Life After Lockdown: What Happens Next?

Caroline Burkart and Tasha Vashisht, 5 May 2020


What will the "new normal" look like for the wealth management sector as state-enforced suppression of business activity and much social life begins to slacken off? Authors from Aon (at the business formerly known as Scorpio) take a look.

Probably the biggest question that wealth managers will have asked themselves in the past weeks is what happens when the lockdowns unwind? What will the “new normal” look like and how will people work and deal with clients? Well, an organisation well placed to think about some of these points is Aon. Authors Caroline Burkart (associate partner) and Tasha Vashisht (head of Thought Leadership Development), Client Insight, Aon, take a look at what is on the cards. 

The editors are pleased to share these views and invite responses. The usual editorial disclaimers apply, of course. To jump into the conversation, email or 

With lockdowns around the world continuing, it is only natural for the wealth management industry to contemplate what life will look like afterwards. The experience in Asia, where Hong Kong and Singapore have both been hit by second waves of COVID-19 infections, tells us that a linear recovery is unlikely. Firms are right to prepare themselves for a protracted and phased approach.

Until now, business leaders have been grappling with stabilising the business – including transitioning to working from home, supporting client requests and preparing advisors for a significant period of volatility. However, almost daily, we are hearing the phrase “the new normal”, signalling that we will emerge into a forever-changed environment.

Our own data leads us to agree that the old ways of operating will be left in the past. This will be driven either by commercial necessity, prolonged social distancing or a combination of both.

On the commercial side of the equation, analysis undertaken by us using a proxy group of leading UK wealth firms (not including private banks) to calculate how growth has been affected between 2007 – 2019, has shown that average pre-tax reported profit margins have declined by nearly 40 per cent from 22 per cent to 13 per cent (proprietary analysis conducted by Aon). With margin pressure expected to continue in the current climate, it will be vital to embrace new technology as an integral part of the client experience to support productivity more effectively.

Right now, clients aren’t panicking but may feel overloaded with information

Data collected before the crisis provides a snapshot of client sentiment. In the UK, for example, wealthy individuals were concerned about the prospects of volatility in the global stock markets and equity valuations. However, 56 per cent of clients agreed that there would be opportunities from volatility in financial markets, which has indeed returned with a vengeance (Research conducted by Aon for the BNP Paribas “Global Entrepreneur Report 2019”). Anecdotal evidence from wealth managers underlines that some clients are seeing opportunities and are not panicking but are topping up mandates, moving out of cash and bonds into equities.

Of course, the volume and frequency of information on market movements risks overloading clients. Happily, many are turning to their wealth managers for guidance on how to optimise their investment portfolios and seize the opportunity, eagerly digesting the commentary and insights being published.
Yet some will be let down by the experience of trying to decipher these insights. Our client survey data consistently shows that investors struggle to ascertain the key points from the communications they receive from wealth managers or what actions they should take. Often, from the client’s perspective, such reports feel as though they have been written for a professional investor and they cannot make the link to their own portfolios.

After lockdown, digital shortcomings will be magnified - and less excusable.

The ways that firms can prove that they are truly client-centric are evolving from nice gestures that clients might enjoy but offer no long-term value (e.g. events and hospitality) to providing them with insight and ideas which are aligned to their interests and help them to meet their goals. 

But digital tools and data management have been seen as industry weak points. The online tools provided to clients are often perceived as neither innovative nor user-friendly. Going into the crisis, 22 per cent of clients reported problems with analysing performance data online, 14 per cent with the log-in procedures and 34 per cent were concerned with data security. (Research conducted by Aon and Appway for “Innovate to Succeed” in 2019).

During the lockdown, clients and managers alike have been forced to take a crash-course in their firm’s online capabilities. A poor experience will be a very serious point of contention if it prevents clients from engaging with their portfolio data or planning for their futures when they need to most.

Many firms have had to make the leap into a digital communication model but may find that client demands don’t stop there. It seems likely that investors will want access to more tools and to complete more activities independently, rather than waiting for the return of face-to-face meetings.

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