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[GRTV] The winners and losers from Covid-19

Covid-19 has left some clear winners and losers in its wake, says Russell Hutchinson of Chatswood Consulting.

Monday, October 12th 2020, 11:29AM

Good Returns: So COVID-19. Who are the winners? Who are the losers?

Russell Hutchinson: It's really fascinating, and of course, if we compare ourselves to the 1918 pandemic, we probably still have a couple of years to run of this. So, it might be a bit early to declare winners and losers. There was a health worker interviewed in Kerala, and they were being interviewed by the BBC because they've done quite well. And this is in India. They've got some more distressing numbers now, but at that stage, they were doing quite well. And were being interview, "Why are you doing well, and isn't this a great victory?" And he said, "No, no, no. We've won the quarter final." So there is a long way to run. There's a long way before we win the final.

But, there are some definite winners and losers in this process. Bank assurance is continuing to be knocked around by the COVID crisis because obviously during lockdown, we had almost a freeze on the house movement. So there should have been. It virtually was. And new to bank customers, of course, very, very difficult in a... So everything went into a deep freeze. That has unfrozen, fortunately, but even so, some other long running issues around bank assurance have been slowing that channel down.

So bank assurance is on the loser side.

Continuing to decline.

So on the winner's side?

On the winners... direct and advisors. And put direct to one side, but for advisors, advisors are a resilient channel. And during lockdown, some advisers did nothing and some did heaps and some did something in between. But post lockdown, advisors have to look around and, more than larger businesses, they have to get moving again. And because they're flexible and they operate in the market and they can change procedures and processes quite quickly, especially smaller advisory firms, and by that I mean anything under 50 people is small. So that includes some quite substantial firms. They are good at trimming the sails and adjusting to the weather and doing well.

And they seem to be getting back to normal at the moment, and people are realizing the value of advice.

Advice is so much more important when things are complicated, and things have got complicated even more so due to COVID and what might be happening with incomes and what might be happening with uncertainty and things like wage subsidies and benefits and people losing jobs and getting jobs and just creates loads more financial complexity, and advisors handle that really well. Whereas things like more slow, structured channels, like banks, they handle that poorly.

Yeah. And just finally, adviser regulation. What worries you the most at the moment?

In a way, the delay, although it was necessary from in June this year to March next year, absolutely had to be done, but it has meant again, that some people went through a period where they wrote less business and kind of went to sleep on the idea of the introduction of new law. And so that's a factor. Are people going to get ready enough by then? And also people seem to be getting ready for the wrong things. So-

What do you mean by that?

Well, it's been really easy to focus on education. I've got to get level five, right? So people have done that. Actually, you've got the most time to get that. You're still going to have two years from March to meet competence because that's when we enter that period. People focus on code, and code is important, but people focus very little say on governance. And if you get governance right, then you can make change in your business and be confident that it's being adhered to. So that's really kind of where the game really starts.

So something which they haven't really focused on at all, but they should be.

Or many haven't. Obviously there are all sorts of different businesses at different stages.

Yeah. Excellent. Oh, lots of going on out there.

It's huge.

Thank you, Russell. It's been really good to catch up with you, and nice to have you in the studio.

Thank you very much. It's brilliant.

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« [GRTV] Depressing imbalances in IP market: Hutchinson[GRTV] Financial advice transformed my life: Shanks »

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