With the exception of a spike in mid-April, the number of deaths from coronavirus in Spain appears to be falling with some degree of consistency.
Spain has long been a hotspot for British expats, who tend to be older and therefore fall into the most “at risk” category, which has posed challenges for the advice businesses serving them.
So, how have financial advisers adapted to this never-seen-before environment?
International Adviser reached out to firms in the Iberian country to understand the impact the pandemic is having on their businesses and what strategies they are using to overcome it.
Relying on clouds and tech
The issue that every financial adviser now faces is, of course, a lack of face-to-face meetings and the search for different ways to make up for that.
Jonathan Goodman, director at The Spectrum IFA in Spain, said: “Obviously, we cannot see clients; so calls, mails and other client communications are condensed into a more efficient and effective format, albeit less personal than a visit.
“Wet signatures on documentation has been an issue but is now largely resolved with the acceptance of scanned copies and/or consultants’ confirmation.”
But it’s not just advisers who are struggling, as clients may not be familiar or aware of the latest technology and may need help accessing it.
Tim Govaerts, associate director at Blacktower Financial Management in the Costa del Sol, said: “There is the obvious practical side of how this outbreak affects our day–to–day jobs, now we are all being confined to our homes.
“Many will be going through a learning curve discovering new ways of staying in touch with our clients, colleagues and providers.
“Due to the demographics of our market in the south of Spain, not all clients are that familiar with the newest conference call possibilities; such as Skype, Zoom or GoToMeeting, but as a last resort there is always Whatsapp that even our most senior clients seem to be familiar with,” Govaerts added.
Nothing can be left behind
If finding ways to keep in touch with clients is challenging, trying to meet regulatory and compliance requirements is even trickier to achieve remotely.
Govaerts continued: “Anti-money laundering and customer due diligence procedures are more complicated to follow.
“Providers from their side are equally trying to find ways to overcome the hurdles of confinement, in the way of accepting electronic signatures for example.”
But clients seem to be holding up, said Christina Brady, associate director at Blacktower Financial Management in Costa Blanca.
“The main difference we have noticed between this market crash and that of 2008, is that very few clients have panicked, most now understand that the losses on their investments are paper losses, and by selling they would just be crystallising a loss, and that if they sit tight they will eventually recover.
“Also enquiries from new and existing clients with regards to new/further investments are starting to pick up, with people who have surplus cash languishing in bank accounts seeing an opportunity to make money,” she added.
Worry about clients
Jason Porter, business development director at Blevins Franks, talked to the firm’s Spanish advisers who said they are concerned about their clients, since many of them are either retirees or over 60s, and who fall under the ‘at risk’ category.
“The situation in Spain, and the circumstances our clients find themselves in, means it is more important than ever our partners and private client managers (PCMs) are in regular contact with them,” Porter said.
“UK nationals living abroad face particular issues: They are concerned for family at home in the UK, and may also be feeling lonely on their own in Spain – particularly if they have only recently moved and have not built up a large social circle yet.
“Retirees in particular rely upon their pensions and investments to cover their expenses and lifestyle. The significant fall in markets across the world will mean that some may be concerned for their future financial wellbeing.
“In these strange and uncertain times, communication with both prospects and clients is of vital importance,” he added.
Don’t neglect security risks
But recent concerns about the security and online safety of some new technologies has forced advisers to reconsider which software and apps they are using.
“Whilst we are providing regular operational updates and market commentary by email, we believe the most important thing is to let clients and prospects know we remain in Spain, with them, and we are available if they should need reassurance, or just a friendly voice to talk to – all that has changed is our partners and PCMs are doing this from home rather than the office,” Porter continued.
“In particular, we have reached out to those people we know have not been living in Spain for very long, and may feel particularly alone at this time.
“For existing clients, we continue to provide ongoing investment and tax advice, largely via email and telephone. All calls to our offices are diverted directly to our office managers who take the details and pass the matter onto the relevant person to respond to within 24 hours.
“Initially, we looked at utilising video conferencing software, but our own investigations of products like Zoom left us concerned – client security is of utmost importance and we felt there may have been opportunities for hackers or similar, so we have decided to not utilise this software.
“Internally we have been using Microsoft Teams, and more recently GoToMeetings. This latter application allows us to also utilise our own cloud security, so where clients have GoToMeetings, we have been able to hold video conferencing with them,” Porter said.
Change of plans?
But when it comes to the actual advice these firms are giving clients, has that changed in any way since the outbreak?
Not according to George Whitby, financial adviser at Logic Financial Consultants, part of the Opesfidelio network.
“Our advice has remained pretty much the same as before but is always tailored to the client and their current situation.
“Whilst there is a mixture of opinions on the short-term outlook, history has shown us that it is often better to keep invested despite the natural fear of doing so.”
Stuart Langan, a financial adviser in the Costa del Sol who is also part of the Opesfidelio network, said he has been turning to cash recently as an investment opportunity.
“We have been building high cash positions since the beginning of the crisis and many clients are totally in cash.
“Furthermore, we have used the high cash position to introduce 100% lower charge Clean Share Class Funds and announced we were lowering our own initial and annual management fees to help recovery and encourage new investment.”
The current climate is presenting challenges unforeseen by the financial advisory sector in Spain, but one thing is sure, according to Langan: “The lock-down in Spain and elsewhere will strengthen client relationships with advisory firms, in a way that sales organisations will not understand.”