Coronavirus - The importance of keeping in touch with your Financial Adviser


Rory Brand

Rory Brand

Financial Planner


At the time of writing we are now in the third week of the restrictions imposed by the Government with the likelihood that this will continue beyond the initial review date.

We are all spending more time watching or listening to the news, reading the papers for the latest updates and trying to understand the effect on our personal and professional lives.

A key component of these updates is the impact on the economy -  how long it will take to recover, and what the Government are doing to help.

Almost all are affected by the fluctuations in investment markets, be it personal investments or workplace pensions. It is human nature to check on values, especially during challenging times.

It is then easy to only consider the short-term impact rather than taking the longer-term perspective.  You may also find that the barometer for what investments are doing in the UK is the performance of the FTSE 100 which can be unrepresentative of the true picture.

This is where having a Financial Adviser to discuss these concerns is invaluable. We have an experienced team, who have advised and guided through many times of concern such as 9/11, the global financial crisis in 2007, and the Greek debt crisis.

We use a multi-asset approach to manage investment risk as this spreads investments over a wide range of “asset classes” and geographies. These assets are risk level dependent but include Cash, Government Gilts, Corporate Bonds, Property, UK Equities and Overseas Equities.  Assets don’t all react the same way in a crisis.

If we consider how a multi-asset portfolio at a risk level five has performed during a previous downturn and the current one, it shows why we use this approach.

During the global financial crisis, a risk profile 5 experienced a fall in value of 30.12%[1].  In comparison, the FTSE 100 fell by over 43%[2].

If we consider the current situation, the FTSE 100 has fallen by 33%[3] from January to the 23rd of March, whereas a diversified multi-asset portfolio in line with a risk profile 5 has fallen 12.71%[4].

Despite this fall, a Risk Profile 5 produced annualised returns over the period from 30th September 2005 until the 31st of March 2020 of 5.62%[5].

For many reasons this is a deeply concerning time, however during downturns having a well-diversified portfolio, although it may not make you immune from falls in investment markets, it could shield you from the worst of them.

Investment markets are resilient, and recovery is expected in time, this may take some patience, but you have your financial planners to lean on and should you have any concerns please do not hesitate to contact them.

[1] Dynamic Planner Quarterly Asset Allocation Factsheet Q1 2020

[2] FE Analytics on 09/04/2020 – FTSE 100 graph between 08/10/2007-03/03/2009 - Actual fall 43.17%

[3] FE Analytics on 09/04/2020 – FTSE 100 graph between 01/01/2020-23/03/2020 - Actual fall 33.02%

[4] Dynamic Planner Quarterly Asset Allocation Factsheet Q1 2020

[5] Dynamic Planner Quarterly Asset Allocation Factsheet Q1 2020

Please note: This communication should not be read as a financial advice. While all possible care is taken in the completion of this blog, no responsibility for loss occasioned by any person acting or refraining from action as a result of the information contained herein can be accepted by this firm.