There were many lessons to be learned from the General Election. However, one of the most prevalent is the amount of damage that can be caused when you embark on a campaign to establish a result of which you are not entirely sure.
Whatever your political persuasions, I think we can all agree that the reasoning behind Theresa May’s decision to call a General Election and create a more unified Government and reassured nation as she approached the Brexit negotiating table was sound. However, I think that we can all also agree that we’ve ended up with almost the exact opposite outcome.
Before the election we were a nation divided over the EU Referendum result, following a campaign which was at times chaotic and undignified on both sides and largescale changes on Downing Street.
Post the narrowly fought General Election, we still have the legacy of all of that plus a steady stream of disapproval from Brussels and a now weakened and unsure starting point for the imminent Brexit negotiations.
Despite all of this, the UK’s economy remains generally robust. Immediately after the election we saw a drop in sterling, whilst the markets remained on track. Your response might be “For how long?”, but I would reply that we never really know for how long markets are going to remain steady.
Those of us who work in financial services understand the fluctuations that the markets undergo; sometimes volatility is anticipated, at other times it arrives more unexpectedly. Financial services professionals know that the investment markets exist in a constant state of flux to varyingly dramatic degrees, so what makes this time any different?
The helping hand for clients
Well, this time the challenges the economy faces are being played out on a stage of global proportions. How many of your clients who are not already sophisticated investors could tell you anything about emerging markets? Or about why income investing is more to their tastes than growth? I’d wager very few. However, how many could talk to you about the dangers of a ‘coalition of chaos’? Or the advantages and disadvantages of picking a ‘hard’ or ‘soft’ Brexit?
Consumers are currently being provided with a deluge of hyperbolic information, very little of it from entirely unbiased sources, and no reliable guidance on what it actually means, both in general and for them specifically.
Throw into the mix an unstable American President, leader of the free world, who seems to be engaged in a competition to see how many breaches he can make against national security, human decency and common-sense before facing impeachment. Add the sense of sadness, fear and frustration that are a natural reaction to the heart-breaking atrocities we’ve experienced in the UK in recent months, and it creates the perfect storm of widespread consumer uneasy and panic. And, of course, this is going to translate across to their feelings about their financial affairs.
A reliable role
This is the time when clients need their advisers more than ever. I believe the first step is to provide reassurance. As I mentioned above, you will be well accustomed to the fluctuations of the market, but those without your experience and knowledge about the economy will be thrown by the overwhelming noise from all angles.
As a specialist, and someone with whom they already have a bond of trust, you are ideally placed to provide an accurate picture of what, if anything, will affect your clients on an individual basis. It may also be worth reminding investment clients that their portfolio has been built in a way which reflects their attitude to risk, and that your investment process solution aims to, where possible, stick within those agreed parameters.
Through either face-to-face meetings or written communications to those you don’t see as regularly, it is vitally important that your clients perceive you as a reassuring, informed presence; an oasis of informed calm amongst the furore. Even better if your communication reaches the client before they begin to feel uneasy; by putting yourself on the front foot when it comes to communication, you can reconfirm clients’ perception of you as knowledgeable, foresighted and a very safe pair of hands to oversee their financial matters.
In the current climate, many consumers will be feeling wrong-footed and uncertain about what the future holds. Should they expect a Brexit deal in which we lose access to the open market and both the value of their investments and the UK’s economic standing will plummet? Or the beginning of our golden age of financial prosperity and glorious independence? Let your clients know that in either scenario, or a thousand in-between, that you will be there to offer them the specialist, professional support for their financial affairs that they so desperately want.
Matt Timmins is joint Simplybiz chief executive