Lockdown Diary – 4th March to 26th June 2020

Article by Phil

So, here’s our diary of current events and what’s happening work wise….

Weds 4^th March – FTSE 6,815, just over a week later by Thursday 12^th March the FTSE is down to 5,237 a fall of 1,578 or 23%. In response to phone calls and e mails from clients we posted an update on the website, the general advice is not to panic. The market is down, and the best course of action is to hang on rather than crystallising actual losses.

By Monday 23^rd March when the lockdown announcement was made, markets slumped to their lowest number so far, 4993, which is 26% down since 4^th March.

Tuesday 24^th March – the day after lockdown. Given the Governments advice we’ve decided to send some of the staff home. Whilst financial services are classed as a “key” industry we think that we can continue to work with just a skeleton staff. The Governments pledge to support business is very welcome and we are able to “furlough” Sophie, Leah and Sue. This is the technical legal term for sending the staff home but protecting their jobs for the future when we are able to return to work. The Governments offer to contribute 80% of their salaries has protected their jobs.
We’ve looked closely at our expenditure and had to cut back on non-essential spending.

Christina, Adele and Josh are remaining in the Office, observing strict distancing measures. This means that we can continue to deal with client requests. Client review meetings are continuing by telephone, Facetime and Skype.

Friday 27^th March, markets close at 5498, up 10% from the low point earlier in the week.

Monday 30^th March – probably not Covid-19 related, but we are disappointed to hear back from the Chartered Insurance Institute (CII) that our application for Chartered Firm status has been declined. It was our understanding from the CII that the firm would be designated as a Chartered Firm now that Adele has achieved Chartered status. However, the CII advised us that because Adele’s qualifications are with the London Institute of Banking and Finance, we don’t qualify! This is very frustrating and contrary to the CII’s previous position. We don’t understand why Adele’s qualifications are not considered equivalent and we will be pursuing this with the CII.

In the meantime, we are continuing to service clients, hold Facetime review meetings and even managing to process some business for those clients who want their investment plans to continue regardless of what’s going on around them, which is great news for us.

Thursday 2^nd April – after considering the workload in the office, we’ve decided to furlough Josh as well, which now means that all the staff are furloughed, leaving just Christina and Adele in the Office.

We are continuing to receive enquiries from clients and life is going on!

Friday 3^rd April – markets close at 5406, pretty much static across the week.

Sunday 5^th April – Christina’s 50^th birthday! Spent at home on lockdown, but she had lots of cards, presents, phone calls and messages, so she made the most of a less than ideal situation.

Monday 6^th April – markets closed at 5,583 a small increase on last weeks close. The FCA are reporting an increase in “scam activity” during the lockdown period. They estimate that over £2m has already been lost to fraud, so please be on your guard. It’s not just consumers who are being targeted; the latest scam seems to be targeted at the self employed with e mails purporting to be offering Government assistance to small businesses in return for their bank details! Never give anyone your bank details unless you absolutely know who they are.

Thursday 9^th April – the office will be closed for the Easter weekend as normal. Markets closed for the weekend at 5,837 an increase of nearly 8% on last week, which is encouraging, although things could change at any time.

Easter Sunday – 12^th April – Adele’s birthday! Celebrated at home on lockdown, but with birthday messages online from her friends and players at Sale RUFC!

Tuesday 14^th April – back in the office after a lockdown Easter, but at least we had nice weather. The daily toll seems to have reduced slightly over the weekend, but not by much and the Government have announced a three-week extension to the lockdown, until Monday 11^th May. Perhaps the hope of a relaxation of the rules in three weeks might help to keep markets steady – we will see.

Friday 17^th April – the FTSE 100 closed at 5,763. Despite some variations during the week the closing position is very similar to the end of the week before Easter. We had a busy week in the Office with steady stream of client review meetings being conducted remotely. Interestingly this week we have seen an increase in requests for new investment transactions both from existing clients and new clients. A small indication that slowly but surely people are thinking about life after lockdown.

In light of the uptake in activity, Sue is now coming off furlough next week and will be back in the Office for three days a week to help Christina and Adele. There is plenty of room in the Office to maintain good social distancing practices, so any risk will be properly mitigated. This work can’t be done from home because of the strict data security requirements which can’t be guaranteed or controlled on home personal computers or laptops.

Monday 20^th April – business continues to try to move forward as normal, but it can be difficult. The post for example is becoming less reliable. Having sent an important document by registered delivery on Saturday, to be delivered on Monday, we were panicking when it appeared not to have left the Post Office by Tuesday afternoon. To our relief, we had confirmation that the document had been received on Wednesday morning, two days late, but at least it got there. This was a time sensitive document relating to a pension that had to be processed by a certain deadline. The consequences would have been significant to the client involved had the document not been received in time.

