Latest / Financial Planner Life Podcast / Phillip Instone on being DA, & growing through acquisitions & buying retiring IFA client books

Transcript

Phillip Instone on being DA, & growing through acquisitions & buying retiring IFA client books · Financial Planner Life Podcast

0:02
SPEAKER_00: Hi, and welcome to the Financial Planner Life Podcast, where we talk to professionals at varying stages in their career about what it's like working in the wonderful world of financial planning and financial advice.
0:15
SPEAKER_00: This podcast is proudly sponsored by Recruit UK, a recruitment consultancy specifically focused on the financial services.
0:23
SPEAKER_00: They have a niche specialism, recruiting, within the financial planning industry, so check out their website for the latest job opportunities, hints and tips, and blog articles.
0:34
SPEAKER_00: Today's guest is Philip Instone, who is the director of PGI Financial, which is a directly authorized IFA firm.
0:42
SPEAKER_00: He's the only financial planner in his business, and that's the way he likes it.
0:46
SPEAKER_00: His strategy to grow his company hasn't been through individual client acquisition.
0:53
SPEAKER_00: It's actually been through acquiring retiring IFA client books and retiring IFA businesses.
1:03
SPEAKER_00: And he's going to share today why he has grown through acquisition and some of the things he's learnt along the way.
1:12
SPEAKER_00: I think this will be really interesting to any financial planner who's looking to grow their business, interested in acquisitions, but don't quite know where to start.
1:21
SPEAKER_00: And it should be really interesting for any aspiring financial planner because we go over his career history as well, from bank assurance into becoming a financial planner self-employed and eventually running his own directly authorised practice.
1:36
SPEAKER_00: I hope you enjoy it.
1:38
SPEAKER_00: Welcome to the Financial Planner Life podcast.
1:40
SPEAKER_00: And today I'm joined, sorry, by Philip Instone, who is um financial planning director at PGI Financial.
1:49
SPEAKER_00: Phil, how are you doing today?
1:50
SPEAKER_00: Or Philip, sorry.
1:52
SPEAKER_01: Yeah, well spotted there, son.
1:55
SPEAKER_01: Really well, thanks.
1:56
SPEAKER_01: Yeah, absolutely.
1:57
SPEAKER_01: Good weather here.
1:58
SPEAKER_01: So uh uh yeah, you've got a nice view of my vertical radiator.
2:01
SPEAKER_01: I'm afraid there's nothing snazzy in the background, but yeah, I'm in the office, working from home.
2:06
SPEAKER_00: That that whiteboard looks quite busy.
2:08
SPEAKER_00: What have you got going on there?
2:09
SPEAKER_01: Yeah, lots going on.
2:10
SPEAKER_01: Uh Gabriel reports, uh, various other bits and pieces.
2:14
SPEAKER_01: Uh just the normal stuff kind of thing.
2:16
SPEAKER_01: I mean, there's CPD on there, there's some emails to call back on.
2:19
SPEAKER_01: We're redeveloping the website.
2:21
SPEAKER_01: Uh, I've got callbacks to do.
2:23
SPEAKER_01: Um, yeah, it's um it's been busier, but there's enough on there to keep me keep me working uh hard at the moment.
2:33
SPEAKER_00: So uh how how have you how have you found the whole lockdown situation, COVID?
2:37
SPEAKER_00: Is it affected your business at all?
2:39
SPEAKER_01: Um it has affected it uh in the way that um uh as you know, Sam, I I bought another practice uh in February.
2:46
SPEAKER_01: So it's the kind of the third acquisition we've done uh since setting up the firm uh about nine years ago.
2:53
SPEAKER_01: And um yeah, the the the dynamics were kind of weird because we bought the firm in February, so we completed the legals in February, just literally as COVID was raising its head.
3:03
SPEAKER_01: So, in terms of timing, it was kind of the best time and the worst time.
3:07
SPEAKER_01: Um, I think the good thing is that we managed to conclude all the face-to-face meetings, the legals and all the technical bits and pieces before lockdown, which is great.
