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Dave Robinson on why It's the 'Chartered IFA Way or The Highway' · Financial Planner Life Podcast

• 0:00
  SPEAKER_00: And today's guest is Dave Robinston.
• 0:02
  SPEAKER_00: Dave is a chartered financial planner for Centurion Finanning, and it is IFA for the highway.
• 0:09
  SPEAKER_00: With Dave, and we talk about the importance of IFA and why there needs to be an IFA academy.
• 0:17
  SPEAKER_00: We dig deep into Dave Robinson's past, how he got into the financial planning.
• 0:21
  SPEAKER_00: He actually started out in accountancy and moved across into financial planning.
• 0:25
  SPEAKER_00: He digs deep and dead deep around his business, his charging structure, and why he charges that and the plans and the changes that he's looking to make and evolve as a business.
• 0:34
  SPEAKER_00: We talk about trainees, how they fit within his company, how he supports them.
• 0:40
  SPEAKER_00: We also talk about his eldest son who has a genetic disorder.
• 0:44
  SPEAKER_00: And that's given him a personal interest in financial planning for dependents with special needs.
• 0:51
  SPEAKER_00: And he gets heavily involved in that.
• 0:53
  SPEAKER_00: But he also has lots of other specialist areas, things like investment management for later life, personal injury, working with attorneys, deputies, and trustees and beneficiaries of those that have gone through the courts, maybe through medical negligence.
• 1:06
  SPEAKER_00: It's a very deep dive into Dave Robinson's career.
• 1:10
  SPEAKER_00: And I find it super interesting to talk to Dave.
• 1:12
  SPEAKER_00: He's hugely passionate about the profession.
• 1:14
  SPEAKER_00: And let's take it in now and where he thinks it should go.
• 1:18
  SPEAKER_00: I hope you enjoy this episode.
• 1:27
  SPEAKER_00: Dave, thank you so much for joining me today on the Financial Planer Life Podcast.
• 1:31
  SPEAKER_00: How are you?
• 1:32
  SPEAKER_00: I'm very well, thanks, Tom.
• 1:33
  SPEAKER_00: I'm very well and I'm pleased to be here.
• 1:35
  SPEAKER_00: Amazing.
• 1:36
  SPEAKER_00: I've been wanting to get you on the podcast for so long because you you comment a lot on my post and you've always got a lot to say.
• 1:43
  SPEAKER_00: And it always sounds really interesting.
• 1:45
  SPEAKER_00: You're very passionate about financial planning.
• 1:48
  SPEAKER_00: You're passionate about the careers within financial planning.
• 1:50
  SPEAKER_00: You're you're passionate about how the profession is promoted, and you're also passionate about how it's growing and the way it grows and the way these newbies are coming into the profession, and what style and approach are they taking towards becoming a financial advisor or financial planner, and what route distribution channels they go down to do this, and how they actually deliver the advice to the clients.
• 2:12
  SPEAKER_00: And you're a very client-centric individual.
• 2:15
  SPEAKER_00: Like that comes across really, really clearly.
• 2:18
  SPEAKER_00: And you're somebody as well that's kind of coming to the end of your career, aren't you?
• 2:23
  SPEAKER_02: Very kind of you to point that out, Sam.
• 2:25
  SPEAKER_02: But yes, uh, you can you can probably tell, looking at me, I am closer towards the end of my career than the start of it.
• 2:33
  SPEAKER_02: Let's put it that way.
• 2:35
  SPEAKER_00: Yeah, it wasn't an observation.
• 2:37
  SPEAKER_00: It was more what you told me on the telephone.
• 2:39
  SPEAKER_00: Yeah, uh absolutely right, Sam.
• 2:41
  SPEAKER_00: Yes.
• 2:41
  SPEAKER_00: Fantastic.
• 2:42
  SPEAKER_00: And and I think sometimes, do you know what, Dave?
• 2:45
  SPEAKER_00: I think sometimes the profession likes to bash, it likes to bash a little bit of the older boys or the older girls that work within the profession.
• 2:54
  SPEAKER_00: You know, they I hear dinosaur being banded around and all that kind of stuff.
• 2:58
  SPEAKER_00: And I think to myself, sometimes that's a bit unjust and a bit unfair because individuals like you have been around within financial planning for years.
• 3:06
  SPEAKER_00: You've seen it change dramatically.
• 3:08
  SPEAKER_00: Um, and also people like yourself, and what I've learned from you, your values, your intrinsic values about how you run your business, how you deliver advice to clients.
• 3:16
  SPEAKER_00: Sounds like it hasn't changed from the very beginning, anyway.
• 3:18
  SPEAKER_00: And the profession, if anything, is catching up with you.
• 3:22
  SPEAKER_02: I I would like to hope so.
• 3:23
  SPEAKER_02: Yeah, I guess.
• 3:24
  SPEAKER_02: Yes.
• 3:24
  SPEAKER_02: And I I guess one of the crucial things, Sam, is that this was my second career.
• 3:30
  SPEAKER_02: You know, I I got into regulated financial advice after probably about a nine, 10-year career in accountancy.
• 3:39
  SPEAKER_02: So my first qualification was a couple of chartered accountancy qualifications.
• 3:44
  SPEAKER_02: And I think very simply, that has set the tone for my financial advice career, really.
• 3:51
  SPEAKER_02: Um, you know, I came at it from a professional background.
• 3:56
  SPEAKER_02: Um, that that was probably the crucial difference, really.
• 3:59
  SPEAKER_02: And that, as you say, that's just flowed through my 40-odd year career.
• 4:05
  SPEAKER_00: So 40 years ago, you were working as an accountant and you decided that you wanted to move into financial planning, yeah.
• 4:10
  SPEAKER_02: Yeah, yeah, and and why?
• 4:13
  SPEAKER_02: Yeah, it's a good question.
• 4:14
  SPEAKER_02: Um, I I suppose um I got into accountancy because I wanted to build what I would call was a professional career, which broadly speaking, was advising people about a technical subject that I was quite interested in.
• 4:34
  SPEAKER_02: But what I found with accountancy was very often I was meeting the same people and talking about the same sort of things, the same issues, the same problems, the same potential solutions, really on a very routine, very regular basis.
• 4:51
  SPEAKER_02: And I also found that, you know, all accountants will tell you they're proactive individuals.
• 4:57
  SPEAKER_02: And probably 30 or 40 years down the line, they are a lot more proactive than we used to be.
• 5:04
  SPEAKER_02: But I just felt there was something a little bit better out there.
• 5:09
  SPEAKER_02: Now I was in general practice, I was dealing with a lot of small, medium-sized enterprises and their owners.
• 5:17
  SPEAKER_02: The archetypal example that people probably will understand is that every year we'd be looking at cash flow, we'd realize we had surplus cash flow, we'd be looking at the company tax position, we will be looking at the cash in the bank, you know, we'd be saying, right, how do we extract some of this money tax efficiently?
• 5:35
  SPEAKER_02: What we probably should do is a pension contribution.
• 5:38
  SPEAKER_02: So in those days, you know, there was no independent financial advice profession, but many clients had their own sort of financial advisor to use it in a loose sense.
• 5:53
  SPEAKER_02: All clients would say to me, okay, well, how do we go about doing that?
• 5:56
  SPEAKER_02: And I'd say, Well, I can't give that bit of advice.
• 5:58
  SPEAKER_02: What we've got to do is go and find someone who can talk to you about pensions.
• 6:02
  SPEAKER_02: And so we did.
• 6:04
  SPEAKER_02: Um, and one way or another, I just sort of thought, okay, these people are walking in after I've probably done a year's worth of work and charged, you know, uh quite a reasonable fee for it, etc.
• 6:18
  SPEAKER_02: These guys are just walking in with an application form for a pension contribution and walking out again about half an hour later with a whacking great commission payment in the pocket.
• 6:30
  SPEAKER_02: Um, and I thought, hmm, A, that looks a bit like a commercial opportunity.
• 6:37
  SPEAKER_02: But the more I looked at it, the more I thought, you know what?
• 6:41
  SPEAKER_02: Um I probably, after having done a bit of digging, know more about these pension products than a lot of the people who are actually making the recommendations.
• 6:52
  SPEAKER_02: And I just began to think, I, you know, I just think there's a better way to give financial advice.
• 7:00
  SPEAKER_02: Now, coincidentally, this was all sort of aligned around the time of the first Financial Services Act.
• 7:07
  SPEAKER_02: I know people looking at me won't believe I was around in 1986, but I was.
• 7:12
  SPEAKER_02: Um and for the first time ever, regulation began to happen.
• 7:19
  SPEAKER_02: Now, one of the crucial reasons I think regulation began to happen was because at the market at that time, the product distribution channel on the market really was dominated by about 10 very large sales forces.
• 7:34
  SPEAKER_02: Most of them operated by big insurance companies.
• 7:38
  SPEAKER_02: Um and for uh what that meant was the product distribution, the product distributors did not come under any great sort of pressure to develop particularly good products or to control charges and all this kind of thing.
• 7:56
  SPEAKER_02: And what the first Financial Services Act did in part was it it introduced the concept of independent financial advice.
• 8:05
  SPEAKER_02: So what that really meant was separate out the advice process from the product manufacture.
• 8:14
  SPEAKER_02: And one of the philosophical reasons for it, I think, was to um put a sort of tranche of advisors in a position where they could look at the reasonability of all these products one way or another, compare one against the other, and it imposed on them a duty to select the best product, to put it very simply.
• 8:38
  SPEAKER_02: Now, one of the crucial things that that should do, taken to its logical conclusion, is it should put pressure on the product manufacturers to manufacture better and more cost-effective products.
• 8:53
  SPEAKER_02: And I saw that independent financial advice opportunities a really good step forward.
• 9:00
  SPEAKER_02: I thought that is, you know, that's a step towards a profession.
• 9:06
  SPEAKER_02: I didn't want to be a product salesman, I was philosophically opposed to it because I came from a professional background.
• 9:13
  SPEAKER_02: I wanted to give advice and I wanted to charge a fee for it.
• 9:17
  SPEAKER_02: Um and the the that independent profession took a little while to evolve.
• 9:24
  SPEAKER_02: It certainly wasn't possible to join it at that stage without having a background in sales.
• 9:33
  SPEAKER_02: It really wasn't.
• 9:34
  SPEAKER_02: There was no way in.
• 9:36
  SPEAKER_02: So what I really did was I I sort of started by trying to go direct into IFA work and I put it to the partners in the firm.
• 9:45
  SPEAKER_02: Here's an opportunity.
• 9:47
  SPEAKER_02: I've been spending two or three years trying to integrate regular, well, financial advice with all the accountancy and tax advice I've been giving.
• 9:57
  SPEAKER_02: Clients like it, it's a real opportunity for the firm.
• 10:02
  SPEAKER_02: Maybe what I should do is just go off and train again, and we can build an IFA practice.
• 10:06
  SPEAKER_02: And the partners were just frankly scared to death by the concept.
• 10:12
  SPEAKER_02: Oh no, it's a bit scary, it's all regulated, it's going to be really tricky.
• 10:16
  SPEAKER_02: What's really interesting is that firm that I trained in was then absorbed by Mazars, which is probably the first and foremost financial planning business in any major chartered accountant.
• 10:29
  SPEAKER_02: So ultimately it did happen in that firm, but it wasn't going to happen for me.
• 10:33
  SPEAKER_02: So I had to go and find a route into financial advice.
• 10:38
  SPEAKER_02: And I I was, I suppose, at that stage, late 20s, um, and uh it was a bit of a jump into the unknown, but I thought, well, it's fine, I've got an accountancy, well, two accountancy qualifications to fall back on if I need to.
• 10:55
  SPEAKER_02: Let's just go and give it a go.
• 10:57
  SPEAKER_02: Um, and so I started to look around, and what became quite apparent to me was that there were plenty of sales forces out there that were quite happy to train me, particularly with my accountancy qualification.
• 11:11
  SPEAKER_02: Um the routing seemed to be that I had to write out a list of people's names and telephone numbers, virtually everybody I knew.
• 11:22
  SPEAKER_02: I would then go to an academy in a loose sense, they would teach me about a very basic product, and let's call it very simply term assurance.
• 11:34
  SPEAKER_02: My job then would be to go and sell as much of that product to as many of those people on that list as I could.
• 11:41
  SPEAKER_02: And if I sold enough, they would then teach me about a better product, a more complicated one.
• 11:50
  SPEAKER_02: Um my role would then be to go back to those people and say, right, okay, I've now come across a better product.
• 11:57
  SPEAKER_02: Um, that one that I've just sold you probably isn't quite as good as it could have been.
• 12:02
  SPEAKER_02: What we need to talk about now is this one.
• 12:05
  SPEAKER_02: Now I immediately thought that's just rubbish, that's product distribution, that's not what I'm into.
• 12:10
  SPEAKER_02: Um, but I managed to find a sort of halfway house through Teachers Assurance.
• 12:16
  SPEAKER_02: So I moved from Yorkshire to Bournemouth, literally, to go and train in financial advice.
• 12:22
  SPEAKER_02: The reason why I went to Teachers Assurance was it was very good technical training.
• 12:27
  SPEAKER_02: Um, and yes, it was it was commission-driven product sales, but there was a sort of safety net underneath it.
• 12:37
  SPEAKER_02: But it really was good quality technical training, and it wasn't aggressive sales.
• 12:42
  SPEAKER_02: The the company was owned by the NUT.
• 12:45
  SPEAKER_02: Um, you know, it was a very much more civilized way in than some of the other major sales forces.
• 12:52
  SPEAKER_02: So I did that quite happily and sort of found my feet.
• 12:57
  SPEAKER_02: But then, as soon as I could, I went independent, and I did that through an organization called Frizel down in Bournemouth, which was very well known.
• 13:07
  SPEAKER_02: Again, a lot of public sector clients, but the crucial difference was it was an independent financial advisor, and there was no product manufacture going on.
• 13:17
  SPEAKER_02: So I then sort of moved across to IFA, and then really what I started doing, I suppose, was mixing and matching a business, giving some accountancy advice, giving some tax advice.
• 13:29
  SPEAKER_02: Most of the clients were sort of um small businesses, etc., etc.
• 13:35
  SPEAKER_02: I was putting the regulated advice through an independent financial advisor.
• 13:39
  SPEAKER_02: I've got to know him pool down in Dorset.
• 13:42
  SPEAKER_02: All went quite happily for a period of probably five or six years.
• 13:48
  SPEAKER_02: Um then my career evolved, and and the the reason why that evolved was my first child was born.
• 13:55
  SPEAKER_02: And my first child was born with something very similar to Down syndrome.
• 14:00
  SPEAKER_02: Um now, for various reasons, um that really meant that my wife wanted to get back up towards Bristol, towards sort of family support, etc., etc.
• 14:12
  SPEAKER_02: I had no contacts whatsoever in Bristol, but I knew it wasn't going to be feasible to retain the client base down in Dorset.
• 14:19
  SPEAKER_02: So I I moved that into the financial advisor I'd been working with, and then thought, well, where do I go from here?
• 14:26
  SPEAKER_02: Now, one big advantage of having an accountancy qual or two charter accountancy qualifications was I was ready-made for a career back in accountancy practice, and at this stage, accountants were beginning to cotton on to the value of giving regulated financial advice in-house.
