardroom and we saw the significant benefits of being a largely cloud-based financial planning practice. You certainly miss the water cooler chat and the new ideas that come from working collaboratively. On the upside, you become much more efficient and can service more clients.

Supporting clients through the storm

The hours were incredibly demanding over March and April. As a practice we are very involved with our clients; we know them very well and speak to them regularly. During that two-month period over March and April, that relationship really intensified. A large part of that was reassuring clients to stay invested and helping them understand that they would come through the other side.

An important message we were relaying to clients was that this is a short-term health crisis, not a long-term financial crisis. The value we added was keeping clients invested. We have since seen the market come roaring back.

The opening line from existing clients was always, ‘What are markets doing? I’ve seen something on the news. Is it as bad as it seems?’

We position clients to achieve the most diversified option at the best price. We don’t know what the markets are going to do in the short term. We are confident what they will do in the long term. We never sold ourselves on being able to predict the market. If you do that, you get yourself into trouble when things like COVID-19 hit. One of the essential values of financial advice is having those conversations with clients in that time of need. Reassuring clients that they will be fine and bringing them back to those earlier discussions we had about their strategy.

New clients and government stimulus

The COVID-19 pandemic has almost been a perfect storm for financial planners. Those that didn’t have a planner were looking for advice and those that had a planner were questioning if they had the right planner to guide them through this event.

We had record months of new client inquiries and engagements because people were looking for that support. We were able to provide that help.

Of our small business clients, some were hit hard and many of them went on JobKeeper. We have close relationships with their accountants and have been working with them to keep those clients in the best position they can be during this challenging period.

Key learnings from COVID-19

We realised that we were very well-positioned with a fixed fee structure. Planners with percentage-based fees would obviously have taken a revenue hit with the market decline.

The strong relationships with our clients cushioned us. We weren’t selling ourselves on investment expertise. If anything, COVID-19 showed us that we were on the right path.

It also forced us to realise that we can work form home and be more flexible with hours. The traditional work week has changed. As long as we are looking after our clients, we can be much more flexible with our hours and remote working.

Ultimately, the extraordinary events of 2020 so far have allowed us to forge stronger, deeper relationships with clients. We are grateful for the experience and glad that our clients have come through the other side.

Zacary Leeson, HPH Solutions