3:16
SPEAKER_01: Um, but then equally you're kind of taking on board a raft of new clients who are expecting to and have received a letter from me pertaining to the fact that you know, reassuring them, this guy, your old advisor's retired.
3:29
SPEAKER_01: Uh, you know, we're gonna come out with joint meetings, we're gonna continue that relationship, I'm gonna introduce myself.
3:34
SPEAKER_01: Nothing.
3:35
SPEAKER_01: You know, we couldn't provide any of those face-to-face relationships.
3:38
SPEAKER_01: So it's been pretty tricky.
3:40
SPEAKER_01: Uh, we've had to do it by letter, uh, by post.
3:44
SPEAKER_01: At the same time, my team of uh uh paraplanners and administrators, relatively small team, there's three ladies who work for me, uh, all been in the industry for a long time.
3:55
SPEAKER_01: Uh, they're based in my uh office in Leeds, and we, you know, with COVID, suddenly we were pretty much um not able to go into the office, and so um very quickly we had to find a new way of working.
4:09
SPEAKER_01: Um, luckily for us, technology has always been the backstay of what we do, and because I travel all around the country, I've got, I mean, my colleagues take the Mickey because I've got clients from literally Scotland to the Isle of Wight, so everywhere in between, uh, London, uh, Cheshire, uh, the Midlands, um, a lot on the M62 corridor, but pretty much everywhere.
4:29
SPEAKER_01: I go where the quality business is.
4:31
SPEAKER_01: That's that's my business model.
4:33
SPEAKER_00: And so my clients spread out across the UK, or is that is that was that part of your strategy, or is it was it because you in you sort of brought them with you from areas you lived before?
4:43
SPEAKER_00: Because some people's strategy is to focus on one one specific area, isn't it, and have their clients within an area with one yeah, within one location.
4:50
SPEAKER_00: Um yeah, some some advisors I come across have got them spread out all over the UK, and in my head, that feels like a massive headache.
4:56
SPEAKER_01: Is it is it a massive headache or um it it's I think if you're running a business which is built organically, then to a degree you tend to you tend to operate within your locality and attract clients around that area.
5:16
SPEAKER_01: Um that can take longer, so it can take longer to get where you want to be.
5:23
SPEAKER_01: My goal has always been to have so when I started off my end game, um, it's kind of the peak place in my business, um, seemed to be me managing a number of high net worth clients and um you know bigger cases, um, bigger referrals, um, slightly more technical, so it uses my qualifications and um uh you're dealing with more assets under one family.
5:53
SPEAKER_01: So effectively you're building a relationship, but then it's spreading to all the different generations, and as a result, you're getting more under management, but through that one relationship.
6:01
SPEAKER_01: And if you manage those relationships well, even though there might be fewer of them, effectively that's a more, in my opinion, that's a more consolidating and efficient process.
6:10
SPEAKER_01: So I bought client banks over the last seven years, right?
6:15
SPEAKER_01: And I bought two client banks and then one DA firm, as I mentioned earlier, and they have clients all over the country.
6:24
SPEAKER_01: And so it depends, it depends on where those clients are.
6:29
SPEAKER_01: Um, yes, the majority might be on the M62 corridor in one particular location, but you'll always have outliers that are in London, Scotland, Wales, Ireland, wherever it might be.
6:40
SPEAKER_01: But actually, if you buy the right quality client bank, it's worth getting on a plane and going to Glasgow once a year.
6:46
SPEAKER_01: It's worth getting on a plane and going down to Southampton twice a year.
6:49
SPEAKER_01: Because actually, you know, we're talking a couple of hundred quid in plane fares and maybe a couple of hundred quid on hotels, but you might be managing a 1.5, 1.6 million client as opposed to doing, you know, spending three weeks seeing 12 clients in your locality.
7:08
SPEAKER_01: So it's kind of a false economy, I think.
7:10
SPEAKER_01: I think it's better for me to have fewer relationships that are more intrinsically valuable and it's a more efficient model.
