Profile: How lockdown inspired an advice firm to innovate

Covid-19 has so dominated our lives for the past six months that it is difficult to think of anything that has not been affected by it.

Although none of us would actively choose the constraints we have been living with since then, the national lockdown in particular gave firms in a range of sectors – provided they still had a business – an opportunity to look at their efficiency.

For Scottish IFA/wealth management firm Cornerstone Asset Management, lockdown
was a chance to review the delivery of its services and to create a pension report service that generated new leads.

“Covid-19 caught us by surprise – not just the severity, but the speed at which it took hold and how businesses had to react very quickly,” says Cornerstone partner Jason Hemmings. “As a business we decided at the outset that we would keep every member of staff on and pay their gross salaries in full.”

Hemmings recalls how portfolios plummeted in March and says Snapshot Pensions – its pension report service – was launched to help people at a time when they needed reassurance.

“I had the idea for Snapshot Pensions two or three years ago. It was going to be a second-opinion service for people with pensions, but finding the time to do it was difficult,” says Hemmings. “Then we had lockdown, which gave us the time to support it.”

Snapshot Pensions provides free pension reports focusing on three areas: risk, charges and performance.

“We worked out that every Snapshot report takes 20-30 minutes to produce, with no obligation, and we had the resources to do it. We thought it could help people when the markets were in turmoil. We didn’t want people to be sitting in their houses worrying due to a lack of knowledge and awareness, and saw it as an opportunity for people to decide they might want some advice and become a client.”

Snapshot Pensions has a separate website from that of Cornerstone and has had around 2,500 visits a month, with 100 reports requested each month. However, pension providers have been slow in coming up with the required information due to Covid-19, so Hemmings does not want requests to increase beyond current levels.

“It is difficult because, when we originally launched the service, we had plenty of capacity to help someone in need who maybe couldn’t afford financial advice. We’ve had requests from people with £1,000 in their pension, but we have to strike a balance.”

Bringing in restrictions

Striking that balance means in future there will need to be some restrictions in place. The service will be used to build up the brand, but eventually the minimum asset level for the service will be increased, initially to around £50,000 and possibly again to £100,000.

“There is an argument to say it’s a loss leader, but more people engaging with it are the ‘right’ type of client,” says Hemmings. “We’ve seen pensions with charges of more than 3 per cent, and a client was languishing in cash for the past seven years but she didn’t know about it.”

Hemmings adds another reason for starting Snapshot Pensions is that the growing number of direct-to-consumer services such as PensionBee pay no attention to what people already have.

“All you’re going to do there is transfer your pension account, but it’s very naïve to encourage people to transfer to something that could be good, without knowing if what they have is better.”

Hemmings started his financial services career in banking straight from school. He joined Friends Provident at the age of 21 and moved to the IFA sector with Sedgwick, then Albannach Financial Management. After Albannach was sold to Towergate in 2008, Hemmings started to think about leaving.

“Towergate was a national consolidator and was new to consolidation. It was trying to pull together different businesses with different ethics, but the problem was that the glue didn’t stick,” he says.

Starting from scratch

So he and fellow Cornerstone partner Alan Reid left Albannach to set up their own firm in 2010. Cornerstone was established from a “clean sheet of paper”, with no clients.

“We surveyed the target market to establish what it looked for in a financial planner. It was the ‘soft’ things that were appreciated, like transparency and service. People wanted a relationship with their financial planner, so it wasn’t just about investment performance,” says Hemmings.

“We’ve built the business around what the average client wants, not what they had in the past.”

Cornerstone has not changed its business model since the pandemic, but like many firms it has adapted to conducting virtual meetings while working from home.

“The biggest thing for us was how we interacted with clients. For a significant amount of time we were unavailable to meet face to face,” says Hemmings. He adds Cornerstone had to “adopt an open mind” to work out how to conduct meetings virtually with clients.

“We used technology to communicate with clients individually in the first week of the pandemic. We work in a paperless environment anyway and we adapted it to working from home. It created some challenges, but 99 per cent of business continued to run smoothly,” he says.

As a result, Cornerstone is now more familiar with and confident using software such as DocuSign – which gets paperwork signed electronically – than it was before lockdown. However, Hemmings does not want remote services to render face-to-face services obsolete in the future.

Maintaining eye contact

“I hope personal face-to-face advice that clients used to receive doesn’t diminish because, when people entrust you to look after their wealth, they want to see the whites of your eyes. It’s very difficult to engage with prospective clients you have not yet met in person.”

One thing Hemmings thinks has changed for the better since lockdown is the nature of the relationship advisers have with clients after meeting over video links from home.

“The formal dress sense of financial planning has been toned down and that’s good because it creates a barrier. People dress more casually over video links, so you get to see the real person behind the suit and tie,” he says. “Wearing a tie doesn’t make you clever!”