In a similar vein, a client decided that they needed to come into the office in person to sign several legal documents rather than risk the post. Since the Business park is largely deserted and the Office downstairs closed this didn’t pose too much difficulty to maintain social distancing. Cleaning up after the visit was unusual, but not too much trouble and at least we were then able to ensure the documents made it to their destination on time.

Wednesday 22^nd April – the Government website is now online to register our furloughed staff. It seems to be working OK! The way it works is that we must pay our staff their salary and then claim the money back from the Government scheme. We are told we will get the money withing 5-7 days.

We haven’t had a lot of choice about whether to furlough some of the staff. The amount of work we are processing has reduced as a result of lockdown and so there just isn’t the work for everyone to do. Plus of course we must watch our cash flow, just like every other business with less money coming in. We have to be extra careful in this respect because we must hold a certain amount of money in our business to satisfy the FCA rules and regulations.

We are looking forward to getting everyone back to work, but we also have to consider not only safe working, but whether childcare arrangements will allow everyone to return to work at the moment.

Friday 24^th April – the FTSE 100 index closed at 5,750 – almost no change in the week.

Monday 27^th April – Boris is back, but lockdown continues.

There is still lots to do in the Office. Last week we had our regular update with our compliance support service company. They provide us with updates about all the new legislation affecting the business and check on our policies and procedures, to make sure they are up to date. Sometimes this can involve quite a lot of work – but thankfully at the moment we have enough time to get this important work completed more quickly than normal!

Thursday 30^th April – The first figures highlighting the economic impact of lockdown have been released. HMRC figures showed that tax receipts were down by £2.2 billion in March compared with March 2019. At the same time VAT receipts were even harder hit. VAT was down to £2.4 billion in March, down from £12.6 billion in February – that’s a fall of £10.2 billion in one month. I’m afraid the consensus is that these figures are only going to get worse in April.

Friday 1^st May – the FTSE 100 index closed at 5,756 which is almost the same as last Friday.

Monday 4^th May – the Government launched its new “Bounce Back” loans for small business today. These are loans of up to £50,000 which are 100% guaranteed by the Government if the business fails to repay the loan. Repayments are deferred for 12 months and then the interest rate is 2.5%. On the face of it these loans will be invaluable to a lot of small businesses struggling with the impact of lockdown. However, there is a fear that a lot of the businesses will not be around to repay the loans in 12 months’ time, so this initiative could be expensive in the medium term – only time will tell.

Thursday 7^th May – the markets closed early due to the Friday Bank Holiday. The FTSE closed at 5,939 which is 3.1% up on the Friday before. Overall, the FTSE 100 is now up by 763 points since its lowest point of 4,993 back on 23^rd March. That’s an increase of 15.2% – nowhere near where they were but certainly an improvement. Please remember that we are only mentioning the FTSE 100 Index as a baseline measure of market movements. No clients are 100% invested in FTSE shares, everyone has their own portfolio according to their individual circumstances.

Friday 8^th May – VE Day Bank Holiday. What a shame the 75^th anniversary of VE Day has been affected by lockdown – although we did see lots of people celebrating with street parties – at a safe distance!

Monday 11^th May – So, we had Boris’s TV broadcast last night where he outlined the road map back to normality. That starts with the gentle easing of some of the measures – like being able to exercise more than once a day and being able to play golf again – which is a real bonus for some of us!

Wednesday 13^th May – whilst not lockdown related, industry news has started to pick up again. Today we had a story about Prudential not allowing clients to open ISA accounts unless they had a valid e mail address. Pretty straight forward on the face of it – a company digitising its service seems reasonable. Except the FCA has this year implemented revised rules and guidance about vulnerable customers, taking account of their needs and providing a service that doesn’t impact their ability to be treated the same as everyone else. Adviser firms have like ours have taken this on board and adapted our processes and services to accommodate assessments of vulnerable person’s needs. One area identified is in relation to people who struggle with technology or have no access to a computer. It appears that prudential have decided that this particular group of vulnerable people are of no concern to them. They issued a quote saying that clients could still access their system by post – but this was the opposite of what their website said – they then said, “it supported requests from vulnerable customers”! If an organisation like Prudential doesn’t adhere to the rules what is the point?

Friday 15^th May – the FTSE 100 closed at 5,800, slightly down on last week. In further non lockdown news, we closed the office early today so that Phil and Christina could play golf at last!

Monday 18^th May – so following the Governments advice, we have looked at our working arrangements and decided that we can start to bring our staff back into work on the basis that we can satisfy the two main requirements. First, none of our staff need to use public transport to get to work and second, we’ve measured our desks and we can safely keep 2m apart. We’ve put a kitchen rota in place and we’re confident that the office is a safe working environment. Leah is the first one to come back and came in this morning after being furloughed for eight weeks. Sophie is expected to come back at the beginning of June when nursery re-opens, but we haven’t set a date for Josh to return yet.