• 14:45
  SPEAKER_02: So I went to a firm in Bath.
• 14:48
  SPEAKER_02: Um, I joined the financial advice business.
• 14:51
  SPEAKER_02: Um, I was um giving independent financial advice, etc., etc.
• 14:57
  SPEAKER_02: That all went very well.
• 14:59
  SPEAKER_02: Probably wasn't the best firm I could have joined, but it was a local one.
• 15:03
  SPEAKER_02: It was all getting on very well.
• 15:04
  SPEAKER_02: But then what happened, which was really quite interesting, another bigger regional practice had decided that it should get into financial advice too.
• 15:15
  SPEAKER_02: And it had amongst its client base a small IFA practice comprising two partners, one of whom wanted to retire.
• 15:23
  SPEAKER_02: Now, coincidentally, that older partner went to his accountants and said, I need to sell my or I want to exit my business.
• 15:32
  SPEAKER_02: How do I go about it?
• 15:33
  SPEAKER_02: We can you help me sort of go and find someone to buy it, etc., etc.
• 15:38
  SPEAKER_02: And the accountants looked at it and said, Well, we want to get into financial advice.
• 15:43
  SPEAKER_02: Um, why don't we buy it from you?
• 15:46
  SPEAKER_02: Um and so he said, Well, great.
• 15:49
  SPEAKER_02: Um, so they bought this firm, and then they thought, what have we bought?
• 15:54
  SPEAKER_02: And how does it work?
• 15:56
  SPEAKER_02: And what's it do?
• 15:58
  SPEAKER_02: And how do we integrate it into our accountancy practice?
• 16:02
  SPEAKER_02: Unfortunately, by then I'd been knocking around in in Bath and Bristol for about 18 months, a couple of years, and they sort of I knew a couple of the partners.
• 16:13
  SPEAKER_02: And it was, oh, well, Dave's over there.
• 16:16
  SPEAKER_02: Dave's a chartered accountant, he's worked on our side of the fence, he's certainly worked on an independent financial advisor side of the fence.
• 16:23
  SPEAKER_02: Let's get him in.
• 16:25
  SPEAKER_02: So I had a quite an attractive offer to go and join them, and I spent a couple of years there integrating that business into the accountancy profession, and I learnt an awful lot doing it, an awful lot.
• 16:40
  SPEAKER_02: I won't go into the details, and not everything I learned was good, but um what that then did, one way or another, was it gave me the confidence to start my own firm.
• 16:50
  SPEAKER_02: Um and uh a very small amount of capital that I had behind me at that stage, and so I knew I was technically competent.
• 17:02
  SPEAKER_02: I think I had the energy, the drive to do it.
• 17:05
  SPEAKER_02: Um, I had sufficient capital to do it.
• 17:08
  SPEAKER_02: It was a lot easier in those days.
• 17:10
  SPEAKER_02: It was basically£10,000 in the bank, and and the FCA would um would approve you.
• 17:17
  SPEAKER_02: Um so a colleague and I set up an independent practice that went very well.
• 17:23
  SPEAKER_02: Um we ran that for quite a period of time, but then I got to the point where I thought this is getting more difficult to run now.
• 17:31
  SPEAKER_02: Um regulation was increasing.
• 17:36
  SPEAKER_02: Independent financial advice had not turned out to be all sunshine and roses.
• 17:44
  SPEAKER_02: Um the number of his scandals that erupted, the regulator was beginning to come down a lot harder.
• 17:51
  SPEAKER_02: Um, small firms were becoming increasingly expensive to run, etc., etc.
• 17:57
  SPEAKER_02: And um what basically I thought then was we've got to merge this into a bigger practice.
• 18:05
  SPEAKER_02: Um, I had two partners at the time, I had to bring them in on a uh uh a share uh ownership basis because I just didn't have enough capital or cash in the firm to pay them decent salaries.
• 18:17
  SPEAKER_02: We had a discussion about it, we we found an organization that we wanted to sell to.
• 18:23
  SPEAKER_02: We did sell, it was uh an investment manager.
• 18:27
  SPEAKER_02: What I very quickly found, I'd be we'd been a bit naive about this, but we were very quickly required to place all the clients into that investment manager's proposition.
• 18:40
  SPEAKER_02: It was right for some, it certainly wasn't right for others, and I just felt we let the clients down by doing it.
• 18:47
  SPEAKER_02: Um, I hadn't done it for the money, I definitely hadn't done it for the money.
• 18:50
  SPEAKER_02: I'd done it because I wanted to solve this problem of being a small firm and I wanted to focus more on client work and running a business.
• 18:56
  SPEAKER_02: The end result of that was we bought the client base back.
• 19:00
  SPEAKER_02: Right.
• 19:00
  unknown: Okay.
• 19:01
  SPEAKER_02: And uh probably cost me a little bit of money to do that, but we got control again.
• 19:07
  SPEAKER_02: Uh, and then what happened was the three of us decided to sort of go our separate ways.
• 19:13
  SPEAKER_02: I was still very keen to get into something that was bigger, the other two were less keen.
• 19:20
  SPEAKER_02: They believed that we had a successful small business.
• 19:24
  SPEAKER_02: Um, so we just decided quite amicably to go our separate ways.
• 19:30
  SPEAKER_02: By that stage, I'd been building some joint ventures through various small accountancy firms, and I'd come to the attention of one of the major regional accountancy practices.
• 19:42
  SPEAKER_02: They offered me a role to go in there as a director of the financial planning business and begin to transition it.
• 19:49
  SPEAKER_02: We'd been running, let's call it a financial planning firm.
• 19:54
  SPEAKER_02: This accountancy practice had a much more traditional, what I'd call IFA business, very much more transactional, very commission-driven, all this kind of thing.
• 20:04
  SPEAKER_02: And the partners had sort of seen what I'd do and been doing and how it was a bit different, and asked me to go in and help transition it.
• 20:12
  SPEAKER_02: So I did.
• 20:13
  SPEAKER_02: Um, and I spent 10 very happy years there.
• 20:17
  SPEAKER_02: And I suppose having got the financial planning business, or certainly large parts of it the way I wanted, I began to refocus on where I wanted to go with my client work.
• 20:31
  SPEAKER_02: Now, I have a child who's got very severe learning difficulties who will always be dependent for life.
• 20:38
  SPEAKER_02: Very quickly, I you know, I know nothing at all about biology.
• 20:42
  SPEAKER_02: This is a genetic disorder.
• 20:44
  SPEAKER_02: There is nothing at all to be done about it.
• 20:46
  SPEAKER_02: But what I very quickly realized was that um he was going to be a dependent for life.
• 20:53
  SPEAKER_02: I had to put in place some financial planning.
• 20:57
  SPEAKER_02: And very early on, I realized I needed to understand trusts in order to do that for all sorts of reasons.
• 21:03
  SPEAKER_02: So I uh began to build a sort of pro bono business, if you like.
• 21:10
  SPEAKER_02: Once I'd worked out what I needed to do for myself, I was very keen to spread it around other families of people with special needs, all done on a pro bono basis.
• 21:19
  SPEAKER_02: But I began to find that extremely worthwhile.
• 21:25
  SPEAKER_02: At that stage, then my parents and parents-in-law also began to develop all sorts of serious issues, um, uh health issues in later life.
• 21:35
  SPEAKER_02: You you sort of learn from experience, don't you?
• 21:39
  SPEAKER_02: But I very quickly realized that actually that was a real minefield as well.
• 21:43
  SPEAKER_02: And having found my way through it a couple of times, I realized other people need help through this minefield because of the work I've been doing with special needs, and I was doing pro bono sort of advice or helping people through various national charities.
• 22:00
  SPEAKER_02: I've come into contact with a lot of personal injury work.
• 22:04
  SPEAKER_02: Um, I was doing, I qualified as a trust practitioner by that stage.
• 22:08
  SPEAKER_02: I was doing a lot of trust work.
• 22:10
  SPEAKER_02: A lot of lawyers were referring to me because they realized I was a chartered accountant.
• 22:15
  SPEAKER_02: There was something a bit different about me.
• 22:17
  SPEAKER_02: I had personal experience of special needs, then of later life, all this kind of stuff.
• 22:23
  SPEAKER_02: And very quickly, what I sort of realized was what I found most rewarding about financial advice was not dealing with ultra-high net worth individuals.
• 22:35
  SPEAKER_02: I've done my fair share of that.
• 22:38
  SPEAKER_02: But what I found really rewarding was dealing with people who the FCA now has worked out are vulnerable, for want of a better word.
• 22:49
  SPEAKER_02: People who are talking about wealth, whatever wealth is, at the same time as they're probably suffering trauma, and very often at the same time when they've got lack of experience.
• 23:02
  SPEAKER_02: So wealth can be whatever wealth is.
• 23:04
  SPEAKER_02: And you know, I'm really quite proud of the fact that Centurion's client base, we've probably got a couple of clients in there where we're looking after 25,000.
• 23:14
  SPEAKER_02: That goes right through to some really very substantial personal injury awards.
• 23:20
  SPEAKER_02: So wealth is not the driving factor.
• 23:23
  SPEAKER_02: But what an awful lot of the clients have is trauma, either through illness or through a death of a loved one, or through um uh certainly a catastrophic injury or the development of a genetic disorder or whatever it may be.
• 23:42
  SPEAKER_02: Um, and uh very often they've also got lack of experience.
• 23:47
  SPEAKER_02: They know that they've got to take advice, um, but they haven't got any experience which will help them start off down that track.
• 23:58
  SPEAKER_02: Now, these people, as the FCA have realized, are very, very vulnerable to poor advice.
• 24:04
  SPEAKER_02: Um, and certainly if I go back to my Bournemouth days, I uh came across a practice that literally used to prey on elderly widows.
• 24:14
  SPEAKER_02: Did they?
• 24:14
  SPEAKER_02: Yeah, absolutely preyed on them.
• 24:17
  SPEAKER_02: And they were known for it.
• 24:19
  SPEAKER_02: Ultimately, they were put out of the business by the regulator.
• 24:23
  SPEAKER_02: But there was all sorts of uh backhanders going to undertakers, there were people employed to look through obituary notices, trace those back through the electoral roll, all that kind of stuff.
• 24:34
  SPEAKER_02: But I suppose what I found was this was really quite rewarding.
• 24:39
  SPEAKER_02: Um, and uh that's where I decided to spend the rest of my career.
• 24:46
  SPEAKER_02: Now, uh, what I'd also realised was the only way that I was really able to get control of the advice that was given and the way it was given and the fees that were charged for giving it, was to do it myself and set up the firm with like-minded people.
• 25:06
  SPEAKER_02: I had a couple of false starts with organizations that just I didn't see eye to eye with, just to put it very simply.
• 25:14
  SPEAKER_02: And the end result was that Stuart Dowty, who was my original partner in Centurion and I, we met each other through common interest in giving advice to personal injury claimants.
• 25:26
  SPEAKER_02: Um we realized that we just hit it off straight away.
• 25:30
  SPEAKER_02: We were very like-minded in terms of what we wanted to achieve, which was really build this specialist financial planning firm.
• 25:43
  SPEAKER_02: Um, and as it turns out, you know, it's been really quite attractive to other people who get this idea of specializing.
• 25:53
  SPEAKER_02: It's also gone well beyond specializing because what we have found is it just the way we do things is very attractive to people who are not in any way vulnerable.
• 26:03
  SPEAKER_02: They just realize that we're very professional about the way we look after people, the way we give advice.
• 26:10
  SPEAKER_02: And also, because we've got a very particular fees charging structure, we're actually really quite cost-effective when it comes to the clients pay for it.
• 26:20
  SPEAKER_02: So, um, and I suppose what we've evolved, we've we we put Centurion together in I think July 2016.
• 26:27
  SPEAKER_02: So we've been going for six years.
• 26:30
  SPEAKER_02: We've now built it to a firm of 11 advisors.
• 26:34
  SPEAKER_02: The 12th one joins us next month.
• 26:37
  SPEAKER_02: Um, of those 12, uh eight are chartered, possibly nine, no, eight.
• 26:45
  SPEAKER_02: Um we have seven solar accredited individuals, which is more than any independent firm in the country.
• 26:53
  SPEAKER_02: We have three trust and estate practitioners, we've got our first resolution accredited chartered financial planners.
• 27:02
  SPEAKER_02: We're at the point where about 80% of the work is referred by the legal profession, and we are um, I hope, recognized.
• 27:11
  SPEAKER_02: Well, we are recognized by the legal profession as being a firm.
• 27:15
  SPEAKER_02: Um and between us, we are a very good general practice firm.
• 27:22
  SPEAKER_02: But uh we are a firm that collaborate.
• 27:26
  SPEAKER_02: The reason I draw that distinction, what I do believe is that most financial advice firms really are loose collections of individuals.
• 27:37
  SPEAKER_02: Um it's partly mentality, it's partly driven by remuneration structure, but very often they're loose collections of individuals who've sort of come together under a compliance banner, but everyone is fighting their own corner when it comes to fees.
• 27:54
  SPEAKER_02: And very often people are very protective of a client relationship.
• 27:58
  SPEAKER_02: It's my client.
• 27:59
  SPEAKER_02: Well, we don't have anything like that, it's a client of the firm, and very often we'll have two or three of us working on that client from time to time.
• 28:09
  SPEAKER_02: Uh, I think it's very good to give clients two points of contact just in case one is hit by a bus.
• 28:15
  SPEAKER_02: You know, we're dealing with an awful lot of people who've had an awful lot of really horrible accidents.
• 28:20
  SPEAKER_02: That could happen to any of us.
• 28:21
  SPEAKER_02: So, um, and what we've created is a real culture where people are very happy to share their knowledge and experience.
• 28:29
  SPEAKER_02: I've had two conversations with two of the advisors today about two different quite interesting technical situations.
• 28:37
  SPEAKER_02: Um, they know they can ring me up if they think, you know, there are certain areas they would not talk to me about, and one of those is technical pensions advice.
• 28:45
  SPEAKER_02: You know, I am probably the least qualified advisor in the country to talk to you about a SAS.
• 28:51
  SPEAKER_02: Uh, I have no idea really what a SAS is.
• 28:54
  SPEAKER_02: Well, I know loosely what it is, but I've got no idea how it works.
• 28:58
  SPEAKER_02: Um, I've got four or five people in the firm who could bore you rigid for hours about the technical aspects of SAS.
• 29:07
  SPEAKER_02: You know, so we are a firm, we collaborate together.
• 29:12
  SPEAKER_02: And that I think is something that everybody who joins us finds both really very rewarding, but sadly very, very surprising.
• 29:23
  SPEAKER_02: They've never seen it before.
• 29:25
  SPEAKER_02: I don't think we're the only firm that does it.
• 29:28
  SPEAKER_02: There are others, and I do know of other examples.
• 29:31
  SPEAKER_02: But it's really bizarre how that's strange.
• 29:34
  SPEAKER_00: Dave, uh can I stop you there and just ask you some questions about that?
• 29:38
  SPEAKER_00: Yeah, sure.
• 29:39
  SPEAKER_00: So that's that that does sound very it does sound very unique.
• 29:42
  SPEAKER_00: And I can what you said there about uh firms often are a collection of individuals as opposed to like a team.
• 29:51
  SPEAKER_00: From a remuneration perspective, and I think people would be interested to hear this who run their own businesses.
