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The pandemic’s impact on private clients
In the wake of troubling new research about the susceptibility of retirees to the economic downturn, lawyers in the private client space are needed more than ever before.
Jerome Doraisamy
Earlier this week, Allianz Retire+ published research which reveals the “harsh” economic impact of the global coronavirus pandemic on existing and prospective retirees.
Further, almost 80 per cent of current and prospective retirees have not sought financial advice since the outbreak of coronavirus, 66 per cent of retirees do not feel that Australia’s superannuation system will provide them with a dignified retirement, and less than a third of retirees understand investment options available in superannuation.
“COVID-19 is taking a terrible toll on the economic wellbeing of many retirees,” said Allianz Retire+ CEO Matt Rady.
“In addition to health concerns about the virus, and not being able [to] see loved ones as much, retirees are yet again suffering from the share market [roller-coaster].
“These results demonstrate that the Australian superannuation system, which is lauded as one of the best systems globally, is not working for a great deal of the people it’s designed for. COVID-19’s impact has exposed shortcomings in retirement product design, access to financial advice and superannuation education.”
The economic uncertainty created by COVID-19, both on a social and economic level, has made it difficult for many clients to make decisions on their own affairs, McCabe Curwood special counsel Claire Williamson (pictured) told Lawyers Weekly.
“The anxiety from the current situation has seen some clients rush to get their affairs in order but others are finding it difficult to plan for the future,” she outlined.
“The challenges for private client advisers are in supporting clients to make decisions and, where there are a number of family members involved, to reach a consensus where each family member will have a different outlook on the long-term effects of the pandemic.”
In order to overcome such challenges, lawyers must “recognise the stress felt by clients and support them accordingly in [decision-making]”, she argued.
“Encourage clients to put in place the best possible arrangements in the face of uncertainty.”
This being said, there are opportunities for lawyers in the private clients space, Ms Williamson noted.
“Asset protection strategies have become more important in the current climate, where businesses that have been successful for some time are challenged by a sudden change in circumstances. Clients may now require robust asset protection strategies that will protect their wealth from business risks, such as restructuring the ownership or control of assets,” she explained.
“If clients have provided assistance to their children, they should structure this in a way that considers asset protection. Estate planning should ensure that the client has optimum arrangements in place to pass assets in structures that provide maximum asset protection and tax effectiveness for their beneficiaries.”
Looking ahead, Ms Williamson predicted that the financial uncertainty being experienced by clients across the board means that, “more than ever, we need to be providing good value and are working efficiently”.
“The use of technology that has enabled us to work remotely and to meet with clients and execute documents over videoconferencing has been a major shift in how we work but there have been very few negatives,” she concluded.
“We will look to retain this flexibility in how we provide services in the [longer-term].”
Jerome Doraisamy
Jerome Doraisamy is the editor of Lawyers Weekly and HR Leader. He has worked at Momentum Media as a journalist on Lawyers Weekly since February 2018, and has served as editor since March 2022. In June 2024, he also assumed the editorship of HR Leader. Jerome is also the author of The Wellness Doctrines book series, an admitted solicitor in NSW, and a board director of the Minds Count Foundation.
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