Riding the wave together

As the world begins its first tentative steps out of lockdown, Dolfin’s Head of Business Development Georgios Ercan and Head of Investment Management Simon Black reflect on the preoccupations our clients have expressed during the Covid-19 crisis

At Dolfin, we work with clients across the world. This has given us a fascinating perspective on the reactions of individuals, businesses and markets as the pandemic has engulfed the globe, moving inexorably from east to west.

“As the virus began to spread in late February and early March, we were receiving the same calls from so many of our clients,” Georgios recalls. “They asked us how we were and whether we were working from home, and at first we had to say that here in London, everything was normal. We were still eating out in restaurants, shops were open and so was our office. But the markets were unsettled and volatile, and soon we were in lockdown.”

Initially, the opportunities presented by the unsettled markets meant a higher volume of trading, Georgios says. But with lockdown came a realisation of the deteriorating global macro and GDP levels, and many clients took a step back, valuing the chance to slow down and spend time with their families.

“But that becomes tiring after a while,” he notes. “Many of our clients are entrepreneurs, so they are used to being busy. Now they’re stuck at home, reading the news and watching the markets, and they want to interact with us. I’m on video calls all day, from 8am until 10pm. People have been asking us about the interventions the authorities are taking and whether there are selling opportunities. Clients are bored, so they’re trying to read the markets and come up with ideas. But we believe it would be imprudent to go to the market with strong views when no one knows how this will play out.”

Not just business as usual

The way we have communicated with our clients has changed in ways more profound than simply a pivot from face-to-face meetings to video conferencing, Simon observes.

“There is a difference between a financial crisis and a health one,” he says. “This has impacted everyone in the same way, as has isolation. People might ask us how much money they have lost, and they are reassured when we tell them the answer. But the conversations, even with clients I have never met, soon move on to how we are coping with lockdown, and end with wishes to stay well and safe. Even clients who are normally the most businesslike now want to say personal words. There is a wave of caring sweeping round the world.”

“People might ask us how much money they have lost, and they are reassured when we tell them the answer.” – Simon Black, Dolfin

Almost all Dolfin’s clients have embraced new, tech-enabled ways of communicating, Simon says.

“Video calls can’t replace face-to-face meetings, but clients young and old want them. The initial weirdness has gone and location no longer matters. We are offering more frequent, more focused updates and trying to offer interesting snippets of information, and people are hungry to be informed and learn. We wondered how many would attend our investment update webinars, but attendance has been higher than when we held them in the office. For those without families, they are an opportunity for some interaction; for those with children at home, it’s an excuse to hide in a room alone!”

Towards a new normal

With lockdown easing around the world, investors are beginning to face the future, asking questions about what a post-Covid world will look like and how the markets will respond. But these questions are impossible to answer with any great certainty, Simon says.

“What we have tried to do is be open and honest. Government, central banks, Standard & Poor’s, CEOs – we are all going through this for the first time. No one knows what happens next. We are saying to our clients that we will talk them through our thought process, but we can’t predict the future. We predicted a lot of the downside going into this and our focus is on continuing to preserve and grow clients’ wealth and not chase the markets. We don’t know how bad things are going to get. There are a lot of known unknowns out there and I believe we can earn our clients’ trust by admitting that, and saying that we are doing the best we can.”

What is certain, though, is that not only investment portfolios but everyday life will change once the crisis has passed.

“The removal of restrictions is not the same as resuming normal life,” Simon explains. “We have been doing a lot of work on forecasting the next stage of normality and the impact on consumption trends. It’s impossible to imagine planes flying at full capacity or people choosing to go on cruise holidays. And how many goods can go on to the e-commerce table? Cars can’t, bananas can’t; people want to choose their own. People have been forced into e-commerce during lockdown, but how many will stay? Will people still be using Uber Eats when they can go to restaurants again? All this has a huge impact on portfolios.”

“We have been prudent and our conversations with our clients have been positive.” – Georgios Ercan, Dolfin

“Could this be a turning point for the aviation industry?” adds Georgios. “We are moving towards driverless cars – could there be pilotless planes? Will there be an even greater push towards automation as people adapt to a new normality? We could see 10 per cent of the UK population unemployed – will people diversify their skill sets to hedge their bets? This is a time of change, and it won’t stop at a personal, human level; it will spread through conglomerates around the world.”

While so much uncertainty remains and so many questions are yet to be answered, the Dolfin team continue to work from home, talking to one another and to our clients, adjusting to each new phase of normal as it arrives.

“There was some panic initially, in the first few weeks,” Georgios says. “But it’s smoothed out. Clients understand that we have been under pressure and that it might take a little longer to answer their questions. We have been prudent and our conversations with our clients have been positive. As a result, we’ve been rewarded with further assets, which is what any firm would want.”