• 29:58
  SPEAKER_00: How does that work?
• 29:59
  SPEAKER_00: Is everybody on like an equal salary?
• 30:01
  SPEAKER_00: Is there a bonus structure?
• 30:03
  SPEAKER_00: Do you pay bonuses?
• 30:04
  SPEAKER_00: How do you remunerate people and how are they how do they become part of the the the values and the growth of that business from a financial perspective and also from an intrinsically intrinsically um rewarding perspective when it comes to say income?
• 30:18
  SPEAKER_00: I'm quite interested in that side.
• 30:20
  SPEAKER_02: In in that side, and and it it that is evolving, is what I would honestly say, Sam.
• 30:25
  SPEAKER_02: Today, I can honestly tell you there is no bonus structure.
• 30:30
  SPEAKER_02: Okay.
• 30:31
  SPEAKER_02: That is going to change from next year, from the 1st of January.
• 30:36
  SPEAKER_02: Right.
• 30:36
  SPEAKER_02: And I'll explain why it's going to change.
• 30:38
  SPEAKER_02: Um, but historically, I've always been averse to bonus structures because I think they can produce undesirable results as well, i.e., most bonus structures are based on how much have you generated in terms of income for the firm.
• 30:57
  SPEAKER_02: That I think is is is fundamentally wrong.
• 31:00
  SPEAKER_02: Um but what we what what we do is we pay people, we believe, competitively and reasonably, and it's all done on base salary.
• 31:10
  SPEAKER_02: And Stuart and I took the view we want to build a firm.
• 31:15
  SPEAKER_02: You know, I can honestly tell you I am not the highest paid person in my firm.
• 31:20
  SPEAKER_02: I'm not.
• 31:21
  SPEAKER_02: Um yes, I benefit from a slightly advantageous track treatment in the in the money I extract from the firm.
• 31:30
  SPEAKER_02: But um, I think my starting point is uh it's a bit bizarre for a financial advisor to say this, but I am not motivated by money.
• 31:37
  SPEAKER_02: I am honestly not motivated by money.
• 31:40
  SPEAKER_02: Um what we make sure of is that everybody has a good standard of living, and um obviously we're paying competitively because if we weren't, we wouldn't have any employees.
• 31:53
  SPEAKER_02: But one of the other things we wanted to do was really open up the equity ownership of this firm.
• 32:00
  SPEAKER_02: Um and Stuart and I now both own about 29% each, I think it is.
• 32:08
  SPEAKER_02: We've taken ourselves down to that level without extracting a penny from the firm.
• 32:13
  SPEAKER_02: And the way we've done it is that we offered equity to two of our early joiners who we felt were quite important.
• 32:21
  SPEAKER_02: One is a very well-qualified advisor who's now running our operation down in Devon, the other is not an authorised advisor, his background is operations, IT, and that kind of thing.
• 32:34
  SPEAKER_02: So we felt quite simply that these are two people that we really do, we we think they're important to the development of the firm at that stage.
• 32:44
  SPEAKER_02: So we brought them into equity and we did it.
• 32:47
  SPEAKER_02: We had to do it in such a way that we didn't give them a major tax problem.
• 32:51
  SPEAKER_02: They bought in, but they bought in at a reasonable price.
• 32:54
  SPEAKER_02: And I think what we can show is that we probably hopefully multiplied their initial investment by about five times in the course of probably three years, something like that.
• 33:07
  SPEAKER_02: Um, we are talking to three other employees about it.
• 33:12
  SPEAKER_02: What I'm really not interested too much in is people who just want to earn a lot of money.
• 33:18
  SPEAKER_02: Um, I want them to be on board with this philosophy of building a firm and realizing that actually there is a choice between sort of financial jam today and financial jam tomorrow.
• 33:31
  SPEAKER_02: We know our firm is attractive, we've had a quite a lot of offers in a loose sense.
• 33:37
  SPEAKER_02: You know, they these things have never gone to formal office because we've never been interested.
• 33:41
  SPEAKER_02: But we know that there are lots of people out there who would like to acquire us.
• 33:46
  SPEAKER_02: That's not going to happen while I'm around.
• 33:48
  SPEAKER_02: And what I'm hoping is that I'm instilling in people the idea that um they can be a decision maker in this firm, they can earn a reasonable living, they can build a capital value.
• 34:00
  SPEAKER_02: Um and that's what we're doing.
• 34:03
  SPEAKER_02: Uh, you know, accountants and solicitors have been enabling partners to come and go for hundreds of years.
• 34:11
  SPEAKER_02: What I want to do is create a financial planning firm that will do exactly the same.
• 34:16
  SPEAKER_02: And when I do retire, my shares are going to be sold back to the firm.
• 34:19
  SPEAKER_02: There's absolutely no shadow of a doubt about it.
• 34:22
  SPEAKER_02: Um, but yes, bonus structure, we are introducing one because um let's say we're we're it we're in a transition phase here.
• 34:32
  SPEAKER_02: Um we've grown quite rapidly.
• 34:35
  SPEAKER_02: 12 advisors have come together over the course of the last six years.
• 34:39
  SPEAKER_02: They come from various different backgrounds.
• 34:43
  SPEAKER_02: Um, some have been independent financial advisors, some have been what I would really call proper financial planners, some have come from the big vertically integrated distribution channels.
• 34:56
  SPEAKER_02: Anyway, we've come together from a variety of backgrounds.
• 35:00
  SPEAKER_02: Um the really good thing about this is we've come together philosophically, but operationally, we've got clients who were paying fees in different ways, all this kind of stuff.
• 35:12
  SPEAKER_02: What we have agreed, and what we agreed some time ago, is that all new fees are going to be charged on a very explicit fixed fee basis.
• 35:21
  SPEAKER_02: Um, the fees are calculated by reference to the time required to do the job.
• 35:28
  SPEAKER_02: Fundamentally, underneath it all, I am uh uh very much of the view that service should be tailored to the clients and fees should be tailored to service.
• 35:39
  SPEAKER_02: So every client is treated as an individual.
• 35:42
  SPEAKER_02: There is no way I'm gonna get involved in this gold, silver, and bronze stuff.
• 35:47
  SPEAKER_02: I'm not gonna fit a client into a service, we are gonna fit the service to the client.
• 35:53
  SPEAKER_02: So um, over the course of the last couple of years, we've probably shot ourselves in the foot financially as people have struggled with the concept of calculating fees properly.
• 36:04
  SPEAKER_02: Um, and you know, that there's no sort of um uh ill intent here at all.
• 36:11
  SPEAKER_02: But the the consumer duty regime doesn't hold any great fear for me at all.
• 36:15
  SPEAKER_02: But what it does do is it means we've got to bring this together and homogenize it and standardize it.
• 36:21
  SPEAKER_02: So um what we've basically said is that everybody now um all of the back office staff are absolutely on fixed salaries, and and what I'm hoping is that we have a pot we can distribute amongst them um at the end of the year if the profits are there.
• 36:40
  SPEAKER_02: Um, but with the advisors, I have now given them a set of 10 different objectives that we are looking for them to achieve over the course of the next year.
• 36:51
  SPEAKER_02: These are not well one of them is is produce uh a new fee income um and to hit expectation on that.
• 37:02
  SPEAKER_02: Um but we've got nine other different objectives now, those are aligned to the future of the business.
• 37:10
  SPEAKER_02: And the reason why I'm bringing in a bonus is partly because um we, I think, need to really focus their mind on achieving these nine or ten different objectives.
• 37:24
  SPEAKER_02: So we've got in there, for example, one of them is time recording.
• 37:28
  SPEAKER_02: Um I want and and fee quoting.
• 37:30
  SPEAKER_02: I want to see the mechanics of that being done properly.
• 37:34
  SPEAKER_00: What time associated to fees associated to the time?
• 37:37
  SPEAKER_02: To the time involved.
• 37:38
  SPEAKER_02: Yeah.
• 37:39
  SPEAKER_02: Um and you know, that's one of the objectives.
• 37:43
  SPEAKER_02: Um I've got various other, they've got to have a completely clean sort of um complaint history for the year.
• 37:51
  SPEAKER_02: They've got to have a completely clean uh file check from our external compliance consultant, all this kind of stuff.
• 37:58
  SPEAKER_02: Um uh they've got to have positive feedback from clients on the samples that we take.
• 38:04
  SPEAKER_02: Um, you know, so that there's a range of different things, but what I'm trying to do here is focus the advisor's mind because I've got a very clear strategy in my head, and I think Stuart and our other two executive directors have got a very clear idea.
• 38:21
  SPEAKER_02: I think I need to encourage the wider advisor population to also get those 10 different objectives in their head.
• 38:32
  SPEAKER_02: So, yeah, we're you know, we're operating a bonus system.
• 38:35
  SPEAKER_02: I'm slightly in two minds about it.
• 38:37
  SPEAKER_02: I've never been um a massive fan.
• 38:40
  SPEAKER_02: Um, I've never had one myself.
• 38:43
  SPEAKER_00: Um it's the bonus that's not associated to the level of business you write, the bonus is associated to the quality of the service you provide and the quality of of delivery, yeah.
• 38:52
  SPEAKER_02: Yeah, and and more importantly, it's it's aligned to these 10 different criteria that I really want the advisors to focus on.
• 39:02
  SPEAKER_02: Right, values.
• 39:03
  SPEAKER_02: Because exactly because that is intrinsically important to the future of the firm.
• 39:08
  SPEAKER_02: Now like that, that's cool.
• 39:09
  SPEAKER_02: You know, uh and I can, you know, um I can tell you that at the moment we are working at 56% efficiency.
• 39:17
  SPEAKER_02: I know that because I'm a very anal accountant, but broadly speaking, what that means in a very simple way is we are recovering 56% of our chargeable time potential.
• 39:30
  SPEAKER_02: Right.
• 39:31
  SPEAKER_02: My aim is to recover much closer to 100%.
• 39:35
  SPEAKER_02: My my target is 85%.
• 39:38
  SPEAKER_00: Is that because is that sorry, is that because you are too cheap?
• 39:44
  SPEAKER_02: No, it's not because it's well, partly, Sam, it it possibly is.
• 39:48
  SPEAKER_02: You know, one of the really interesting things has been how financial advisors have transitioned, particularly those that have come in from outside, um, have transitioned to our way of thinking on time recording and fee quoting.
• 40:05
  SPEAKER_02: Now this has been something that I've deliberately let evolve because I don't I I want advisors to find their own way with it.
• 40:15
  SPEAKER_02: I know it's going to shoot us in the foot financially.
• 40:17
  SPEAKER_02: I am expecting and profit has gone down before I expect it to go up again.
• 40:24
  SPEAKER_02: But um I think where we are now, um uh the advisors are undercooking the fees because what I've asked them to do is calculate with a new fee, for example, how much of whose time is going to be involved in bringing that client to implementation stage.
• 40:49
  SPEAKER_02: I'm not surprised, everybody thinks it takes less time than it actually does.
• 40:56
  SPEAKER_02: Um, and that process has now evolved.
• 41:01
  SPEAKER_02: We develop the fee calculating sort of um capability as we've gone.
• 41:08
  SPEAKER_02: Um, I'm expecting that average new fee to go up next year.
• 41:14
  SPEAKER_02: Um because I expect people are now becoming more confident and because they're better informed as to the time it takes to actually achieve certain things.
• 41:24
  SPEAKER_02: So um, but in terms of value for clients, absolutely, uh I am 100% sure this provides real value for money in terms of what the FCA is expecting from consumer duty.
• 41:37
  SPEAKER_02: We are providing too much value at the moment because people are not properly calculating how much time it takes, but that will evolve.
• 41:47
  SPEAKER_02: Um in terms of on-game fees, we we are we are there, we've got a much better understanding of what's involved and who's having to spend the time on a on an annual review.
• 42:01
  SPEAKER_02: You know, we're coming at this from various different angles as well, because one of the uh big reasons why we're sort of inefficient is that because we've got 12 advisors who've come together, we've had a myriad of platforms, for example.
• 42:16
  SPEAKER_02: Well, we're building our own now, um, and we are implementing our own on hopefully the 1st of January.
• 42:23
  SPEAKER_02: It's all in this sort of final stage of development phase, but let's say the deadline is expected to be the first of January.
• 42:32
  SPEAKER_02: That will both make us efficient um because we're coming onto a single platform.
• 42:37
  SPEAKER_02: What it will also do is it will add, probably in the fullness of time, about quarter of a million pounds to our bottom line.
• 42:46
  SPEAKER_02: But crucially, what it will also do is drop the charges that clients are paying.
• 42:51
  SPEAKER_02: Now, you know, we can add a quarter of a million pounds to our bottom line whilst also dropping clients' charges, what not to like?
• 43:00
  SPEAKER_00: Um yeah, you feel it you are driven by value, aren't you?
• 43:07
  SPEAKER_00: It's a value, you know, it's a client value.
• 43:10
  SPEAKER_00: Now, this does this stem from the vulnerable client that you first you know, you've got your you've got your your there's an element of your business which is like a pattern project that you're aligned to, which is doing good for people who are in vulnerable situations, whether or they're clinically negligent, personal injury, or long-term health problems, whatever that vulnerable client actually is.
• 43:32
  SPEAKER_00: So there is that element of your business which focuses on that, and there's a cost associated to helping those people.
• 43:39
  SPEAKER_00: Why would you charge them too much when they're at a vulnerable position in their life anyway?
• 43:44
  SPEAKER_00: Are you then keep so the charging for those types of clients would tend to be kept in quite low?
• 43:52
  SPEAKER_00: Do you then match the charging for those types of clients to say some, you know, your your per your typical client who's not, perhaps?
• 44:00
  SPEAKER_00: Vulnerable, they still get the level of service that a vulnerable person does, which I think that's admirable.
• 44:05
  SPEAKER_00: You know, you treat every client exactly the same.
• 44:07
  SPEAKER_00: But do you do you make it more affordable for the vulnerable client?
• 44:11
  SPEAKER_00: No.
• 44:12
  SPEAKER_00: It's exactly the same cost.
• 44:13
  SPEAKER_02: No, no.
• 44:14
  SPEAKER_02: What we're aiming to do is treat every client exactly the same from a fee perspective.
• 44:19
  SPEAKER_02: But what we're aiming to do is make sure that every client pays for the amount of time involved in dealing with their matter.
• 44:26
  SPEAKER_00: Just time-based, yeah.
• 44:28
  SPEAKER_02: What but one thing I would say is that that turns out to be absolutely excellent value for money for some of the large, particularly the large value personal injury claims that we deal with.
• 44:43
  SPEAKER_01: Yeah.
• 44:43
  SPEAKER_02: Because if you went somewhere else to deal with a£5 million personal injury claim, and maybe they are charging a 1% implementation fee or whatever it may be, we will be massively under that, massively under that.
• 45:01
  SPEAKER_02: Because what we're doing is we're saying how much of whose time does it take to put that thing together, and that's what we're going to charge for.
• 45:10
  SPEAKER_02: My point, Sam, is that I know if we recovered every chargeable hour that we could in our firm, broadly, we would double our turnover.
• 45:21
  SPEAKER_01: Right, okay.
• 45:22
  SPEAKER_02: Okay, because we are working at 56% recovery.
• 45:27
  SPEAKER_02: All I want to do is charge every client for the hours involved in doing the job for them.
