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Schroders UK Financial Adviser Survey: the impact of the coronavirus crisis on their clients and investments

In the unprecedented times characterised by the Covid-19 pandemic, Schroders surveyed UK financial advisers to get their views on the impact of the crisis on their clients and investments1.

As the pandemic resulted in a period of market volatility and changes to advisers’ working practices, never seen before, Schroders surveyed advisers to take a temperature check on how the uncertainty had affected them, their businesses and their clients’ financial planning.

Covid-19 – A dislocated market with its share of opportunities
While the global Covid-19 crisis is still unfolding, the vast majority of advisers seem to agree with the International Monetary Fund’s alarming growth projections2. Our survey shows:

  • 95% of advisers expect the Covid-19 outbreak will cause a major global recession, although optimistically, 66% believe that fiscal and monetary policy can go some way towards mitigating the impact.
  • In spite of this, 89% believe the market decline presents a good buying opportunity.
  • 69% of advisers plan to review their overall investment strategy in light of the crisis while 61% will wait until the outlook is clearer before making portfolio changes highlighting the appetite to remain invested during periods of market volatility.
  • Overall, 100% of advisers report that their clients have universally been broadly understanding about the impact of the coronavirus crisis on their portfolios, given the extraordinary circumstances.

Doug Abbott, Head of UK Intermediary, Schroders, commented:
“Whilst the long-term consequences of the current economic recession have yet to be fully understood, the Covid-19 pandemic has already brought about some profound changes to the investment community.

“Capital preservation becomes understandably a key priority for investors who now favour an intensified mode of interaction with advisers along with a more active style of investing. The actual impact of the pandemic on investor sentiment remains however surprisingly mild according to our survey even if retirement plans for half of advisers’ clients seem delayed for now.”

Surprising resilience in investor sentiment
Interestingly, there was remarkably little change in investor sentiment between November 2019 and April 2020, given the unfolding coronavirus crisis. The survey found that:

  • Sentiment among most adviser clients remained balanced between those who are neutral (45%) and those who are slightly bearish (38%) contrasted with 45% of clients who were neutral and 41% who were slightly bearish when surveyed in 2019.
  • Only 5% of advisers would describe the sentiment of their clients as very bearish, up from 2% in November 2019.

ESG – Changing attitudes towards sustainable investing
While the crisis has actually increased the visibility and perceived importance of sustainable business practices, investors seem to be rethinking their personal values and priorities. Interest in sustainable investing continues to grow as shown by our research:

  • Over a third of advisers (35%) believe that the coronavirus crisis will impact client attitudes towards sustainable investing.
  • 88% of advisers agree that the coronavirus crisis reinforces the importance of stewardship and using an asset manager who actively engages with company management.
  • 65% of advisers say the crisis will increase the attention they pay to the ESG risks associated with investments.

Gillian Hepburn, Intermediary Solutions Director, Schroders, commented:
“In line with our findings from last year’s Schroders annual adviser survey, we are pleased to see ESG and stewardship continue to grow in importance with 88% of advisers agreeing that the coronavirus crisis reinforces the importance of stewardship and using an asset manager who actively engages with company management. In our experience, asset managers have an important role to play in educating advisers on what ESG analysis means in practice and the role it can play in producing returns.”

Capital loss – a key concern for the investor community
As a consequence of sharp falls in the markets in March 2020, the level of advisers’ personal interaction with clients rose significantly with 73% of advisers interacting with more than 25% of their clients compared to 36% of advisers in an average month. Key financial concerns advisers heard include:

  • Capital loss was the principal concern for 53% of advisers’ clients and a top three concern for 91%.
  • Second in the top three concerns was the impact on retirement plans (85%), followed by investment income loss (64%).
  • Almost half (49%) of advisers surveyed say they have clients who have delayed their retirement due to concerns about reduced capital or income due to the impact of the coronavirus crisis on markets.

Navigating uncertainty – A case for active investing
With companies reacting differently to the crisis, leaving passive strategies most exposed, investors are increasingly aware of the risk they are running in a portfolio. The survey shows:

  • While most advisers say that their attitude to investing in passive funds has not changed as a result of the coronavirus crisis, 27% of advisers say they are less likely to invest in passive equity funds and 20% say they are less likely to invest in passive fixed income funds.
  • Only 7% of advisers say they are more likely to invest in passive equity funds and 4% in passive fixed income funds.


1 The survey was conducted online with 63 UK advisers between 15 and 23 April 2020.



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