By Duncan MacIntyre, UK chief executive at Lombard Odier

Crises throw the things that matter into sharp relief.

For our clients, as for all of us, that means family and friends. At heart, the service we offer is about providing for one’s family.

At the same time, a period of collective self-isolation has meant a slower pace of life, and more time for forward planning. Busy clients are not travelling; they are reflecting. Our wealth planners are spending more time reviewing the wealth structures and succession plans they have in place.

A recent analysis of proposed UK inheritance tax reforms we sent out triggered an unexpectedly large response. And we are simply talking to our clients a lot more: a quick 10-minute check in has become an hour’s call, perhaps on a walk, accompanied by birdsong.

Last week, a client introduced his 18-year old son on an early morning investment call between himself, his banker and portfolio manager. His family was all sitting at the kitchen table, so it seemed a natural thing to do. Up to this point, the son had been a silent shareholder in the family wealth. Now he’s had a taste of what it’s like making investment decisions, in a very immediate and personal financial lesson.

For us, opportunities like this to connect with the next generation are valuable. They are an unexpected silver lining in a global crisis.

Duncan MacIntyre

From an investment perspective, many of our clients are looking to be opportunistic and identify market mispricing. The global financial crisis looms large in their memories. They ask us many questions: What’s the outlook for UK business? Didn’t high yield recover within six months last time around?

Our clients want to talk directly to our experts in healthcare, technology and other sectors. Our research helps them make concrete decisions on individual securities. They are looking for ‘all-weather’ stocks. Almost all spend a long time reading newspapers. What they want from us is investment and market analysis, not news wraps. How do today’s markets compare with those in previous downturns? What can history and experience teach us?

Most clients appreciate that we are forecasting scenarios, with a greater or lesser degree of probability. There is no certainty ahead.

Our core scenario foresees a gradual economic recovery in the second half of 2020, but that global GDP will be significantly below zero this year for the first time in decades. Overall, our portfolios are positioned cautiously, with a high level of liquidity. We have been gradually reducing risk since mid-March, and also increasing portfolio hedges, including positioning in the Japanese yen, a higher exposure to gold, and long put options on equity indices. This has reduced our exposure to assets that are more sensitive to the oil price, and given us an overweight in assets supported by central bank purchasing programmes, such as investment grade credit. In currencies, we believe the euro could be close to a bottom versus the dollar.

Our investment teams have also been doing a lot of thinking about companies with long-term sustainable business models, and about tomorrow’s investment themes, including digital infrastructure, cashless payments, e-commerce, ‘edtech’ and population monitoring tools.

This moves us beyond the immediate aftermath of the pandemic to the structural changes underway in our economies, and in our way of life. If we have learnt anything from previous crises, it is that a focus on the long-term is the ultimate way to preserve and grow our clients’ wealth over generations.

For now, we are just relishing the opportunity to speak with them more.