• 45:35
  SPEAKER_02: They will get a very fair fee from that.
• 45:39
  SPEAKER_02: Particularly, they will get a remarkably low fee compared to some if they're talking about investing large sums of money.
• 45:48
  SPEAKER_02: But as a firm, we are just getting paid for the number of chargeable hours that we have in a year.
• 45:55
  SPEAKER_00: How do you, when it comes to actually positioning that with the clients themselves, do you do you come up against barriers to that?
• 46:00
  SPEAKER_02: Yeah, it's interesting.
• 46:01
  SPEAKER_02: You see, I I I don't particularly, but then I was doing that 40 years ago as an accountant.
• 46:10
  SPEAKER_02: You know, um, I I had a very brief spell, as I said, for about 18 months as a commission-based financial advisor.
• 46:21
  SPEAKER_02: Um and what I found was I was proactively telling clients how much commission I was gonna get paid.
• 46:28
  SPEAKER_02: I was actually going out of my way to explain to clients, I'm going to get paid for doing this.
• 46:34
  SPEAKER_02: It's just you're not gonna pay me.
• 46:36
  SPEAKER_02: I'm gonna get paid a commission.
• 46:37
  SPEAKER_02: Now, what what I found is clients were hugely surprised.
• 46:41
  SPEAKER_02: I was the first financial advisor they ever met who told them that they were actually paying for this.
• 46:47
  SPEAKER_02: Um, you know, that's the fundamental difference, if you like.
• 46:53
  SPEAKER_02: I have never had a problem saying to a client, I'm a professional person providing a professional service and technical advice, I am going to charge you a fee for that.
• 47:04
  SPEAKER_02: This is what my fee is going to be.
• 47:06
  SPEAKER_02: Um, yeah, I certainly would say that some clients have said, oh, that's a bit high, or whatever it may be.
• 47:13
  SPEAKER_02: Um, but certainly I've always been instructed by the vast majority of people I've met.
• 47:20
  SPEAKER_02: You know, this is it's a confidence thing, it's a comfort thing.
• 47:24
  SPEAKER_02: Uh certainly we have had advisors in the firm who haven't found it as easy as that because it's a fundamental change from where they've been.
• 47:35
  SPEAKER_02: But what was really interesting, one of the really interesting things that came out of the advisor meeting that we did recently is one of one of the advisors who comes from a large vertically integrated distribution channel, recent joiner, but it's very surprised about how we calculate those fees, and it's kind of is that all the fee is?
• 47:58
  SPEAKER_02: Well, and and certainly a number of advisors have said that.
• 48:01
  SPEAKER_02: Well, I've gone through the fee calculation, it said the fee should be this.
• 48:05
  SPEAKER_02: That seems a bit low.
• 48:07
  SPEAKER_02: And I said, Well, just go back and check your figures.
• 48:09
  SPEAKER_02: Have you got your your time right?
• 48:11
  SPEAKER_02: Because if if your time's right, that's what the fee is.
• 48:14
  SPEAKER_02: I'm not going to overcharge the client.
• 48:16
  SPEAKER_02: Um, I just want them to pay for the time it takes.
• 48:20
  SPEAKER_02: So, and then what I say to the advisors is, well, you you've just told me you think that fee's low.
• 48:27
  SPEAKER_02: So, so why should your client think otherwise?
• 48:30
  SPEAKER_02: You know, um, it's a confidence thing, it's a mindset thing.
• 48:36
  SPEAKER_02: But as I say, the big advantage I got was I trained for nine years as an accountant.
• 48:42
  SPEAKER_02: I didn't have any other way of earning fees other than to say, this is what I'm going to do for you, and this is what it's going to cost.
• 48:52
  SPEAKER_00: Interesting, Dave, right?
• 48:53
  SPEAKER_00: Because there's similarities there to the recruitment profession.
• 48:56
  SPEAKER_00: The recruitment profession is a profession, say profession, recruitment industry, right?
• 49:01
  SPEAKER_00: You you charge a contingent you charge based either on a contingency fee or like on a retainer.
• 49:07
  SPEAKER_00: If I was to actually someone if I turn around to someone and say, right, for me to make a placement into your firm will charge you£7,000 plus BAT for a financial advisor.
• 49:15
  SPEAKER_00: We don't tell you how long it takes to do the job.
• 49:17
  SPEAKER_00: It's just we do it that way because we average it out over the over the year of all of our clients and all the time that we spend on things that we don't get paid, right?
• 49:25
  SPEAKER_00: So it might be that I find someone straight away, put it across to you, and it's taking me 10 minutes that you hire that person, and I'm charging£7,000, right?
• 49:32
  SPEAKER_00: And and that feeling like we don't as a we don't as an industry ask for like for hourly, you know, to say, look, this is how much it's going to cost you for the recruit.
• 49:43
  SPEAKER_00: I'm going to break it down.
• 49:44
  SPEAKER_00: So this part's going to cost this much, this part's going to cost this much.
• 49:47
  SPEAKER_00: Because nobody seems to what the perception is that nobody wants to pay that way.
• 49:52
  SPEAKER_00: But actually, when you start asking for business that way and explaining the work that goes into it, people are actually quite responsive to being paid, like for paying for like retaining business and structuring it and breaking it down.
• 50:04
  SPEAKER_00: Where if at one point it doesn't actually end up going anywhere, then they've only paid part of a fee, but they're happy knowing that the energy and efforts have been put in to actually do it.
• 50:13
  SPEAKER_00: And you've got lots of these people that are training recruiters to say, look, you know, lots of other places ask for money up front.
• 50:19
  SPEAKER_00: Why don't you?
• 50:20
  SPEAKER_00: And it's a it is a mindset thing, isn't it, when you sit down with somebody and ask it absolutely is.
• 50:25
  SPEAKER_02: And you know, the critical point, Sam, is people will only pay a fee, quite right.
• 50:30
  SPEAKER_02: It's like me.
• 50:30
  SPEAKER_02: You know, if I go out and buy a washing machine, do I think that washing machine is worth the price that's being asked for it?
• 50:38
  SPEAKER_02: And if I go and walk into a washing machine shop, I will see 20 different models with 20 different prices attached to it.
• 50:47
  SPEAKER_02: What I'm going to settle on is the one that provides what I want at a price I think is reasonable value.
• 50:54
  SPEAKER_02: Um, very similar, really.
• 50:57
  SPEAKER_02: And and you know, it's interesting, it's it's my mindset because, as I say, I was taught that in an in an accountancy profession.
• 51:06
  SPEAKER_02: There are a number of other financial planners out there who get it.
• 51:10
  SPEAKER_02: There are a number of other financial planners I know whose first career was law or accountancy, they obviously get it.
• 51:18
  SPEAKER_02: Um, but someone who's come from a product distribution um channel will obviously it's an alien concept.
• 51:28
  SPEAKER_02: Well, uh the FCA has picked up on it.
• 51:31
  SPEAKER_02: The FCA is saying we've got to provide value for money.
• 51:34
  SPEAKER_02: Well, what better way to do it than actually charge people for the time and effort?
• 51:39
  SPEAKER_02: And and what you do is I put something up on LinkedIn about it the other day.
• 51:43
  SPEAKER_02: You know, you start from the other way around.
• 51:47
  SPEAKER_02: Well, you know, I know what resource I've got in my firm, I know what the costs involved in running my firm are.
• 51:55
  SPEAKER_02: Okay, there's a a couple of bits I can't control.
• 51:58
  SPEAKER_02: For example, the FCA levy and the cost of PI insurance are the two standouts on that.
• 52:03
  SPEAKER_02: I'm in the lap of the gods almost.
• 52:06
  SPEAKER_02: But broadly, I know what it costs to run the firm.
• 52:09
  SPEAKER_02: Um and uh I know what I think a reasonable profit level is, and what I'm targeting is an operating profit of 30%, because what I believe is that should strike an appropriate balance between the three stakeholders.
• 52:26
  SPEAKER_02: And the three stakeholders are the people who own the firm and the clients who pay the fees and the team that works within the firm.
• 52:35
  SPEAKER_02: Those are the three stakeholders to me.
• 52:37
  SPEAKER_02: And what I want to do is strike an equal balance because I think if any of if if any one stakeholder is lording it over the others, there's going to be a problem.
• 52:48
  SPEAKER_02: And it doesn't matter which one.
• 52:50
  SPEAKER_02: But you know, we've got to keep that balance.
• 52:52
  SPEAKER_02: So 30% to me is reasonable.
• 52:54
  SPEAKER_02: Now I know how many chargeable hours I've got in our in our team.
• 53:00
  SPEAKER_02: You know, I know how many weeks a year they work, I know how many hours a week broadly we can charge for.
• 53:07
  SPEAKER_02: We've got things like CPD to take into account, marketing, you know, the non-chargeable stuff.
• 53:13
  SPEAKER_02: Um, but broadly, if I charge sensible hourly rates, then uh and I charge a chartered financial planner out, including myself, at 250 quid an hour.
• 53:26
  SPEAKER_02: Uh, that's reasonable.
• 53:27
  SPEAKER_02: That's in aligned broadly to a an accountant or a solicitor in this part of the world with a reasonable level of experience and you know, all that sort of stuff.
• 53:37
  SPEAKER_02: We charge a qualified member of support team out at 150, and we charge admin out at 75.
• 53:43
  SPEAKER_02: I put all those figures into a melting pot, and I can tell you we're recovering 56% of our chargeable time at the moment.
• 53:51
  SPEAKER_02: And the strategy and the reason for those 10 bonus criteria are that should bring us more towards the 85% recovery rate, one way or another.
• 54:03
  SPEAKER_02: Once I get there, we'll have a much more profitable firm, and all of the clients will be paying a fair and reasonable fee.
• 54:12
  SPEAKER_02: And I'm very upfront about this.
• 54:13
  SPEAKER_02: There are some clients at the moment who probably are paying more than they should be.
• 54:18
  SPEAKER_02: There are also other clients in there who probably aren't paying for the resource that they require.
• 54:24
  SPEAKER_00: Dave, when it when it comes to you exiting the profession, um, did you say you're a 29% shareholder at the moment?
• 54:31
  SPEAKER_00: Yeah, roughly somewhere about there.
• 54:33
  SPEAKER_00: Yeah.
• 54:33
  SPEAKER_00: So look so you're a 29% shareholder.
• 54:37
  SPEAKER_00: And let's say you you leave, right?
• 54:39
  SPEAKER_00: And you've got this ambition for that firm to be around forever, right?
• 54:43
  SPEAKER_00: How do you guarantee that?
• 54:45
  SPEAKER_00: Because it's your baby, isn't it, essentially?
• 54:47
  SPEAKER_00: You've helped build that.
• 54:48
  SPEAKER_00: How do you know that when you sell your shares into the business, do you retain anything, any control whatsoever?
• 54:53
  SPEAKER_02: Well, no, I what what I've said to everybody is my you know, and and the reason why it's 29%, Sam, is I've not only got two other colleague shareholders, we have two firms of solicitors that own equity in the firm.
• 55:10
  SPEAKER_02: And these were ones that started as you know, just referral relationships.
• 55:15
  SPEAKER_02: The the biggest one we've got was a referral relationship sort of 10 years ago, and I initiated that 10 years ago.
• 55:23
  SPEAKER_02: We actually then moved through there into a joint venture, etc., etc.
• 55:28
  SPEAKER_02: We took out the joint venture about two years ago, partly because we were paying a shed load of irrecoverable VAT and we exchanged it for a shareholding in the main firm.
• 55:37
  SPEAKER_02: So, you know, we've got quite a range of shareholders.
• 55:43
  SPEAKER_02: I obviously have no say in this once I cease to be a shareholder.
• 55:49
  SPEAKER_02: But what I hope I'm doing here is I'm instilling in other people the ethos of creating and sustaining the firm.
• 55:59
  SPEAKER_02: And with the two colleague shareholders that we brought in, I believe that we have increased their investment by three to five times.
• 56:08
  SPEAKER_02: What I am saying to them is what I would like you to do now is realize that.
• 56:14
  SPEAKER_02: And what I would also like you to do is give other people the opportunity, you know.
• 56:20
  SPEAKER_02: And yes, I want to get a capital sum out of this firm, but the reason why I want to get a capital sum out of this firm is so that I can broadly create a very good support regime for my eldest child.
• 56:36
  SPEAKER_02: You know, I uh I'm a decent quality financial advisor, Sam.
• 56:40
  SPEAKER_02: You know, if I was reliant on the lump sum I get from this firm for my retirement, it would maybe a different matter.
• 56:48
  SPEAKER_02: But I I I don't believe that people should put themselves in a position where they're entirely reliant on selling a business to fund their retirement, you know, and I've very clearly not done that.
• 56:59
  SPEAKER_02: Um, so I am not after top dollar, I really am not, and that's partly um, you know, because I just want to make sure this firm is sustainable.
• 57:10
  SPEAKER_02: Of course, when I exit, it's down to the others what happens.
• 57:15
  SPEAKER_02: And what I'm hoping is that they will realise that they will do okay out of this financially if they stay in there as a shareholder for a number of years, if they carry on building and growing the firm and maintaining its profitability.
• 57:30
  SPEAKER_02: At some point they will want to exit, and their way to exit is by making sure that they've got succession there within the firm.
• 57:37
  SPEAKER_00: Is this the improv is this an employee employee ownership model then?
• 57:42
  SPEAKER_02: Well, uh ultimately it might be.
• 57:44
  SPEAKER_02: I can't do an employee share ownership trust um because uh the legislation says you've got to be a 51% shareholder to do it.
• 57:54
  SPEAKER_02: Uh I can't because I've only now got 29%.
• 57:58
  SPEAKER_02: Um but I've got a mechanism which we've discussed with our accountants and our lawyers, and we're all quite happy it works.
• 58:09
  SPEAKER_02: And um, one of the crucial things I've got to do is is is separate out, I've got to um make sure that the shares which are issued to the new shareholders are not my shares.
• 58:21
  SPEAKER_02: I'm gonna sell my shares back so that the company can issue new shares to people coming through uh in future, because those two things might need to be done at different prices uh exactly.
• 58:35
  SPEAKER_00: So actually you are also running, you're now sort of at the point where you know you are trusting those around you that you've that you've employed to continue on the business with the values that you've set out and instilled within them, but really you've employed based on those values.
• 58:53
  SPEAKER_00: Why would those people's people hang around in a firm knowing that that was your vision and goal um to just do you over, for example?
• 59:02
  SPEAKER_00: It's like it's not it's not gonna happen, is it really?
• 59:04
  SPEAKER_02: Because it shouldn't do, it shouldn't do, because you know what what I what I honestly believe and what what what the guys all tell me is they like this environment.
• 59:15
  SPEAKER_02: Yeah, it sounds good.
• 59:16
  SPEAKER_02: It's a bit of a surprise to them, but you know, the the way we do things.
• 59:21
  SPEAKER_02: Um but you know what what I uh we are talking to three people at the moment, probably four actually, about them coming into the ownership.
• 59:33
  SPEAKER_02: It's not something I'm just hanging out there and saying, you know, here's some sort of vague promise.
• 59:40
  SPEAKER_02: Um we can show we've done it.
• 59:42
  SPEAKER_02: Um and you know, I think people realise that um it's not all about financial reward.
