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Relationships in the time of Covid-19

By: Annalise Toberman


“Financial services is a people’s business.” That is definitely one of the top-five most dangerous phrases for a lockdown financial marketing drinking game.

A mere few months ago (it feels much longer!), we were grilling fund analysts, investment managers and sales and distribution managers/directors on the importance of face-to-face contact and relationship building, as part of the research for our recently published Wealth Managers Review (WMR). Some of the sales personnel said regulatory changes had hampered their ability to meet people and build relationships with current and potential clients. Inducements rules introduced in 2013 were well intentioned – an all-expenses-paid trip really shouldn’t preface an adviser’s decision on which fund to recommend to a client, after all. Yet the clamp-down left a void where more modest networking events and meet-ups once existed.

Three months later, everyone is in lockdown and varying degrees of social distancing are likely to be in place for months. Once challenging, now in-person networking is a physical impossibility. So how is it affecting the “people’s business”? Building relationships with salespeople is important to fund selectors, as shown in our WMR research. The research also confirms what we know about DFM firms: most expect a fund manager meeting before investing.

One DFM we interviewed likened in-person manager contact to seeing your doctor: “If I was ill, I would want to see a doctor [face-to-face] rather than on a screen.” Yet times are changing. To deal with overwhelming demand for appointment slots, my GP practice was promoting phone consultations and its eConsult service long before Covid-19 came along. These means of communication can be an efficient conduit to guidance or a sought-after prescription. Albeit, this works for small matters. Those who are seriously ill would have little thrift for texted responses from the doctor. They want to be listened to and reassured, and for people nothing beats face-to-face.

Applying this logic to the relationship between fund selectors and asset managers, remote communication is not always an ideal or suitable substitute for face time, but it’s often sufficient, and can yield a more efficient response for the routine and everyday.

Pre-Covid, some DFMs would tell us they appreciate the time-saving nature of alternatives to in-person fund manager presentations. A webinar nullifies travel time and lets you keep one eye on emails or other things while the other is on the presentation. One DFM in the South West was blunt about what he was missing by attending a webinar rather than a face-to-face seminar: “a cooked breakfast and a handshake.”

In spite of the efficiency gains of replacing some face-to-face contact with online meetings, webinars and the like, many are still reluctant to do this in ‘non-Covid’ circumstances. Our WMR research found that fund selectors place increasing emphasis on qualitative fund research over quant screens; this shift makes sizing up the fund manager all the more important.

Can this sizing up not be done via Skype/Zoom/Microsoft Teams, you may ask. Not according to some, including this portfolio manager: “Actually being there allows the human side and those stupid, awkward interactions, or those painful moments that tell you a lot about yourself and about the other person. Everyone is a bit more on their best behaviour when it is on a video call.” Put simply, fund selectors want to see the real fund manager.

But maybe the lockdown will show us that you do not have to be ‘in the room’ to get to know someone. Personally, I feel like I know some my clients better, having seen their kitchens on Zoom or heard and caught glimpses of their children clambering about on Microsoft Teams. I’m seeing them in hoodies and t-shirts, and learning how they choose to spend the extra time they have at home (Joe Wicks workouts and Tiger King, it would seem). In our own homes, feeling a little vulnerable – this is the real us.

How the lockdown has impacted DFMs’ and advisers’ own client interactions appears to vary from person to person. Some are clearly more comfortable with video calls and digital communication than others. One fund selector summed up the situation nicely: “You learn that you can adapt well.” Many of us were pushed into the deep end for digital communication and remote working. Now that we’ve all been forced to learn to swim, we may keep paddling by choice after the lockdown. Not all the time and for everything, but when it makes sense.

The 2020 update of the Wealth Managers Review is out now. It covers a lot of ground, measuring the extent of the structural changes we’re seeing in the wealth management industry, explaining how fund selectors’ processes and resulting needs from asset managers are evolving, and giving insight into sales and service best practice. We would argue that the companies and individuals highlighted by fund selectors as best in their field for sales support, thought leadership and events – J.P. Morgan, Schroders, Liontrust, Baillie Gifford, Royal London Asset Management, Vanguard and others – are also well-placed to adapt and offer a service fit for the time of Covid-19. For more information or to subscribe, please contact Richard Ley or Toby Finden-Crofts.

Annalise Toberman

Annalise has spent her working life intensively researching B2B and B2C audiences in the financial sector. A keen qualitative researcher, she has conducted thousands of interviews across advisers, DFMs, fund houses, platforms, pension providers and consumers.

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