Intermediaries will be key to Investment Houses navigating the Covid19 crisis

By Alastair Waldron, Financial Services Director, Embrace

Digital transformation heralded a new era of self-directed investing. The speculation was that as digital natives shook off debt and started to plan for retirement, they would shun the help of advisers and follow their own investing path. But is this going to be true after the coronavirus crisis subsides? In uncertain times people tend to go looking for help, for safely, reassurance and mentoring.

Earlier this month, the FT Adviser predicted that advisers will emerge from the Covid19 crisis stronger than ever, “with a rising pipeline of new clients and more streamlined businesses”. Commentators noted that consumers will seek support to plan for the future and protect their wealth as they become more cautious and financially savvy. Also, the push to remote working will act to accelerate new practices that will make advisor services more accessible in the future.

With client portfolios having taken an unprecedented hit, these intermediaries will have a major role to play in restoring confidence and helping to rebuild the portfolios of anxious and frustrated clients. Investment Houses can provide support, knowledge, insight and new solutions to assist intermediaries in this enterprise.

Building up trust

The crisis may challenge conventional wisdom in key areas such as asset allocation, risk, regionality, sectors, best ideas and – because ‘quality’ will be under the microscope – sustainability and stewardship. So a strong and authentic story about Responsible Investing credentials will be of major importance.

In this environment, communications become even more important. Trust, a core component of brand, needs to be built up with proactive service, transparency, creativity and quality ideas.

This doesn’t mean that Investment Houses that are active in the retail space should abandon building awareness and connections with end investor. It’s a bit of a cliché, but companies like Proctor and Gamble or Coca Cola have no direct sales, but they spend billions on promotion among their consumers worldwide. They do this because they want to make an emotional connection with the audience so when all things are equal the decision goes their way. And of course, retailers like big spenders – it make their job easier.

The importance of values

People make big, serious decisions with their heads, but also with their hearts, and in the investment industry, we often forget this. Advisers and investors will be looking not just at value but also values. So getting closer to intermediaries, providing empathy and practical support, quality insights and intelligent investment solutions will be key. Also, as necessity drives increased application of digital communications and service, Investment Houses will need to shape up to ensure they are seen a safe havens, ready for a smarter, more digitally savvy adviser and investor base.

Investors are increasingly concerned about the cynicism of some big business driving unsustainable practices. So things like stewardship and responsible approaches to investing will rise in importance, firstly with the consumer, but inevitably with advisers as the message feeds back. So Investment Houses that have an authentic story and track record of engagement, and of challenging bad practice or inflated executive packages, will stand out increasingly post-pandemic.

Communications for a new landscape

The immediate challenge is, of course, fire fighting and calming troubled waters with helpful content and analysis while we all pray for a V-shaped recovery. With Investment Houses busy internally, their creative agencies can help to provide planning for the other side so that they are in the best possible position as things improve. As the new normal start to emerge, Investment Houses need to consider what are the key things they want advisers, and their clients, to think about them as a business. How much of the content they distribute hits the mark? How sharp is their messaging, and is it future proof? Are their website and digital communications tailored to the new landscape? Investment Houses need to tune in to the things that matter most to clients and advisers, reflecting what they want with great planning, communication and creativity.