• 59:52
  SPEAKER_02: This, you know, that there's a lot to be had from job satisfaction from dealing with a lot of the clients we're dealing with.
• 1:00:00
  SPEAKER_02: You know, it's it's actually a really quite a pleasant uh environment.
• 1:00:04
  SPEAKER_02: And the way I like to sort of describe it, Sam, is it's sort of like a corporate collective.
• 1:00:09
  SPEAKER_01: Yeah.
• 1:00:09
  SPEAKER_02: Yes, it's a yes, it's a company, but there is no great hierarchy in our business.
• 1:00:15
  SPEAKER_02: Um uh it's really quite a pleasant working environment, but underneath it all, it's a firm, and people collaborate, you know, and we've got three trainees coming through at the moment, and they are being mentored, if you like, by what I think is one of the best qualified, uh certainly one of the best qualified, but also one of the most experienced and one of the most collaborative teams in the Southwest.
• 1:00:42
  SPEAKER_00: You've also got about 380 million under management, haven't you?
• 1:00:45
  SPEAKER_02: It's a bit more than that now, it's probably something over 400, we think.
• 1:00:49
  SPEAKER_02: Um, but you see, my other one of my other key things is I'm a massive believer in the segregation of financial advice and investment management.
• 1:01:00
  SPEAKER_00: Right.
• 1:01:01
  SPEAKER_02: You know, and I come at the background, I've got a bit of an investment manager audit background, you know.
• 1:01:07
  SPEAKER_02: I've got a professional accountancy audit background.
• 1:01:10
  SPEAKER_02: Um I've got an IMC, my degree was part economics.
• 1:01:16
  SPEAKER_02: What that basically teaches me that I know what I know, but I also have got a vague idea of what I don't know, and what I don't know is much larger than what I do know.
• 1:01:26
  SPEAKER_02: Investment management to me is a specialist discipline.
• 1:01:29
  SPEAKER_02: I've never been a believer in picking funds.
• 1:01:32
  SPEAKER_02: Um but what we're able to do is use 400 and odd million pounds worth of purchasing power to get some extremely good deals from some of the biggest and best known investment managers in the country.
• 1:01:46
  SPEAKER_02: And I see that as part of my role.
• 1:01:50
  SPEAKER_02: Um but the reason why I think segregation uh is critically important, this comes back to my point that I think distribution should be separate from manufacture, because I can hold an investment manager to account against whatever criteria I set.
• 1:02:10
  SPEAKER_02: But if that investment manager fails to deliver, and it's by no means it's not going to be a knee-jerk reaction, this, but if that investment manager fails to deliver over what I think is a reasonable period of time, I can lift that money and I can take it to another investment manager.
• 1:02:29
  SPEAKER_02: And that to me is critically important in protecting clients' best interests.
• 1:02:34
  SPEAKER_02: And again, I'm not just saying it, we've done it.
• 1:02:37
  SPEAKER_02: We moved about, I think it was 150 million from one investment manager to another, probably oh five years ago.
• 1:02:47
  SPEAKER_02: Um it took us about 18 months to complete the process, but in the process, we negotiated a new charging structure with the investment manager we were going to, you know, and we dropped clients' charges in the process.
• 1:03:04
  SPEAKER_02: We didn't make any more money, I didn't load up the client's fees for the work involved in the transition because I felt that was our responsibility.
• 1:03:14
  SPEAKER_02: We'd put it with an investment manager that had loosely gone off the boil.
• 1:03:19
  SPEAKER_02: But my role was to go and find an alternative.
• 1:03:24
  SPEAKER_02: And we talk to probably half a dozen at any point in time.
• 1:03:28
  SPEAKER_02: We've just been through this.
• 1:03:29
  SPEAKER_02: Our investment committee has just reviewed our proposition.
• 1:03:34
  SPEAKER_02: We're very happy with what we've got.
• 1:03:36
  SPEAKER_02: We probably, I suppose, focus on three investment managers.
• 1:03:43
  SPEAKER_02: We are much more believers in model portfolio and passive investment than we are in full-blown bespoke discretionary, but we have to cover the full spectrum because of the client base that we've got.
• 1:03:54
  SPEAKER_02: So um, you know, it's another part of the satisfaction is the fact that we can deal with some of these very large investment managers on very good terms.
• 1:04:07
  SPEAKER_02: And again, it's quite surprising to some of the people who join us what terms we can get.
• 1:04:12
  SPEAKER_02: Obviously, I can't disclose them because they're all commercially sensitive.
• 1:04:15
  SPEAKER_00: But I had um I had a chap on who came on through, sorry to kind of butt across you then, but that sounded, you know, that was that was really interesting.
• 1:04:22
  SPEAKER_00: It's a good explanation, actually.
• 1:04:23
  SPEAKER_00: Probably one of the better ones I've heard, actually, um, as to why you don't have it centralized.
• 1:04:30
  SPEAKER_00: I like it.
• 1:04:30
  SPEAKER_00: There's a guy who came on my podcast um from a company called The Path.
• 1:04:33
  SPEAKER_00: Have you heard that heard of The Path?
• 1:04:35
  SPEAKER_00: No.
• 1:04:36
  SPEAKER_00: So they're like they're an ethical, um, ethical green pensions, ethical investments, all that kind of stuff.
• 1:04:43
  SPEAKER_00: And that's pretty much their focus.
• 1:04:45
  SPEAKER_00: So they're experts in ethical ESG and impact strategies.
• 1:04:50
  SPEAKER_00: Is that something that you guys do where you are?
• 1:04:53
  SPEAKER_00: Because you do like to niche into things.
• 1:04:54
  SPEAKER_00: I mean, the care stuff is very niche.
• 1:04:56
  SPEAKER_00: Have you niche have you started looking to to to more sort of positive impact ESG, green pensions, investments, that type of thing?
• 1:05:03
  SPEAKER_02: Um, well, I'm I'm not part of our investment committee.
• 1:05:08
  SPEAKER_02: Um but yes, it's certainly something that's increasingly important.
• 1:05:14
  SPEAKER_02: And again, you know, talking as someone who I like to think is ethically sound in various different ways, it's a good thing.
• 1:05:22
  SPEAKER_02: We we can proactively influence investment management.
• 1:05:26
  SPEAKER_02: Um so yes, it's very definitely something we're looking at.
• 1:05:30
  SPEAKER_02: I suppose one of the one of the issues is that sort of legislation hasn't quite caught up with ESG investment yet, but and it's a developing thing for professional fiduciaries and for layer fiduciaries.
• 1:05:42
  SPEAKER_02: But the starting point when you're investing with fiduciary or foreign fiduciaries, uh, you know, trustees, attorneys, and deputy, Sam is what I'm talking about.
• 1:05:51
  SPEAKER_02: They can't allow their personal views to drive investment.
• 1:05:57
  SPEAKER_02: Um that I think is changed.
• 1:06:00
  SPEAKER_02: um uh and i think i think the the legislation will evolve on that because it's a bit of a nonsense frankly if if a lot of the world is going very much towards ESG but fiduciaries are not um so that will change but yes no it's very definitely something that we look at and what I would say is that um you know we there is a variation in that in that investment proposition because we don't we uh to some extent we put the ESG investments down a different route to I think um if you look at the path right after this call check out the path have a look at what they're doing and um they're very they're very niche um and they're pretty much pretty unique and I've had a look at them behind the scenes and everything because I was doing a bit of work with them and I've had them on the podcast as well.
• 1:06:49
  SPEAKER_00: I mean it's really really super interesting stuff and I think it's just one of those that you your your company lends itself like your ethos and your values it lends itself to having that specialism within your business.
• 1:07:04
  SPEAKER_00: And I think from a growth perspective and attracting individuals with the values that you actually have which I think is like um about positive impact in people's lives so social responsibility is a big deal for you and I respect that kindness goes through you I can tell that you know there's a it's coming from a place of kindness and love and and and all of that.
• 1:07:26
  SPEAKER_00: And I think if you look at the path I think you'll just see some things on there that I think would fit beautifully into your business.
• 1:07:33
  SPEAKER_00: And when it came to attracting new advisors to your business as well I think and clients grandchildren of the clients that you're dealing with are very focused on it.
• 1:07:42
  SPEAKER_00: I mean the grandparents are now very focused on it because they're thinking about their future of their grandchildren.
• 1:07:47
  SPEAKER_02: And that and that yeah absolutely sam you you know and and this I suppose one of the interesting things there you use the word niche now I'm a huge believer in that and and what I do say to people entering the profession is niche.
• 1:08:03
  SPEAKER_02: You know there are too many financial advisors out there who are purporting to be all things to all people um and I don't think in any walk of professional life you can be a general practitioner at a high enough level these days we live in a very complicated world.
• 1:08:25
  SPEAKER_02: The analogy I draw if you if if you want to get a divorce you will walk into a firm of solicitors and talk to family lawyers.
• 1:08:34
  SPEAKER_02: If you want to write a will you will talk to the private client lawyers if you want to sell a property you will go and talk to the property department commercial department whatever it may be different people niche in different areas lawyers training involves them going through various different seats and then basically they and the firm will pick a seat that they specialise in accountants are the same you know I said I was a general practitioner and yes I I I was to a large extent but these days you know that you you you tend to specialise as well even in certain sectors or whatever it may be but in our I specialise literally in what I would call various types of vulnerable clients so you know the elderly the injured um people with special needs anyone under the auspices of court protection a lot of professional fiduciaries trustees deputies attorneys and the like you know so that's what I stick to my knitting on that other people will be giving technical pension advice and we've got Dan doing all his specialist divorce stuff etc etc so um but niching is crucial and what I really think is the crew the the the route of success in financial advice is niching and I think it's got to be a niche that A you're passionate about but B if you've got personal experience of it that will always shine through and and you know I look back on my career and I actually think do you know what that worked out really quite well and I can see a logical progression but at the time I was probably lurching about from place to place you know my son was born with special needs that certainly set me back you know took my life over for quite a while but eventually and maybe it's my reaction I concentrated on what I could change and I thought right I've got to understand financial planning for someone who's got quite severe special needs okay ultimately you could argue I've created a business out of it and yes I have and it's never going to be the most commercial business of course it's not because I'm not that commercially motivated but that's taken me in all sorts of different areas and what I do find is that a lot of advisors out there now I've got contacts through LinkedIn and various other channels how do I go about specialising in some of the areas that you've built a reputation in I think um yeah and I could understand why you would why you have found um your place and absolutely your son being born with with special needs for the rest of his life.
• 1:11:21
  SPEAKER_00: And I had another guest on my podcast who's he went through exactly the same thing.
• 1:11:26
  SPEAKER_00: He ended up working for Frankel Topping over in the clinical negligence and PI side because of his experience of what he's gone through and how he was relatable then to the families that were also going through um situations where children had experienced clinical negligence and or personal injury.
• 1:11:44
  SPEAKER_00: And what I the more I learned about that side of it because I did a lot of recruitment at the time for Towery around that and Frankel Topping and I found the clinical negligence and PI side the whole pre-court post-court settlement you know having to go away and actually work out a financial plan that is going to look after so if someone's been in an accident for example they've lost both their legs well how does that actually impact their the their their life expectancy how does it impact their care you know everything and you take it into all into consideration build a financial plan to be able to give that person an income for the rest of their life which is due to them based on the unfortunate circumstances that have occurred in their lives whether they were born into it or whether they were or whatever and I just I just found that I found that whole thing fascinating and I that to me was like interesting financial planning.
• 1:12:36
  SPEAKER_02: It's hugely rewarding because of the nature of what you're actually trying to achieve.
• 1:12:41
  SPEAKER_02: So as I say you know I've spent my time on ultra high net worth very wealthy people uh in the city uh and I've kind of I looked at that and I thought well what actually are you achieving here of any use you've made an already very wealthy person maybe a little bit wealthier you know I wouldn't claim to have made them wealthier but I guess what I've done is added to their wealth one way or another do I actually find that satisfying personally no I don't really I I don't think I've achieved much of really any use but as you say if you can make sure that a ward of damages looks after someone for the rest of their life job done very rewarding.
• 1:13:21
  SPEAKER_00: And do you find that the how do you measure so that that that coming back to you okay so you do that you do that bit of work for somebody that's got a very in a very difficult situation I love the fact that you said you're not money motivated right and I'm I'm a very much like this I I'm money I'm money motivated to a point but I believe there's way more to life than money way more to life than money.
• 1:13:47
  SPEAKER_00: But how do you measure what that feeling is to you how do you measure it and and how do you get do you know what I mean?
• 1:13:54
  SPEAKER_02: Yeah I know I know exactly what you mean and don't get me wrong you know uh I'm not money unmotivated you know I've got three kids I'm the main breadwinner in the family you know so yes I I'm uh I you know and I can say this from the luxury of being at the end of my career and it's all gone quite well so um but I think if money is your main motivator it's gonna take you down a very different track you know it's never been my main motivator I've always sort of thought I'll make enough to look after the family which is my main motivation um but I think um I don't know I I I suppose how do you manage how do you um sort of monitor that satisfaction it's just do you feel good about what you've done you know what what I can honestly say Sam is over the last 30 40 years however long it's been I have never knowingly missold a product um I have certainly told various clients that that there's not a lot I can add here I'm not gonna charge you just for doing nothing yes I've certainly given you know quite a bit of pro bono advice to people and I've felt good about doing that you know I I suppose I've had quite a few cards a few little gifts from people who sort of remember it and it's just you do I feel good about what I'm doing?
• 1:15:28
  SPEAKER_02: Yes I do.
• 1:15:29
  SPEAKER_02: Yeah um and um uh that does that shine through absolutely because I think if you if if you come at this from being money motivated or or that being your one and only driving factor that will clearly come across to clients and you know I had a little tete with an advisor on LinkedIn a couple of weeks ago about this and I uh the comments were all taken down stuff like um it wasn't me that took them down by the way I I want to emphasize that but it was you know what you've just said there is a total discredit to you know you well you can't claim to be a financial advice professional given what you've just said that's not professional um uh you know I'll always go back at people on that um and I just think you know the world has moved on I think people coming into the profession today and I do talk to quite a lot of people who who sort of get this I'm passionate about keeping this independent financial planning profession going.
• 1:16:40
  SPEAKER_02: You know I I talk to quite a lot of people about that there are some very good financial planners out or financial planners who'd like to be financial planners rather but they just don't know how to get started.
• 1:16:54
  SPEAKER_02: And it is hugely difficult to get started in this independent financial planning profession because most of the firms that do it properly are relatively small.
• 1:17:06
  SPEAKER_02: You know and um we are in quite a fortunate position.
• 1:17:12
  SPEAKER_02: We have three trainees if I was absolutely focused on the bottom line would we have three probably not but again it's part of sustaining the firm and I'm quite happy to invest in those three people.
• 1:17:24
  SPEAKER_02: So we're we're a bit different maybe to some um but what I would really like to see is a is a route that will bring people into a financial planning profession not into product distribution which is the you know that's the difference I draw between those academies that are available at the moment they are put together by product distributors for obvious reasons to me they need to perpetuate their distribution channel well that's great and they've got the money to do it and the size to do it partly I think because of the disproportionate amounts of money they've made by flogging products over the course of the last 30 odd years you know so it's put them in a good position but these are now sort of self-perpetuating distribution models.
