How has Covid impacted your business? What trends and opportunities can we identify from a global peer set?

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How has Covid impacted your business? What trends and opportunities can we identify from a global peer set?

Experts: Chris Morgan, Regional Director & VP, UK Wealth Management, Dimensional Funds Advisers

Martyn Chappell, Head of UK Wealth Management, Vice President, Dimensional Funds Advisers

Facilitator: Martyn Laverick, Phase 2 Consulting


Session summary:

The session was based around Dimensional’s global study which was undertaken in July 2020. Initially what this showed was a drop in the further revenue growth expectations in the region of 5% from the start of the year. This is an average figure and there was a considerable difference between bottom quartile firms who were showing an 8.7% revenue growth compared with the top quartile firms who were showing a 17.4% growth. The key area of differential was around the fact that the top quartile firms saw just under an 8% increase in new clients compared to 1% in the bottom quarter.

The Covid 2020 study also highlighted three key areas that firms were now focused on which included enhancing the digital client experience. A lot of participants felt that they have been fairly nimble adapting to the new regime in supporting client communications and supporting staff working from home. One area which firms agreed had been difficult was finding new clients as traditional marketing methods were not available.

Many firms announced very successful August and September months with good levels of new business and new clients. However, the desire is still to see the pipeline grow further taking into account that we may be in these unusual times for some period. One thing that firms expressed was that referrals had increased as it spent more time with existing clients helping in ways that were different to how they usually helped clients.

The next section concentrated on human capital and all firms agreed that staff had handled the situation exceptionally well. Many saw benefits coming out of COVID-19 with levels of productivity reaching all-time highs. Low, if not almost zero, levels of absenteeism have been seen and the staff have got used to working in the virtual world. Many firms increased their communications to the staff with initiatives such as coffee mornings or drop-in mornings to allow social interaction to continue. However, it was suggested that people are now getting a bit fatigued with the situation and businesses are facing challenges as to how they retain the culture of the business when staff are mainly remote working.

The survey of the participants showed that the vast majority will offer existing staff and new staff flexible working arrangements and this ties into the output of the Dimensional survey.

The final section was around client communications and every firm had experienced a significant increase in virtual meetings held with clients and staff. Most firms are going to continue offering virtual meetings as part of the service but there is the desire to be able to have face-to-face meetings as well. Interestingly, there were mixed views on whether firms would return to the old ways of doing things and this very much depended on the structure of the individual businesses.

In summary, as businesses get used to working differently, one of the key challenges that is common across all firms is how to retain the culture of the business and how to keep staff bought into the businesses goals when they are working as their own little remote hub. The view shared was that ‘normal’ would never be achieved again and the new normal would look different depending on the type of business.