7:18
SPEAKER_00: I think, yeah, traveling traveling to those higher net worth clients isn't a problem, a better quality client.
7:23
SPEAKER_00: It doesn't matter where they're based, it's all relative and it's all value, isn't it?
7:28
SPEAKER_01: It is, but there is a there is a caveat to that.
7:31
SPEAKER_01: COVID, going back to your first question, COVID has changed the landscape.
7:35
SPEAKER_01: So what happened in the past is that I've spent eight years travelling the country, condensing my clients from hundreds of clients down to a core of about 130 uh households.
7:48
SPEAKER_01: And so we manage around 43 mil uh in assets, uh, which is you know, for for one advisor, is a good level.
7:56
SPEAKER_01: Uh, it's a good turnover, and for me, it it enables me to um manage a team of administrators and paraplanners in-house, build our own portfolios, um, but be nimble enough to uh go in the directions I want to.
8:12
SPEAKER_01: So we haven't got the legacy of hundreds of other advisors to worry about.
8:16
SPEAKER_01: You know, I'm not sat in the office just doing compliance all day, I'm actually going out and speaking to clients and so on.
8:21
SPEAKER_01: So that that for me was part of the job, and that that's the bit that I enjoy.
8:24
SPEAKER_01: So I wanted to continue with that.
8:26
SPEAKER_01: But the one thing that COVID has done is meant that whereas I felt that actually some remote relationships would, I suppose, get bigger and bigger over the next few years, and so my traveling would reduce, um, better for the environment, uh, better for me personally.
8:40
SPEAKER_01: I'm more productive working from home or in the office.
8:43
SPEAKER_01: Um, and I thought that would maybe happen over the next five years.
8:46
SPEAKER_01: The reality is COVID has brought digitalization crashing through the door.
8:51
SPEAKER_01: So now clients are um they're actually appreciating the fact that I'm not turning up, uh, having spent the previous two nights in a hotel and then turning up at the door with potentially COVID.
9:02
SPEAKER_01: Um, so they're happy about that and they're they're settling into this um in into this more remote uh relationship.
9:09
SPEAKER_01: But the one thing that I am struggling with a little bit is all right, I'm not struggling, but I I think it would have a long-term negative effect, would be trying to do acquisitions where you don't have that initial face-to-face contact.
9:21
SPEAKER_01: Because I think there is a degree of skepticism over a remote relationship from day one.
9:30
SPEAKER_01: Um, whereas clients do buy into you, in that you know, there's a lot of stuff we can do in terms of sharing screens and sending them brochures, speaking to my class, my staff.
9:38
SPEAKER_01: We do um, you know, uh conference calls where there's more than me involved.
9:43
SPEAKER_01: Um, the reality is it's really nice just to touch base every now and then.
9:47
SPEAKER_01: So, what I'm gonna do is probably over the next 12 months is make sure that I actually physically meet every single one of the 40 households that I've that I've bought.
9:56
SPEAKER_01: Um, you know, it may or may not happen, but the offer's there.
9:59
SPEAKER_01: So uh and I think that will help cement the relationship long term.
10:03
SPEAKER_01: My existing clients are happy, you know.
10:05
SPEAKER_01: They I've already met them many, many times over the last 10 years, so they're already intrushed and they trust me.
10:11
SPEAKER_00: Here's an interesting question.
10:12
SPEAKER_00: How many times do you think you need to see somebody face to face to build that relationship to be then able to continue it over the internet via Zoom, for example?
10:26
SPEAKER_01: Um, I don't think it's the same with every client.
10:28
SPEAKER_01: I think I've got clients who come on board now who are Zoom or telephone only and have come on board in the last six months.
10:34
SPEAKER_01: And do you know what?
10:35
SPEAKER_01: They trust me already.
10:36
SPEAKER_01: And they trust me for two reasons.
10:38
SPEAKER_01: Number one, you know, I'm really transparent and there's regular contact.
10:42
SPEAKER_01: Um, we've provided them with lots of paperwork that's adding value.
