Demand for good advice is on the money

10th April 2021

By David Prosser

The past year has presented challenges in all walks of life, and personal finances are no exception. It’s unsurprising, then, that expert advice is more sought after than ever – as leading review site VouchedFor has found

Has the Covid-19 pandemic prompted you to think more carefully about your personal finances?

If so, you are far from alone - a recent study carried out by consultancy firm EY found that 55 per cent of Britons are considering anew how to protect and improve their financial wellbeing in light of the crisis.

For some people, the driver has been negative financial impacts from Covid-19. They may have lost their job or seen their income fall, for example. But that doesn’t tell the whole story. Others have found their finances improving over the past 12 months because, while their income has not been affected by the pandemic, their outgoings have fallen as travel costs and opportunities for discretionary spending have disappeared.

Whatever their circumstances, as households try to get on top of their finances they are seeking professional help. VouchedFor, the service that helps people find, rate and review financial advisers and other professionals in their area, reports that this kind of support has never been more valued. One indicator of demand has been the number of users leaving five-star reviews of their advisers on the VouchedFor website, which rose by 65 per cent during 2020.

“We have never been busier,” says Ian Pickford, head of financial advice at Mazars Financial Planning. “Any kind of disturbance causes uncertainty, and in times of uncertainty people naturally look at their personal circumstances. Covid-19 has made everyone realise they need to plan their finances carefully and think things through.”

In some cases clients have had immediate issues that they wanted help with. Jane Hodges, managing director of Money Honey Financial Planning, says many got in touch when the stock market lost a third of its value in a few short weeks as the pandemic hit the UK.

“It was easy to panic so we wanted to stop people moving to cash in after the crash had already happened,” she recalls. “We subsequently saw a new client who had previously done exactly that, and lost 25 per cent of their pension fund.” By contrast, savers and investors who sat tight have seen the markets make a recovery.

Protection products, such as life and health insurance,have been another important area of focus, says Jane, with the pandemic having concentrated minds on how important it is to ensure loved ones are properly safeguarded. “We have helped lots of clients put cover in place during a very difficult time,” she says. “People often put this sort of thing off but now they are keen to act.”

Setul Mehta, head of operations at financial and mortgage advice network The Openwork Partnership, has also been busy fielding questions from clients about protection. “Some are eager to improve their insurance cover,” he says. “But we’ve also talked to lots of people who are struggling financially and wondering whether to cancel policies because they need the money they’re currently spending on premiums each month.”

In such cases, Setul’s firm has tried to help clients find other ways to make savings so that they are able to keep crucial protection policies going. “This is an example of where it might make sense to consider taking a payment holiday on their mortgage,” he says. “All lenders agreed to allow borrowers struggling financially during the pandemic to suspend repayments for up to six months.”

At the other end of the spectrum, Setul reports lots of enquiries from potential homebuyers stemming from the decision by the chancellor, Rishi Sunak, to waive stamp duty on property purchases and keep the housing market moving.

“Some interest is from those who have been able to save more and see property as an opportunity to invest, so we’ve talked to them about whether this is the best way to use their extra wealth,” Setul says. The Bank of England has estimated that savers are sitting on an extra £150 billion amassed during the crisis. Setul’s firm has also helped clients who were remortgaging or moving house and had run into problems with lenders because of Covid-19. Many mortgage providers are anxious about lending to those who have taken part in the government’s furlough scheme, for example.

LIFE COVER ENJOYS POST-COVID BOOST

EY’s recent study found 25 per cent of respondents agreed that the pandemic had affected their attitude to protection insurance, while 58 per cent of them were feeling more positive towards life-cover products

The list of specific Covid-19 issues prompting people to seek out financial advice is a long one, but Ian Pickford of Mazars says he is also seeing an increasing number of clients with more fundamental questions. “The pandemic has made some individuals ask themselves whether they want to change their lives in quite radical ways – where and how they live and work, for example,” he says. “Some have had more time to reflect and others have just got used to a different type of lifestyle.” Very often, these changes are positive and exciting but putting them into practice on a permanent basis requires careful financial planning, spanning everything from mortgage and housing advice to help with savings, investments and pensions. Clients may find their dreams within reach, Ian says, but they need professional help to make them happen from a financial perspective.

The evidence from VouchedFor is that people are not only keener to get advice, they are also spending more time choosing the right adviser. Visitors to its website during the first two lockdowns spent an average of 54 per cent more time reviewing adviser profiles than before the pandemic. They are certainly doing their due diligence.

That is good news, according to Ian: “There is no typical client; everyone is different and they want advice tailored to their own needs. In that sense, the pandemic has been a catalyst.”

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