The emergence of covid-19 in China in December sent ripples across the globe.
Each little wave, emanating from Wuhan, has slowly drifted farther away as the virus passed from country to country.
The international death toll continues to rise, with governments everywhere working to “flatten the curve” and limit the impact high numbers of infected people will have on health services.
While many countries are still in the relatively early stages of lockdown, people in jurisdictions like Hong Kong and Singapore have been living in varying degrees of isolation for much longer.
So, what has it been like for advice firms in the region?
Educated early
Things have calmed down in Hong Kong after the “initial chaos and panic buying of toilet roll and hand sanitiser”, Pyrmont Wealth Management’s Simon Parfitt told International Adviser.
He believes that special administrative region’s past experience with severe acute respiratory syndrome (Sars) means it is “well prepared, in terms of taking the proper precautions”.
Schools in Hong Kong were shut in late January, with a prospective re-opening date of 20 April. But chief executive Carrie Lam has since said that this would be “impossible”.
“This has meant some clients’ families have not returned to Hong Kong since Chinese New Year and this has caused some disruption in terms of review meetings that we would normally do with both the husband and wife,” Parfitt added.
But Pyrmont Wealth hasn’t “really been impacted”.
“We have always been flexible on advisers working from home or the office, so people have just carried on as is.”
With the firm’s AUM model and LifePlan process, Parfitt said the firm is “quite well protected” because “we are not reliant on the constant selling of new product”.
“From a market perspective, we have also not had many ‘worried client’ enquiries at all.”
He credits this with clients being well-educated on taking a long-term view, the need to sensibly rebalance and the buying opportunity that the dip presents.
“It has actually resulted in new inflows to take advantage of that.”
Parfitt added that clients also know not to pay too much attention to the financial headlines.
“That said, we have been proactive in reassuring some clients that are naturally a little more cautious or might worry; just to remind them that we are here, should they need anything or have any concerns.”
Not too much information
With covid-19 dominating global headlines coupled with significant market volatility, it is only natural for investors to feel a sense of unease, St James’s Place’s Joel Carpenter told IA.
“The unpredictability of the virus and the uncertainty of its economic impact are unsettling. It can be difficult to watch the value of investment fluctuate.
“It is at times like these where the value of face-to-face advice is realised,” added SJP’s Singapore-based regional director, marketing – Asia.
As such, the firm’s advisers are proactively engaging their clients through regular communications to ensure that their financial objectives are kept in view.
“One of the greatest risks an investor faces is to sell in haste and out of fear when markets fall,” Carpenter said.
The extent of the sell-off in markets has been unprecedented in recent times, “but it is worth remembering that investors have seen five declines of greater than 15% in the period since the global financial crisis”.
“While the drivers of market sentiment may vary, periods of sharp volatility are quite normal, but they tend to be short lived.”
Communicating with clients is of paramount importance, but SJP is careful “not to simply flood them with ‘too much’”, Carpenter added.
Instead, the team seeks to “strike a balance between regular communications and those of a reactive nature where some specific commentary or further reassurance is needed”.
“For example, it is important that we do not just talk about what is going on in the market but that we remind our clients of some of the investment fundamentals that can be missed in times of concern.”
This could include balancing investments between regions, sectors and asset classes.
“That, in itself, offers some natural protection for their portfolio through diversification,” he said.
Another key part of the messaging is ensuring that it is personal and not generic.
“We have focused on delivering a range of short videos from members of our investment team and hosting live weekly webinars in the absence of traditional face-to-face investment seminars.
“Finally, social media is an incredibly powerful tool for disseminating information quickly within our online community.
Carpenter described is as “extremely effective for putting consistent messages out in a timely manner.”
Looking beyond the outbreak, he added: “The current challenging climate provides a stern test of how robust our processes and communication tools are and the progress that we have made.
“It also forces us to fully embrace the use of technology.
“When we are able to come out of the other side, it will be critical that we don’t simply slip back into our old habits, but learn from this experience, for example, in how we continue to engage with our community, and use it to further develop the client experience and outcomes, ensuring that we are able to take some positives from this time,” Carpenter said.