• 1:18:16
  SPEAKER_02: So what I would really like to see is a sort of independent financial planning academy.
• 1:18:24
  SPEAKER_02: It's an embryonic idea of mine but you know I think there's a quite a lot of financial planners like me at our end of the career that are quite passionate about how would you do it as a profession.
• 1:18:37
  SPEAKER_00: Dave so so so let's talk about that because if you you know when we talk about things like St James's place we're talking about here for example we're talking about MNG right where we but both of these I've put the big product distributors in a in a in a in a listeners to under a category.
• 1:18:55
  SPEAKER_00: The listeners to understand because some of them won't really understand.
• 1:18:58
  SPEAKER_00: So that you know those are the ones we're talking about and those are the ones that got the main academies and you know they can they can bring people through they can train them they've got the money to do it and elements of it it's I hear from what you're saying now and how you very you know what you know how you explained it was was Bahn I I get it.
• 1:19:17
  SPEAKER_00: I get that that that that view of it I can really get it.
• 1:19:21
  SPEAKER_00: And the other view is that they've got it there.
• 1:19:22
  SPEAKER_00: At least they're doing something about bringing you blood into the profession um albeit perhaps some of these people won't ever stay within that environment they may well have their eyes open to another area where they want to move into so it's a great entry point.
• 1:19:38
  SPEAKER_00: And secondly I love the fact that you are as an you know independent taking on trainees because again not everybody does because of the very fact that you said that it eats into profit because they're not making you money and you know in the very beginning but you've taken the view that it's like a again of a social responsibility to bring new people and new people in I think more firms need to take that approach.
• 1:20:02
  SPEAKER_00: But well let's let's just let's just brainstorm this what can because I like the idea of this I love the idea of it I'm an entrepreneurial type individual how do we create an independent academy well I I think one starting point Sam is I think chartered status should only be awarded to firms that are training at least one financial planner.
• 1:20:24
  SPEAKER_02: Okay dogmatic maybe some firms can't afford to do that but to me part of the part of the definition of a professional firm is it's taking steps to sustain its future now we all know that you can train people and they'll leave but it's better than nothing.
• 1:20:44
  SPEAKER_02: I think it should be part of a chartered or a CISI equivalent I think there should be at least one trainee in training.
• 1:20:57
  SPEAKER_02: What I would like to do is approach the chief execs of product manufacturers who do not have their own distribution channels.
• 1:21:07
  SPEAKER_02: You know we've mentioned a couple that manufacture and distribute down their own channels and I I am cynical about this but I do believe that the academies as such are more about maintaining that distribution channel than anything else.
• 1:21:24
  SPEAKER_02: Okay.
• 1:21:25
  SPEAKER_02: The logical end result if those academies are unchecked to me is we go back to where we were in the 1980s where we have 10 or however many very large sales forces dominating the market if that happens other companies will not have a route to get their product to market so what I'm saying to all those other chief execs is let's collaborate on this let's you fund an independent academy that will train independent financial planners of the future people like me and my firm will be able to give them on the job training experience all that kind of stuff but some firms need a bit of subsidy to do that.
• 1:22:18
  SPEAKER_02: We've got an obvious problem with the soft commission rules and all that kind of stuff but I just think there's got to be a way around this.
• 1:22:25
  SPEAKER_00: Okay so send them so firms that have so firms that have that don't have a distribution channel being like for example financial advisors going out for them selling those financial Canada I for example yeah um you know will St James's place ever ever recommend a Canada Life bond?
• 1:22:45
  SPEAKER_02: No they won't because let's just break it down so they fund it fund what well I th there's got to be um you know there's got to be a training program there's got to be well study materials are already there aren't they you know the CII or whichever other body produces them but there's got to be um a way to get these trainee financial planners uh uh up to qualified and signed off status it's very difficult for small independent financial advice firms to do it um but what we're seeing as well at the other end of the spectrum is an awful lot of retiring financial advisors selling their firms and their client bases to these big restricted product distributors that's because they have no one else in the firm largely to take them on um can I just stop so what what I what I think is that if we could bring all this together in a big melting pot, the the thing that stops it is funding one way or another is capital.
• 1:24:03
  SPEAKER_00: Okay but there's funding right so let's say for example we got the funding right so we had a specific amount of money and let's start really small right you had enough money there to bring in an internal trainer to train up some individuals to level four qualification let's say through the CII yeah and there was also soft skills training to teach them how to deliver financial planning financial advice in the right way let's say that a small academy allowed the individuals to continue on in their current jobs therefore they didn't need to stop their jobs to take a job in salary to do the qualifications how do you then distribute not to kind of commoditize an individual but how would you distribute let's say there's 10 people when got qualified in that academy how then do you decide on where those individuals actually go?
• 1:25:00
  SPEAKER_02: Well I think you've probably got as well to sort of have a tier or a group of firms that are willing to take these people on.
• 1:25:10
  SPEAKER_02: Now most firms would jump at the idea I I really think but what you've also got to do is have some degree of quality control over there.
• 1:25:20
  SPEAKER_02: You know we've developed our sort of training regime um we're bringing those three people on in with a view to developing them all into that final sort of finished product.
• 1:25:33
  SPEAKER_02: So you've you've got to have places for these people to go I think um how about this if if if if financial advisors can at least hit the ground running with qualifications that's a good thing.
• 1:25:50
  SPEAKER_00: That's a cost a firm doesn't have to bear but how about this how about this you have the academy it's there right so second careerists can go into that academy stay in their current roles go into that academy study their level four qualifications funded by the product providers that don't have distribution channel therefore giving back I know that a lot of them want to do this by the way therefore giving back but I have an agreement in place through the academy that there are a a number of firms across the UK so what I what we would consider to be truly independent right yeah truly independent southwest has a number of truly independent firms northeast truly truly truly number so it becomes a national a national academy the agreement being that the individual that comes into that academy perhaps is then interviewed by the relevant IFA firm before they start on their journey of those level four qualifications.
• 1:26:52
  SPEAKER_00: Yes that's a good idea and then at the so there's an agreement signed that upon qualifications being achieved you join that firm.
• 1:27:00
  SPEAKER_00: Yeah.
• 1:27:01
  SPEAKER_00: That makes sense that I think that I think would would have legs yeah so then those firms though for being selected would also have to pay into that academy a a fee if you like per month towards like the training and development or or to become some commitment.
• 1:27:22
  SPEAKER_02: Yeah and I think that's you know that's that's fair enough you know we've got to meet in the middle on this really but you know we we funded two apprentices and and one other guy and I'll come back to him actually because it that's quite an interesting point.
• 1:27:39
  SPEAKER_02: But yeah I you know I'm sure there's got to be legs in this Sam and and everyone's got an incentive because you know if if the only option a retiring IFA principal thinks he's got or she's got is to sell their client base out to a big consolidated Data.
• 1:28:01
  SPEAKER_02: What's going to happen is that the independent sector is going to be decimated, basically.
• 1:28:07
  SPEAKER_02: Now I know what the effect of 10 large sales forces was in the back back in the 1980s.
• 1:28:13
  SPEAKER_02: That's where I started from when we started our chat.
• 1:28:16
  SPEAKER_02: I am desperately keen to avoid that level of market domination again.
• 1:28:21
  SPEAKER_02: I don't think it's in anyone's interest apart from the shareholders of these big organizations.
• 1:28:26
  SPEAKER_00: Do you feel like independent is going to potentially be a thing of the past?
• 1:28:30
  SPEAKER_02: I think it will if it carries on like this, because I think, you know, there is so much private equity backed consolidation going on.
• 1:28:41
  SPEAKER_02: You know, you look at the legal and accountancy professions.
• 1:28:46
  SPEAKER_02: The legal and accountancy professions, you've got very few very large firms.
• 1:28:53
  SPEAKER_02: You've also got very few very small firms, relatively speaking.
• 1:28:58
  SPEAKER_02: The vast majority of law and accountancy firms are in that sort of 10 to 30 partner tier.
• 1:29:06
  SPEAKER_02: Well, it's totally the other way around in financial advice.
• 1:29:10
  SPEAKER_02: I can't remember last time I looked at the figures, but you know, a huge number of financial advisors, one way or another, are linked to these major massive sales forces.
• 1:29:22
  SPEAKER_02: The next biggest tier is one-person bands at the bottom.
• 1:29:27
  SPEAKER_02: They're not good for consumers either, because I'll come back to my point: a single individual cannot be a general practitioner.
• 1:29:34
  SPEAKER_02: What happens if a sole practitioner gets hit by a bus?
• 1:29:38
  SPEAKER_02: Everyone's in turmoil.
• 1:29:42
  SPEAKER_02: What we need to do is we need to encourage this middle tier.
• 1:29:46
  SPEAKER_02: And I think this academy is part of it.
• 1:29:48
  SPEAKER_02: What I also think is that you know, if we can train up financial advisors and align them with smaller practices who've got succession issues, that will work very well as well.
• 1:30:06
  SPEAKER_02: And what we have to be able to do is create a line of funding so that that financial advisor who's coming through is in a position to buy out the retiring principal.
• 1:30:16
  SPEAKER_02: Now, we all know how attractive um a financial advisor fee base can be.
• 1:30:24
  SPEAKER_02: Um, that may change a bit, actually, if consumer duty is implemented properly, because there's no doubt that a lot of people aren't getting particularly good value for money at the moment.
• 1:30:35
  SPEAKER_02: But I I think this has got to be the hope or the one hope for the independent, what I'd call financial planning profession to sustain itself.
• 1:30:48
  SPEAKER_02: Because I honestly think it's not going to be here for much longer unless people like me dig in and support it.
• 1:30:55
  SPEAKER_00: I like what you're saying now, and I am going to run with it because I'm in a position to do it, I think.
• 1:31:01
  SPEAKER_00: Because I'm what I'm progressively creating at the new financial plan of life, is getting me connected to some of these product providers.
• 1:31:09
  SPEAKER_00: And one thing I I know from having conversations with them is they want to get behind something.
• 1:31:15
  SPEAKER_00: You know, they want to put their money to uh to something to sponsor it and they're willing to do so.
• 1:31:20
  SPEAKER_00: So even on a micro scale, to create the Financial Plan of Life Academy.
• 1:31:25
  SPEAKER_00: So I've got the academies, which is located in the entry-level routes in, and we have financial plan of life graduates, which is going to allow firms who want to take on graduates to advertise the like particular speech to try and drive to drive graduates from university.
• 1:31:40
  SPEAKER_00: I have to the university.
• 1:31:44
  SPEAKER_00: But I do believe with what you're saying there, that's space, a financial planet life academy, right?
• 1:31:49
  SPEAKER_00: And that is a truly independent academy.
• 1:31:52
  SPEAKER_00: And if you can only, if you're looking to go independent, come into this academy.
• 1:31:58
  SPEAKER_00: The funding from the product providers, even if it's just a small amount, I know fantastic trainers that would sit within there and get them up to level four qualifications.
• 1:32:08
  SPEAKER_00: You know, what would you say?
• 1:32:09
  SPEAKER_00: CII, C I S I, what do you think is the best route?
• 1:32:12
  SPEAKER_02: Well, I well one thing I do believe is there should be one route.
• 1:32:18
  SPEAKER_02: One of the things that does frustrate me, you know, I'm a I came from the accountancy profession.
• 1:32:22
  SPEAKER_02: There are six chartered bodies, that does my head in.
• 1:32:25
  SPEAKER_02: Um we've got two main routes, I think, in financial advice.
• 1:32:30
  SPEAKER_02: Why I I am fundamentally opposed to the CII um and the PFS structure.
• 1:32:37
  SPEAKER_02: I've got nothing in common with the general insurer, not professionally, technically speaking.
• 1:32:44
  SPEAKER_02: Financial proper financial planning needs its own body.
• 1:32:47
  SPEAKER_02: Um, I don't think the CISI is perfect because I think that's driven by the investment sector.
• 1:32:54
  SPEAKER_02: I think what needs to happen is the PFS and the old IFP, as it was, should come together and form an independent professional body for the financial planning profession.
• 1:33:10
  SPEAKER_02: Um I'm I'm a massive I I'm you know, I am a member of both the CISI and the PFS.
• 1:33:17
  SPEAKER_02: I'm chartered and I'm certified.
• 1:33:19
  SPEAKER_02: I wish I was one or the other, frankly.
• 1:33:22
  SPEAKER_02: Yeah.
• 1:33:24
  SPEAKER_00: It's confusing to those coming into the profession.
• 1:33:26
  SPEAKER_02: It's usually confusing, you know, the and the fact that there are different routes available to get to level four.
• 1:33:33
  SPEAKER_02: It's just more smoke in mirrors and more confusion.
• 1:33:36
  SPEAKER_02: Why does it need to be that complicated?
• 1:33:38
  SPEAKER_02: Let's just have one.
• 1:33:40
  SPEAKER_00: Um as well that the qualification is.
• 1:33:50
  SPEAKER_02: But um, you know, the the politics of smoking mirrors doesn't do any of us any favours.
• 1:33:56
  SPEAKER_02: It really doesn't.
• 1:33:57
  SPEAKER_02: We've got a real reputation for smoking mirrors.
• 1:34:01
  SPEAKER_02: Um we should start cutting through some of that, I think.
• 1:34:05
  SPEAKER_00: What's your um what's your turnover like within your business?
• 1:34:09
  SPEAKER_00: Have you, you know, how do do you keep staff in place for quite some time?
• 1:34:13
  SPEAKER_02: Yeah.
• 1:34:14
  SPEAKER_02: Yeah.
• 1:34:15
  SPEAKER_02: By and large, yes, we do.
• 1:34:17
  SPEAKER_02: Um I mean, proof will be in the pudding with the three that were training up, quite frankly.
• 1:34:21
  SPEAKER_02: That's you know, where have they come from?
• 1:34:23
  SPEAKER_00: Where have they come from?
• 1:34:24
  SPEAKER_02: Well, it's interesting.
• 1:34:25
  SPEAKER_02: What what's what's really interesting um is that they come from quite different backgrounds.
• 1:34:32
  SPEAKER_02: Um and um uh Matt uh he was training first tier of training as a chartered accountant, um uh with one of the major practices, and uh actually it's quite interesting because uh we offered his mum a job in the back office, uh, and his mum actually said, Would you mind offering that job to my son instead?
• 1:34:59
  SPEAKER_02: Uh and I thought that's a bit weird, but why?
• 1:35:03
  SPEAKER_02: And what she explained was that he was training as a trainee chartered accountant, but he didn't feel it was right for him.
• 1:35:10
  SPEAKER_02: He'd recognize that a lot earlier than I did, put it that way.
• 1:35:15
  SPEAKER_02: His his uh his uncle was a financial advisor, his brother had gone to work in his uncle's firm.
• 1:35:23
  SPEAKER_02: There wasn't room for Matt to go and work in that firm as well.
• 1:35:27
  SPEAKER_02: But Matt was quite keen, having understood what his brother was saying about what he was doing.
• 1:35:34
  SPEAKER_02: And I just thought, yeah, fine.
• 1:35:36
  SPEAKER_02: Well, you know, we're we'll offer the job to Matt then.
• 1:35:38
  SPEAKER_02: You know, I met Matt, we met Matt, we interviewed Matt, we said, well, fine, you know, a bit weird, but well, well, your mum doesn't want the job, your mum, your mum wants us to give the job to you.
