Wealthpoint advisers ‘cautiously optimistic’

A recent survey of 50 Wealthpoint member businesses reveals most are in a positive frame of mind about their ability to face ongoing Covid-19 challenges.

The survey, conducted in mid-April, had a 92% response rate and was designed to gauge the resilience of member businesses, understand potential impacts on financial forecasting, gain feedback on how well suppliers were supporting clients and advisers, and understand what additional support members needed from Wealthpoint.

While most business had adjusted expectations about new business over the coming 12 months, the diversified nature of the network meant that many felt their businesses could pivot to other areas where their clients might need assistance in the short to medium term. 

So, where new mortgage volumes were anticipated to be down by 36% on 2019 results, investment inflows were forecast to increase on 2019 levels across the network.

This is due to both an increased focus on investment advice by the network for 2020 and new investments being considered – having been held back by clients in the early stages of the pandemic. 

More broadly, investment funds under management have been impacted, however Wealthpoint advisers were satisfied with the role they have played in regularly staying in touch with clients when markets were in freefall. 

This was particularly applicable in cases where they recommended against clients changing investment strategy prior to the markets starting to rebound just after mid-March.

New general insurance premiums in total are expected to fall by 11% as a reflection of the economic pressure business clients will be under as they try to restart and operate under various lockdown levels. 

Life insurance new business was forecast to increase by 2% from 2019 because clients are typically risk averse during difficult economic times and keen to find ways to mitigate risk through insurance.

Support from product suppliers was generally regarded as very good. 

Life, health and general insurers in particular were praised for the rapid support they have offered clients through various premium relief schemes although it was noted that some schemes are more complex, and less client friendly as a result – particularly in cases where clients cannot claim if they have suspended premiums. 

Advisers felt that insurers should also carefully consider persistency measures, and how this might impact commercial arrangements, due to the likelihood of increased client cancellations in coming months. 

Although persistency is mentioned in many agreements, a widespread fall below minimum levels has been unlikely to eventuate until now.

Suppliers were also praised for their willingness to connect with Wealthpoint advisers over video-conferences and webinars. 

Simon Manning, Wealthpoint’s CEO, was pleased with the results of the survey as the Covid disruption has come along at a critical time for the one-year-old co-operative.

“The strength of Wealthpoint reflects the strength of its member businesses so it was important we asked them how well placed they thought they were to weather the difficult times ahead. 

“It’s pleasing to see they are generally in good shape and that their diversified business model is helping them work through the disruption to date. However, we all acknowledge that there are many more chapters to be written to this story. 

“Our members have been resilient and quite innovative in how they have dealt with this crisis – both in terms of how they are working with clients and how they manage their business and staff. 

“One of the benefits of being part of a large group like Wealthpoint is that we’ve been able to share with all members the specific details of what each business has done with their clients and how they have adjusted to lockdown and its effects. Our members recognise that in times like this, they’re stronger if they act together as a group.”

Manning says that as well as closely monitoring the evolving Covid-19 impacts on businesses, these survey results will also form the foundation of some work planned to help member businesses with annual business planning from next year.

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