Wednesday 20^th May – business requirements continue regardless of the situation and today we had a virtual meeting with our accountants to sign off our annual accounts to the year ending 31^st March 2020. We were delighted to get confirmation that our turnover had grown by 18% over the last 12 months. This reflected our first full year in the new offices with our increased staff numbers. We had started off the year with a burst of new enquiries and had been very busy. Lockdown saw an end to any new enquiries for at least four weeks, but slowly but surely over the last few weeks we’ve started to see the number of calls starting to creep back up again – hopefully this is a good sign.

Thursday 21^st May – a report in the financial press today said that a quarter of pension trustees had stopped providing cash equivalent transfer value statements to pension holders as a result of The Pension Regulators guidance that trustees could put a hold on business as a result of lockdown and the effects on markets. In our view this is pretty outrageous because it prevents clients potentially accessing their pensions to transfer them for at least three months, regardless of whether they need to access the money or not. The Pension Regulator seems to have lost sight of the fact that this is client’s money which they have saved over a lifetime of work that they are blocking access to. Although looking at it another way, 75% of pension trustees have not decided to block access for clients – which is a good thing.

Friday 22^nd May – another week over – the 12^th week of lockdown – that’s 3 months! The FTSE 100 closed the week at 5,999 which is 1000 points up from its lowest point – good news for all.

Tuesday 25^th May – the week started with another “surreal” Bank Holiday Monday where you’re not sure what you can do and whether to just go into the office anyway. Luckily the weather was nice, so we stayed at home. We arrive into the Office to news from a survey by Aegon that the number of advisers offering advice on defined benefit pension transfers is now less than four in ten and that in terms of smaller firms less than 30% are offering the service. We’re pleased to confirm that at this moment in time we have no plans to stop providing advice in this area, in fact we think that it remains vital to providing a holistic advice service.

Friday 29^th May – the FTSE closed at 6,061 up again on last weeks high, so still moving in the right direction slowly but surely. This follows this weeks news that in the US some markets were up above pre-lockdown highs indicating that financial confidence may be starting to return as companies can see some light at the end of the tunnel – let’s hope so.

Monday 1^st June – another step forward as Sophie returns to work after 12 weeks of furlough. Made possible by nursery reopening along with many primary schools.

Wednesday 3^rd June – on the subject of the Government furlough scheme, they announced this week that HMRC would be taking a tough line on companies who had “misused” the scheme. According to Government figures 8.4 million workers are currently on the scheme. I imagine that will start to reduce quite quickly as firms start to re-open like we have been able to do. The furlough scheme has certainly been a big help to us over the last couple of months. We really didn’t have work for the staff to do initially after lockdown and if we hadn’t been able to use the scheme it would have hurt our cash flow, so we were grateful for the assistance. If companies have “misused” the scheme we would support strong action by HMRC, including action to recover funds under the Bounce Back Loan scheme.

Monday 8^th June – new enquiry numbers are starting to creep up. This last week we’ve seen a definite increase in enquiries across the board as people start to think about their finances again. Not surprising really, especially on pensions for example – your retirement date hasn’t changed just because we’ve been locked down. Mortgage enquiries to. Over lockdown there have been no enquiries for mortgages because no one could view any properties. These restrictions are now lifted, and people are on the move again and calling the Office to talk about their mortgage options.

Wednesday 10^th June – the FCA sent out a questionnaire to advice firms asking for details of our financial position and how lockdown is affecting business. This seems like a good idea and should identify those firms who might be struggling financially. Luckily, lockdown hasn’t affected our financial position much. We have always managed our finances carefully and made sure that we retain more than enough cash in the business to cover the capital adequacy requirements.

Friday 12^th June – the FTSE 100 hits its highest level since lockdown at 6,164 although it fell back slightly to 6,090 by close of business.

Monday 15^th June – non essential shops are re-opening today along with a number of schools. A sign that things are starting to return to normality. Everyone is now back in work and it feels normal again.

Thursday 18^th June – further warnings from the FCA about the risk of scams including a story about the FCA’s own website being cloned! Please be vigilant.

Friday 19^th June – another week of improvement in the FTSE 100 index, closing up again at 6,290 the highest weekly close yet.

Monday 22^nd June – yesterday the Government announced the re-opening of pubs and restaurants from next week the 4^th of July. This feels like a real step forward. Whilst people are still rightly concerned about a second spike it feels like it’s the right time to start to get back to “normal”.

Friday 26^th June – once again a relatively strong week in the markets. The FTSE 100 closed at 6,176 slightly down on last weeks high, but still well over 6,000.

Although we are by no means out of the woods and back to normal, it seems like the right time to bring our lockdown diary entries to a close, coinciding with end of the Governments daily updates which ended last week.. We might look back on the diary in years to come to remind ourselves just what turbulent times these have been. Let’s hope so because that will mean we’ve returned to a sense of normality.