Fred Dodds
The New Zealand economy has been stunted by a level four lockdown response to the global pandemic.
While economists are predicting heavy job losses – Westpac expects 200,000 – self-employed business people, such as advisers, are also expected to feel the heat.
David Greenslade, executive director at Strategi, said the impact would be most obvious among new advisers who had not yet built “a good residual income stream”.
“Those advisers may choose to join a larger corporate advisory business.”
Financial Advice New Zealand chief executive Katrina Shanks said advisers would be no different to other businesses.
“Each advice strand – be that lending, risk, investment [or] financial planning will all feel the impact. Some advice streams more than others in the short term.
“Many advisers have seen this economic downturn before and have adapted their businesses over a period of time to ensure they are sustainable during this period.
“For new businesses this is slightly harder as they have not had the time to develop their businesses to this level. There is no doubt for a short period of time there will be a reduction in economic activity which will impact on those seeking financial products such as mortgages, insurance and investments.
“The most important thing is for an adviser to understand what levers they can pull and push in their business right now to help them through these times.”
She said Financial Advice New Zealand was running a webinar on Thursday to discuss the impact of Covid-19.
It has also launched a peer support programme in which senior practitioners have volunteered to support other advisers.
Former IFA chief executive Fred Dodds said the lockdown could be a chance for advisers to get ahead of what was required of them.
He said some new advisers, particularly in insurance, could struggle with months of little new business, particularly those with responsibility periods for business sold over the past year that could lapse as people lost jobs or encountered cash flow issues.
“But so many of the RFA community have been in the business for such a long time. The investment group are busy.”
People could take the chance to do the level five qualification within the next eight weeks, he said. “They could come out the other end with more knowledge.”