• 1:35:48
  SPEAKER_02: So we did.
• 1:35:49
  SPEAKER_02: Um Lauren came from a background with another financial advisor.
• 1:35:55
  SPEAKER_02: Um, I'm not gonna name that financial advisor, but let's just say a lot of what they said and did to Lauren was really quite objectionable.
• 1:36:06
  SPEAKER_02: Um, Lauren is going through a gender transition, and uh, one of my major successes in this firm, I feel, is that Lauren was happy.
• 1:36:18
  SPEAKER_02: Lauren joined us as Rob.
• 1:36:19
  SPEAKER_02: Um, after two or three years, probably Rob felt comfortable enough to tell me what was going on in Rob's mind.
• 1:36:29
  SPEAKER_02: Um, and we've been obviously very so it's a no-brainer.
• 1:36:33
  SPEAKER_02: Why wouldn't we be a sensible, reasonable human beings?
• 1:36:37
  SPEAKER_02: The previous advice firm had found out about this, and let's just say totally out of order was their reaction to it.
• 1:36:46
  SPEAKER_02: I'm not gonna name them, but you know, uh it just should not have happened, anyway.
• 1:36:50
  SPEAKER_02: Um Lauren had a background in financial advice, it was pretty low-level financial advice, to be quite honest, but a lovely person with a lot of life experience, obviously, which is ideal for our kind of client base.
• 1:37:06
  SPEAKER_02: And then the third one, and this is this is what I also try and um um sort of suggest small practitioners think about quite carefully.
• 1:37:16
  SPEAKER_02: Um, Tom joined us because he had he knew another very good quality financial advisor in the Southwest, who's uh been a friend of mine for probably 20 years.
• 1:37:29
  SPEAKER_02: Tom was working as an accountant, he just about qualified as a chartered accountant and realized that actually what he was really interested in was personal financial advice.
• 1:37:39
  SPEAKER_02: And he spoke spoke to my friend who said, Oh, I know a bloke who who reached that conclusion after nine years as a as an accountant.
• 1:37:49
  SPEAKER_02: Go and have a word with him.
• 1:37:50
  SPEAKER_02: And I met Tom, and Tom just impressed me straight away with his his understanding of what a financial planning career would be and why he wanted to do it.
• 1:38:01
  SPEAKER_02: And Tom's issue was obviously his, you know, it this is a big issue with second careerists.
• 1:38:09
  SPEAKER_02: Um, how do I how do I leave a career at this level of remuneration and retrain in another one?
• 1:38:16
  SPEAKER_02: Well, at the time we um our books were all dealt with by an external bookkeeper.
• 1:38:23
  SPEAKER_02: You know, I'm I haven't got the time or the inclination to be dealing with all of that.
• 1:38:27
  SPEAKER_02: So we had the bookkeeping outsourced, and I was beginning to think, do you know what we need to streamline this and get better information as we're growing?
• 1:38:36
  SPEAKER_02: I and I'm it was a little bit frustrating doing it third party, and I just started thinking, well, okay, well, we're paying that much for external bookkeeping.
• 1:38:48
  SPEAKER_02: If I bring Tom in, um we we had a an internal bookkeeper to some extent.
• 1:38:56
  SPEAKER_02: I if I bring Tom in, he can easily add a bit more to her understanding.
• 1:39:03
  SPEAKER_02: That will enable us to take back the day-to-day accounting.
• 1:39:09
  SPEAKER_02: Tom, because he's at the level he is, can can do what the bookkeepers were doing probably in about a day and a half a month tops.
• 1:39:17
  SPEAKER_02: Um, so by taking out that external bookkeeping cost, I've freed up that cash to add what I would do be paying to an administrator.
• 1:39:30
  SPEAKER_02: And now the end result is we've got a nearly qualified chartered accountant working as an administrator for us who's on the bottom.
• 1:39:40
  SPEAKER_02: Well, he's a couple of rungs up the ladder now without having to drop his salary too much.
• 1:39:48
  SPEAKER_02: Clever.
• 1:39:48
  SPEAKER_02: Um, you know, and it's worked extremely well.
• 1:39:50
  SPEAKER_02: And I literally on LinkedIn this morning, I I was looking at um there's a woman out there who is doing exactly the same thing.
• 1:40:00
  SPEAKER_02: She's taken a career break because she's been bringing up kilt uh children, but her background is is bookkeeping and accountancy.
• 1:40:08
  SPEAKER_02: So I've offered to sort of connect with her and say, well, actually, if you can find a firm that wants to save on its bookkeeping costs, it's quid pro quo.
• 1:40:19
  SPEAKER_02: I I know another new entrant who contacted me from let's call it loosely the home counties, very, very experienced marketeer.
• 1:40:28
  SPEAKER_02: I am 100% sure she could add a lot to a firm of financial marketing perspective.
• 1:40:34
  SPEAKER_02: I've been saying that pro quo.
• 1:40:36
  SPEAKER_02: You know, and and I'm a huge believer in second career, so obviously I would be because I am one.
• 1:40:41
  SPEAKER_00: Yeah, I'm a firm believer in the second career model as well.
• 1:40:44
  SPEAKER_00: And you'll bang on about the marketers because so many firms just don't really quite have a grasp yet of marketing within the financial planning space.
• 1:40:52
  SPEAKER_00: And you're right as well about bringing that cost on an internal basis and then just training them up alongside that role.
• 1:40:58
  SPEAKER_00: So they're kind of like hybrid really for the first year or so.
• 1:41:01
  SPEAKER_02: Exactly.
• 1:41:02
  SPEAKER_02: And what I hope then, Sam, is it instills loyalty.
• 1:41:05
  SPEAKER_02: You know, we we've done you a favor, we've given you that start.
• 1:41:09
  SPEAKER_02: And you know, this this is more satisfying to me than looking at the bottom line all the time.
• 1:41:15
  SPEAKER_02: You know, what we're doing is we're building a very sustainable firm and we're helping people change their lives.
• 1:41:21
  SPEAKER_02: And you know, and the root of the the root, I suppose, of my philosophy, you know.
• 1:41:26
  SPEAKER_02: I told you when I moved up to Bristol, I sort of I did um a couple of years in a couple of accountancy practices, and then thought, right, the time is now, I'm gonna cut loose and set up my own firm.
• 1:41:40
  SPEAKER_02: Um, and I did set up my own firm.
• 1:41:42
  SPEAKER_02: I uh it was a uh it was I suppose a bit of an accident almost, but I had a major tete with one of the partners in one of the accountancy firms, and the end result was I just thought I can't stay here any longer.
• 1:41:57
  SPEAKER_02: I actually had a regulated business on the side, it was all registered with the FCA, it didn't trade.
• 1:42:03
  SPEAKER_02: The only reason I had it as a regulated business was so I could give pro bono financial advice to parents and carers of kids with special needs.
• 1:42:13
  SPEAKER_02: I wasn't trading it, I wasn't making any money out of it, it would just enable me to do that.
• 1:42:17
  SPEAKER_02: Um so it was already sitting there.
• 1:42:21
  SPEAKER_02: Um I had a massive bus stop with the partner.
• 1:42:25
  SPEAKER_02: The end result was I I left.
• 1:42:27
  SPEAKER_02: Um, and I didn't tell my wife for three months that I didn't have a job because we had a young family.
• 1:42:35
  SPEAKER_02: You know, I was living on I had three months pay coming in.
• 1:42:39
  SPEAKER_02: So the first thing I did was I well, I left the house dressed in the same suit, same time in the morning, drove around for a bit, went for a cup of tea in a cafe, uh, but by the end of that day I'd found some premises.
• 1:42:53
  SPEAKER_02: Um and then uh, you know, a mate of mine ran a um uh an office furniture business, so I bought some furniture off him.
• 1:43:02
  SPEAKER_02: He was here's a blast from the past, he just cleared out a big office for Allied Dunbar.
• 1:43:07
  SPEAKER_02: I bought a lot of Allied Dunbar furniture at very low prices.
• 1:43:10
  SPEAKER_02: Anyway, yeah, cut a long story short, I'd set up the infrastructure of my firm and I began using my accountancy experience to forge links with local accountants.
• 1:43:22
  SPEAKER_02: What I hadn't realized was that I'd come across the name David Norton, who to me is the godfather of financial planning in this country, absolute top guy he was.
• 1:43:34
  SPEAKER_02: I'd come across his name, and I knew he operated from Bristol loosely, but I was new to the area, and really what I then did was I'd unwittingly set up three miles down the road from his practice, and he found out about me because I was a new kid on the block and I was a chartered accountant, all the rest of it.
• 1:43:54
  SPEAKER_02: Well, that guy was so massively supportive to me when I was setting up this new firm, and I used to sort of try and thank him profusely, and he used to bat me away.
• 1:44:05
  SPEAKER_02: And he'd say, the best way you can thank me is bear in mind the help I've given you, and you go and give that help to somebody else.
• 1:44:14
  SPEAKER_02: And so, this is why I suppose I'm so passionate about all this.
• 1:44:19
  SPEAKER_02: I just think it it's I'm he passed the mantle to me, and I'm passing it on to other people.
• 1:44:24
  SPEAKER_02: And what we're all trying to do, what the root of it all is we want to see an independent financial planning profession.
• 1:44:34
  SPEAKER_02: And I don't use the word profession lightly.
• 1:44:37
  SPEAKER_02: To me, profession means a proper 100% aligned training scheme.
• 1:44:45
  SPEAKER_02: It means professional standards when it comes to ethics, when it comes to fees and transparency and all that kind of stuff, but above all, it is completely separated from product manufacture.
• 1:44:59
  SPEAKER_02: We sit in the middle, our role is planning.
• 1:45:03
  SPEAKER_02: All financial advisors will say they're planners, but there is a real difference here.
• 1:45:07
  SPEAKER_02: I've always come at this from the planning angle, the product is the end result, and a lot of planning doesn't need a product, it's the final stage in implementation.
• 1:45:20
  SPEAKER_02: But you can only be a profession, in my eyes, if you're completely separate from product manufacturer.
• 1:45:29
  SPEAKER_02: Any financial advisor who is acting as a distribution channel for a product manufacturer is, in my eyes, simply a salesperson for that principle's product range.
• 1:45:41
  SPEAKER_02: And I know you know I have all these debates on LinkedIn with various people who represent those various different distribution channels.
• 1:45:49
  SPEAKER_02: They won't change my mind, and I probably won't change theirs.
• 1:45:51
  SPEAKER_00: But I won't.
• 1:45:53
  SPEAKER_00: And I think the two can live in unison, by the way.
• 1:45:56
  SPEAKER_00: I don't think that there is I get it.
• 1:45:58
  SPEAKER_00: I get I get I get where you're but I think the two what we need though is we need this IFA Academy way of bringing people through into IFA business and not being dominated by the product provider.
• 1:46:10
  SPEAKER_02: Exactly that.
• 1:46:11
  SPEAKER_02: And the key word to me, Sam, is profession.
• 1:46:14
  SPEAKER_02: Now, I cannot reconcile the use of the word profession with distribution channel.
• 1:46:22
  SPEAKER_00: Okay, I get it.
• 1:46:23
  SPEAKER_02: Yeah, yeah.
• 1:46:24
  SPEAKER_02: Um and so what I'm really passionate about is what I would call the financial planning profession.
• 1:46:31
  SPEAKER_02: And I actually think that chartered status should be reserved for people who are independent of the product manufacturer or distribution channel because I think that again causes confusion.
• 1:46:44
  SPEAKER_02: I have no end of contact from chartered financial planners who work within those distribution channels saying, Well, I'm just like you, I'm a chartered financial planner.
• 1:46:53
  SPEAKER_02: Well, my view is you're a very well-qualified salesperson, you're not a professional.
• 1:46:59
  SPEAKER_02: I don't think you can be if you're directly linked to the product manufacturer and distribution, you know, and and it's a simple black and white view, but I'm a simple black and white northern in many ways.
• 1:47:13
  SPEAKER_00: No, I I I I hear what you're saying.
• 1:47:15
  SPEAKER_00: You're saying that really the chartered status should only be for somebody that is truly independent.
• 1:47:21
  SPEAKER_00: Independent and can prove it.
• 1:47:22
  SPEAKER_00: Yeah, I get I get that.
• 1:47:24
  SPEAKER_00: I get that.
• 1:47:24
  SPEAKER_00: It's not.
• 1:47:26
  SPEAKER_02: No, no, it's not, you know.
• 1:47:29
  SPEAKER_00: A master's degree in psychology, can someone could work in financial planning and be a master in psychology.
• 1:47:34
  SPEAKER_02: Exactly that, you know.
• 1:47:35
  SPEAKER_02: But I suppose I'll come back to law and accountancy I would describe as professions.
• 1:47:41
  SPEAKER_02: Um the difference is the product in law and accountancy is technical advice.
• 1:47:52
  SPEAKER_02: The product in financial planning is technical advice, but the product, if you're part of a distribution channel, is the product, if you know what I mean.
• 1:48:05
  SPEAKER_02: And I think if you're part of that distribution channel, you you may give some amount of sort of uh planning advice, but it's limited to the amount of planning you need to do to get to the end result, which is sell that product.
• 1:48:23
  SPEAKER_02: So, you know, I think independent financial planning is totally divorced from regulated products, if you're with me.
• 1:48:32
  SPEAKER_02: It's sort of you either get this or you don't.
• 1:48:34
  SPEAKER_02: There's an I get what you're I get.
• 1:48:37
  SPEAKER_02: There's an awful lot of financial planners out there who get it.
• 1:48:40
  SPEAKER_01: Yeah, I get your view.
• 1:48:42
  SPEAKER_02: You know, and I I I said to you earlier, I don't call myself an IFA because I actually think that terminology frightens more people than it comforts.
• 1:48:54
  SPEAKER_02: And what's really interesting, you know, I suppose how do I describe myself?
• 1:48:59
  SPEAKER_02: Well, I describe myself probably as a chartered financial planner, and very often that stimulates a bit of conversation, you know.
• 1:49:07
  SPEAKER_02: Well, well, what is that?
• 1:49:08
  SPEAKER_02: I've never heard of it.
• 1:49:10
  SPEAKER_02: Um, and it what's really interesting is that you know, you're in some social event and you're trapped in the corner talking to someone you never met before, and it's hello, what's your name, and what do you do?
• 1:49:21
  SPEAKER_02: Well, I I've got a couple of stock answers to that, you know, and I do test the water.
• 1:49:25
  SPEAKER_02: Sometimes I'm a chartered financial planner, sometimes I'm a chartered accountant.
• 1:49:29
  SPEAKER_02: In in those two cases, people might think, oh god, I'm talking to the boar in the room, etc.
• 1:49:36
  SPEAKER_02: But particularly when I say accountant, but um but what it doesn't do is it doesn't instill fear, it sort of instills a bit of sort of I'd describe it as board respect.
• 1:49:49
  SPEAKER_02: Okay, you're a professional person, and very often it's oh, what what's your firm and what field do you specialise in, etc.
• 1:49:56
  SPEAKER_02: etc.
• 1:49:57
  SPEAKER_02: Well, my other answer when asked.
• 1:50:00
  SPEAKER_02: That question is I can use I'm an IFA or I'm a financial advisor.
