One in eight adviser clients suffer financial damage in pandemic

Financial advisers estimate that around one in eight clients have suffered financial damage during the COVID-19 pandemic, new research from The Openwork Partnership has revealed.

A study from the financial advice and investment network found that on average, advisers believe 12% of their clients have taken a financial hit because of the impact of the pandemic, with just 8% suggesting that none of their clients have been adversely impacted.

The Openwork Partnership stated that the biggest issue advisers have seen is clients stopping to save or invest during the pandemic (48%), while 32% also said they have clients who have run down savings during the coronavirus crisis.

The research, based on a study among 100 financial advisers during January, also showed that 19% of advisers say they have clients who have taken money out of pension funds to tide them over during the pandemic, while 31% revealed they have clients who have taken tax-free lump sums from pensions earlier than planned.
Furthermore, around 41% of advisers say they have seen a rise in clients taking money out of investments to help themselves or family members.

“Its been a tough year financially for millions of people despite unprecedented levels of government help and advisers are seeing the impact on the ground,” commented The Openwork Partnership chief commercial officer, Mike Morrow.

“Many people have benefited financially during the crisis with more money going into savings but one in eight clients on average suffering losses is bad news and particularly so when people are taking money out of long-term investments to keep going in the short-term.

“The value of financial advice and financial advisers will be very important as the UK starts to recover from the financial impact of the crisis, demonstrating how vital advice is and the role it plays in what are very personal situations.”

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