Life in Financial Services after Covid-19

26th May 2020 Kellie Sharp

Everything we hear, watch or read these days is coronavirus related isn't it? People are constantly speculating about how long this lockdown will last or when will we find a vaccine and how we are going to monitor the new cases in the interim. A question I have been thinking about is how the financial services industry may look on the other side.


What seems likely to stick is the change to human behaviour, with implications for the way the financial services industry will do things. Most of the financial planners we work with at PowerPlanner seem to be carrying out client meetings via video calling platforms rather than face-to-face, as has always been the traditional approach. This makes sense to keep the risk of infection low for both parties.

According to the World Health Organisation (WHO), most estimates of the incubation period for Covid-19 range from 1 to 14 days, most commonly being around 5 days. Spending time close to someone who might be carrying the virus, albeit without yet displaying any symptoms, seems a risky decision.

The tendency to meet remotely could likely increase due to other factors too. There is a growing awareness of climate change which will push financial planners towards remote client meetings in future. After all, if you're considering the carbon footprint of each client relationship then you would be keen to avoid a drive across the country for a meeting.


Conferencing is particularly prevalent in the financial services industry. We have all probably had an event or conference cancelled in the wake of Covid-19 to avoid the risk of widespread infection among delegates. We still don't know for how long this fear will discourage sponsors and delegates from attending live events, but at least the technology is in place to host online events. These can be just as appealing and engaging as the real thing and by far more efficient in terms of time and costs, and will no doubt continue in one form or another after the lockdown has ended.


My last article focused on the benefits of homeworking, and now during the lockdown we are all having to deal with this as well as having homeschooling thrown into the mix! In the aftermath of the virus, homeworking may be more popular than ever, with more financial planning businesses shifting towards increasingly flexible methods of working.

The 2019 survey from IWG Global Workspace found that flexible working was becoming increasingly important to employees, with half already working remotely for at least half of the week, and 70% for at least one day a week - and this was before the Coronavirus outbreak, so the figures will increase going forward.

With all the software packages available now, it's worth questioning why a requirement to be permanently based at a desk in an office remains the default position for many financial service industry staff. Working from home is another significant contribution to cutting your carbon footprint too.

Client Management in Volatile Markets

Record numbers of people are frantically trying to contact their financial services providers with questions, concerns or to request special measures as their finances have been impacted by the coronavirus pandemic. Many have lost jobs, seen their incomes vanish, and are in fear of defaulting on loans or missing mortgage payments. Businesses, too, are in need of additional help as many have seen their revenue deplete dramatically or stop altogether.

The situation will require constant, careful handling from finance companies as they seek to reassure clients, respond to their concerns, and earn their trust during this volatile period. As well as the human touch, a lot may depend on just how well companies’ digital infrastructure and services can handle the increased demand.

Where businesses decide they need an office may shift also. Previously, ten people might have been the tipping point, but it might now be fifteen or twenty. In turn, that could even alter the property landscape with large skyscrapers previously filled by one or two companies needing to become more imaginative with how they fill their space. On the flip side, smaller office properties facing a lack of demand may mean that residential letting becomes more lucrative than commercial letting.

Stock Market Falls

Finally, stock markets have crashed across the world, with the virus seemingly the catalyst to tip global economies into recession with ‘trillions wiped off' the value of portfolios in the space of a week. The Covid-19 market correction was a timely reminder of essential investment principles, including portfolio diversification, regular client communication, and keeping back enough in cash to meet short-term requirements.

If this bear market goes the same way as the 2008/09 financial crash, then those holding significant amounts in money market funds and fixed income bonds will benefit as investors run for (relative) safety. However, for those with significant equities, there's likely to be the initial hit that we've already seen with share prices tumbling followed by the effect of disinvestment from investors opting for safer holdings.

GDP came in at a slightly-better-than-expected 2% decline for the first quarter of 2020 this month, but this is only for the three months to the end of March, before the main impact of the coronavirus started to pinch. The next quarter is predicted to fall by 20% even with the allowance for a marginal recovery as property, manufacturing and construction workers are allowed to return to work, tentatively. A more comprehensive recovery is expected in June when most schools and shops should be allowed to reopen, albeit with inevitable restrictions.

One thing that is certain in a post Covid-19 world is that until businesses and households are confident that the virus poses little danger to lives and livelihoods, the economic recovery is likely to lag and activity levels will struggle to return to pre-crisis norms. We will just have to wait and see what the “new normality” world has in store for us.

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