• 1:50:05
  SPEAKER_02: The reaction to that is more often than not, fear, or I better bugger off and back out of this before he tries to sell me something.
• 1:50:16
  SPEAKER_02: You know, and I that that is my personal experience.
• 1:50:19
  SPEAKER_00: Is that more of a generation though that would be associated with it?
• 1:50:23
  SPEAKER_00: Yeah.
• 1:50:24
  SPEAKER_00: So if you said you were a charter, because if I was maybe, you know, have you ever tried chartered IFA, for instance?
• 1:50:30
  SPEAKER_02: No.
• 1:50:32
  SPEAKER_02: No, I haven't actually.
• 1:50:34
  SPEAKER_00: You know, that's you know, I couldn't just imagine if you said you were an IFA to somebody that was maybe 21 years old, they might perk up their ears a little bit.
• 1:50:42
  SPEAKER_00: You say it to someone who's 60 and had a mortgage endowment plan sold to them by some dipstick.
• 1:50:46
  SPEAKER_00: Yeah, you know, and they've got a problem with it, and they think, God, oh, you know, I've I've heard of IFAs, they're just crooks, you know.
• 1:50:53
  SPEAKER_00: So I believe, you know, I think the word I think the term IFA had had its negativity, but I think it's had its negativity and it's attached to a generation.
• 1:51:03
  SPEAKER_00: And that generation haven't passed that down to their children, for instance.
• 1:51:07
  SPEAKER_00: And I think what I'm finding with the younger guys that are coming through is they're really interested in IFA, but they're not seeing it out there as much.
• 1:51:14
  SPEAKER_00: And it they're seeing it as being a far more difficult route to get into.
• 1:51:18
  SPEAKER_02: Yeah, and you see, Sam, the other the other thing is that to me, the definition of a profession means that you're aligned around a common set of standards.
• 1:51:29
  SPEAKER_02: Now, one thing about financial advice, as you know, is there are no common standards.
• 1:51:35
  SPEAKER_02: You know, we all have to be regulated by the FCA, but how we go about our work and how we operate our service and how we document our advice and how we charge for whatever it is we're doing, there is no common standards.
• 1:51:52
  SPEAKER_02: We're a massive spectrum.
• 1:51:55
  SPEAKER_02: Um and I think, you know, one good thing about the old IFP and CISI is it's got this very defined process.
• 1:52:03
  SPEAKER_02: Now, we're a chartered firm, but we are not a CISI accredited financial planning firm.
• 1:52:11
  SPEAKER_02: And the reason is that I don't believe that process is right for every client.
• 1:52:18
  SPEAKER_02: Yes, I use very detail, and we use very detailed cash flow modelling in certain cases and predominantly in personal injury type cases, or increasingly in divorce-related cases.
• 1:52:31
  SPEAKER_02: So we use it where we think it's appropriate.
• 1:52:34
  SPEAKER_02: But one of the other things about my firm is it's never going to be fitting clients into a predefined service.
• 1:52:43
  SPEAKER_02: We I'm an absolute dogmatic believer in tailor the service to the client.
• 1:52:49
  SPEAKER_02: There is no way I'm gonna start doing some really wizzy cash flow modelling using voyant or something similar if I don't think that the time involved is justified in that case.
• 1:53:03
  SPEAKER_02: Right.
• 1:53:04
  SPEAKER_02: You know, what's the point of me just whacking up a fee if it's not gonna produce any value?
• 1:53:10
  SPEAKER_02: So consumer duty has no fears for me at all, has no fears for the firm.
• 1:53:14
  SPEAKER_02: I think we're already there.
• 1:53:16
  SPEAKER_02: Yes, we've got to document a few things and dots a few eyes and all that sort of stuff, but philosophically, we're bang on already.
• 1:53:22
  SPEAKER_02: You know, but so my big beef with the CISI is I get that process, absolutely, I get that process, and where it's right, it's absolutely right, but it is not right for everybody.
• 1:53:36
  SPEAKER_02: Um, so we will never be a CISI accredited firm unless the CISI agrees that actually you don't have to put every client through that process and detail cash flow modelling.
• 1:53:50
  SPEAKER_00: I like it.
• 1:53:51
  SPEAKER_00: Dave, I'm gonna draw this conversation to an end.
• 1:53:54
  SPEAKER_00: Well, it's gone on a while, hasn't it?
• 1:53:55
  SPEAKER_00: It's gone on a while.
• 1:53:56
  SPEAKER_00: I had a feeling we would, yeah.
• 1:53:58
  SPEAKER_00: I'm okay with that because I've really enjoyed this conversation.
• 1:54:02
  SPEAKER_00: Do well, so have I, Sam.
• 1:54:03
  SPEAKER_00: Yeah.
• 1:54:04
  SPEAKER_00: I've really enjoyed it, and I've learned a lot from this.
• 1:54:07
  SPEAKER_00: And um, you know, I I get guests come on the podcast, about 105 guests now, and um, I've really enjoyed this episode.
• 1:54:16
  SPEAKER_02: I felt like we can change something here because I would love to get that academy off off the ground.
• 1:54:24
  SPEAKER_02: I would, you know, I will do whatever it takes to sustain an independent professional financial planning sector, yeah, you know, and you can count on my support.
• 1:54:36
  SPEAKER_00: Well, you've proved me right as well, because well, I I I knew you were the type as I said, you the first I come across you was on social media and you were very opinionated.
• 1:54:46
  SPEAKER_00: And and but but the thing is though, Dave, is that people people shy away from being opinionated on social media for fear of reprisal of what they look like.
• 1:54:57
  SPEAKER_00: And I found your approach, it was challenging and I liked it.
• 1:55:01
  SPEAKER_00: And I thought to myself, well, this guy's not an idiot at all.
• 1:55:06
  SPEAKER_02: And he's not admitting and he's not admitting that view at all over the course of the last hour and a half, wherever you're gonna be able to do that.
• 1:55:11
  SPEAKER_00: And he's not he's not misinformed.
• 1:55:14
  SPEAKER_00: And then when I spoke to you on the telephone that day, I thought, yeah, you know, there's something running through this guy, these intrinsic core values that that are coming from a really good place.
• 1:55:24
  SPEAKER_00: And you've just backed it up, and the whole conversation that we've had today has been it's been great.
• 1:55:29
  SPEAKER_00: And yeah, your values are clearly there, and I can see them, and I would feel so comfortable in referring somebody to you.
• 1:55:36
  SPEAKER_00: I would feel so comfortable.
• 1:55:38
  SPEAKER_00: In fact, my mother-in-law has just come into inheriting quite a large sum of money, but she has disabilities.
• 1:55:44
  SPEAKER_00: Okay.
• 1:55:45
  SPEAKER_00: They've just bought a house, but they've gone through some serious stress around it, and she herself is on benefits and all of this, and she's worried about losing her benefits because they've inherited some money, they want to buy a house and they've got a little bit of money left over, what to do with it.
• 1:55:59
  SPEAKER_02: And I'm gonna she's no, this that's meat and drink to us, Sam.
• 1:56:03
  SPEAKER_02: And you know, this is you know, one of the reasons I'm so passionate about people with disabilities is you you've just outlined to me a situation that happens very often.
• 1:56:14
  SPEAKER_02: Somebody's come into an inheritance in the wrong way, and it potentially is going to compromise eligibility for benefits and all that sort of stuff, you know.
• 1:56:24
  SPEAKER_02: And it's you know, I mean, that well, uh one of the other big things that we could do on that score is I've I've just introduced benefits advice as well.
• 1:56:32
  SPEAKER_02: You know, really that's important to a lot of our clients, and I just want to bang the drum on that for a minute if I can, because we haven't done it by recruiting a benefits advisor because I didn't want to pull one out of a charity.
• 1:56:45
  SPEAKER_02: Invariably, if I want to recruit one, I'm gonna pull them out of a charity where they're doing good works.
• 1:56:50
  SPEAKER_02: So we've reached a commercial agreement with Exeter Citizens Advice and their trading business so that we can access benefits advice very quickly and very directly for our clients, but we don't make any money out of that.
• 1:57:05
  SPEAKER_02: We we have bought some software, we've tailored it, we want to cover our costs.
• 1:57:09
  SPEAKER_02: But if uh we don't make profit out of benefits advice, we we give that back to the CAB as a charitable donation.
• 1:57:17
  SPEAKER_02: You know, that's kind of just part of our ethos.
• 1:57:19
  SPEAKER_02: Um we'd be more than happy, and you know, as I say, the we give anybody a bit of time free of charge, Sam.
• 1:57:27
  SPEAKER_02: So I'm I'm more than happy to brilliant.
• 1:57:29
  SPEAKER_00: Well, I'm gonna arrange that.
• 1:57:30
  SPEAKER_00: I think she should definitely speak to you.
• 1:57:33
  SPEAKER_00: Um, and actually, with the benefit side of things, right?
• 1:57:35
  SPEAKER_00: That's you're your spot on there.
• 1:57:37
  SPEAKER_00: It's so tricky to find uh clear, honest uh advice where someone's not trying to make a quick buck again off the back of somebody's misery or fear or worry.
• 1:57:50
  SPEAKER_00: That's the thing.
• 1:57:50
  SPEAKER_00: Like she made herself so sick through worry, she's got lots of problems anyway.
• 1:57:55
  SPEAKER_00: She's sick anyway, and and she's had this windfall essentially, sadly, from the mother in her mother-in-law dying.
• 1:58:03
  SPEAKER_00: Okay.
• 1:58:04
  SPEAKER_00: But they had to, they she also, while she was on benefits, unwell and everything, and her partner was working, they were having to pay the fees for the mother-in-law to remain in the um in the nursing home.
• 1:58:19
  SPEAKER_00: The nursing home were charging extortionate fees and were putting loads of pressure on them to pay them all the time, even though they were both on benefits, and there was there was just no advice.
• 1:58:30
  SPEAKER_00: There was nothing around, there was nothing.
• 1:58:32
  SPEAKER_02: Well, this, you know, this is again partly why I've set up this firm because these areas are an absolute minefield.
• 1:58:39
  SPEAKER_02: And I've been through it four times with parents, I've been through it with my son for the last 13 years nearly.
• 1:58:47
  SPEAKER_02: Um, yeah, I know so many other parents of people with special needs, all that kind of stuff.
• 1:58:52
  SPEAKER_02: The point is, Sam, there but for the grace of God, go all of us, any of us could have an immediate social care need this time tomorrow.
• 1:59:01
  SPEAKER_02: Yeah, it just that's the way it can be.
• 1:59:03
  SPEAKER_02: And social care in this country, I mean, we could have another two-hour conversation about that.
• 1:59:09
  SPEAKER_02: It's just such a mess, and it absolutely frustrates the hell out of me.
• 1:59:14
  SPEAKER_02: Um, but yeah, you know, more than happy to have a chat with your mother-in-law.
• 1:59:20
  SPEAKER_00: Listen, Dave, again, I really value your time today.
• 1:59:23
  SPEAKER_00: Really value your opinion and your views and your experience, and um, I'm sure the listeners will also enjoy hearing this conversation.
• 1:59:31
  SPEAKER_00: If anybody's listening, well, we'll find out, won't we?
• 1:59:34
  SPEAKER_00: Yeah, if anyone's listening and wants to connect with Dave, just reach out on LinkedIn.
• 1:59:37
  SPEAKER_00: He's always on LinkedIn.
• 1:59:41
  SPEAKER_02: Well, sadly, you see, as you get towards the end, what one of the things I I think you you you hit the nail on the head, you know, I can still, even though I'm as old and dodgery as I am, I can still remember my first experience as a financial advisor.
• 1:59:58
  SPEAKER_02: I used to walk into rooms in those days.
• 2:00:02
  SPEAKER_02: I was the youngest person in the room.
• 2:00:04
  SPEAKER_02: You know, the the the financial advice type sector was frankly dominated by middle-aged, overweight white men.
• 2:00:11
  SPEAKER_02: Not many of them had much hair.
• 2:00:13
  SPEAKER_02: Well, I've actually come around full circle now, as you can probably tell, you know, and so there is an element of sort of oh, you know, what a mess this all is.
• 2:00:24
  SPEAKER_02: You know, you do turn into a bit of a grumpy old man, but what I hope is I'm a constructively grumpy old man, and you know, this is honestly what I feel, and I feel it, I think, for all the right motives.
• 2:00:36
  SPEAKER_02: And if I can make a bit of a difference.
• 2:00:39
  SPEAKER_00: I think what you've suggested is a good idea.
• 2:00:40
  SPEAKER_00: I think what you suggested is a good idea, and I want to I want to run with it on a micro scale and see if I can get something off the ground that's a good idea.
• 2:00:50
  SPEAKER_02: Well, I can I can give you half a dozen names of people who'd be very keen to you know look for a route into an independent academy.
• 2:00:59
  SPEAKER_02: I could probably give you a good few names of you know experienced chartered financial planners like me who would be more than happy to support it.
• 2:01:09
  SPEAKER_00: I've got some I I've got some ideas.
• 2:01:11
  SPEAKER_00: One being the firms that are actually involved in it have to then come in and actually deliver training to those individuals.
• 2:01:17
  SPEAKER_02: Well, what one of the other things, just very quickly, Sam, I'm I've just crossed my mind.
• 2:01:22
  SPEAKER_02: Um, I don't know whether you've ever come across RQ ratings, but it's a new initiative.
• 2:01:28
  SPEAKER_02: Have a look at it.
• 2:01:29
  SPEAKER_02: I'll send you a copy of our RQ ratings, but basically, RQ is a new initiative which is designed to do independence due diligence on financial advice firms for predominantly the legal and accountancy professions.
• 2:01:46
  SPEAKER_02: You know, the legal accountancy professions, when they make referrals to financial advisors, their professional rules require them to understand the firm that they're referring to.
• 2:01:56
  SPEAKER_02: Well, RQ, as I understand at the moment, there's about 35 firms in the country that have been rated.
• 2:02:02
  SPEAKER_02: Um, we're one of them, and we've got a very good rating from it.
• 2:02:06
  SPEAKER_02: But what I do think is that actually RQ ratings firms would probably be quite keen to pack this up.
• 2:02:17
  SPEAKER_02: You know, I do know some very good firms across the country.
• 2:02:21
  SPEAKER_02: The professional financial planning world is is a good club to be part of.
• 2:02:25
  SPEAKER_00: Well, maybe then, maybe then we bring together a few people, right, over a round table discussion and we set it off and see what we can do.
• 2:02:33
  SPEAKER_00: Dave, let's do that.
• 2:02:34
  SPEAKER_00: I'm gonna end this now because I can talk to you forever.
• 2:02:38
  SPEAKER_02: And I've got to go home.
• 2:02:39
  SPEAKER_02: Well, likewise, you know, yeah, I can I can bag on for this about this for as long as you like, to be honest.
• 2:02:44
  SPEAKER_02: But anyway, yeah, no, it's good talking to you, Sam, and you know, we'll we'll pick it up again, definitely.
• 2:02:48
  SPEAKER_00: 100%.
• 2:02:49
  SPEAKER_00: Thank you.
• 2:02:49
  SPEAKER_00: So valuable.
• 2:02:50
  SPEAKER_00: Thank you for your time.
• 2:02:51
  SPEAKER_02: Okay, cheers, Sam.
• 2:02:52
  SPEAKER_02: Bye bye.