10:46
SPEAKER_01: It's not kind of just paperwork for paperwork's sake.
10:48
SPEAKER_01: Um and we've worked hand in hand with the other advisors.
10:51
SPEAKER_01: So he would do telephone calls to introduce me first, maybe a conference call, and then I then take over the relationship.
10:57
SPEAKER_01: And a few of the clients, they've been great.
10:59
SPEAKER_01: In fact, all the clients have been great in that respect.
11:02
SPEAKER_01: The reason I'm saying that a face-to-face would at some stage help cement the relationship is that there are some clients who, you know, when we're talking, you know, the management of a million pound plus or half a million pound plus, I think there is an element of face-to-face contact that just goes some way to secure that relationship.
11:21
SPEAKER_01: So although it hasn't been, it hasn't been a problem, and those we haven't lost clients as a result.
11:26
SPEAKER_01: I think from my point of view, I'd just I'd just like to just really just you know touch base with them physically at least once every few years.
11:35
SPEAKER_01: And then I think that shows it also shows an element of intent and commitment from my point of view.
11:41
SPEAKER_01: You know, I'm prepared to get off on backside and actually drive to the house or a hotel or whatever, meet them and take some time out of my day to do that.
11:49
SPEAKER_01: Um for me, it helps attention is better, I think.
11:53
SPEAKER_00: Yeah, and I guess as well, they're they are tech they if someone's got a million plus, they're likely paying a higher level of a higher fee for a higher level of service.
12:03
SPEAKER_00: It's not like you're having to service, I don't know, 200 clients that are putting away five to ten thousand pound a year or something like that.
12:12
SPEAKER_00: I guess if you've got somebody on their their high net worth or ultra high net worth, yeah, I guess perhaps possibly you know, face-to-face is the right is the right way to do it.
12:21
SPEAKER_00: And technology obviously bridges the gap in situations like this and it comes becomes very useful as you've mentioned.
12:26
SPEAKER_00: You haven't lost clients, and in fact, it's probably helped you on your acquisition.
12:29
SPEAKER_00: It's interesting that you've gone through an acquisition at such a difficult time and it's been successful.
12:36
SPEAKER_00: It just shows also how like traditionally you would have done it compared to now and how technology has helped you facilitate that.
12:42
SPEAKER_00: Imagine if it was so many years back and you had a Nokia 33, 10, or you know, you'd have been screwed, wouldn't you?
12:48
SPEAKER_01: Well, the funny thing is, my but my first part of my career was working for First Direct, the telephone.
12:54
SPEAKER_01: So I'm really, really comfortable doing things over the phone.
12:56
SPEAKER_01: And I dealt with some really high high-level clients then over the phone.
13:00
SPEAKER_01: So that bit doesn't worry me.
13:02
SPEAKER_01: And I think we would have probably achieved similar results over the phone because we we we tend to put our paperwork in a very readable format, very uh it's very informative, but it's not laboured.
13:13
SPEAKER_01: So one of the big advantages of me going directly authorized a few years ago rather than being under a network is that my suit of village reports now are you know, instead of being 35 pages plus, they're kind of down to anywhere between uh seven and twelve pages, depending on the complexity of the case.
13:29
SPEAKER_01: So it's uh and actually the review uh the review letters are you know two pages.
13:34
SPEAKER_01: Um so they're they're far more readable, and I think they're far more value to a client.
13:39
SPEAKER_01: Um we don't skimp in in any way, the information is there, there's associated documents attached that they can read as well in terms of performance and KFIs and so on.
13:48
SPEAKER_01: Um, but I think the regulator has a point where they they've constantly said that what they want to see is advisors presenting information in a readable format.
13:58
SPEAKER_01: Whereas I think that the tendency for the networks is to almost make sure that they look at it from their own risk perspective and they can, you know, if if they can build a report with 35 pages, it's for their benefit because it covers off many, many warnings.
14:14
SPEAKER_01: Whereas the reality is a client won't read it, they'll make a decision based on whether they trust you as an advisor.
14:20
SPEAKER_00: Yeah, that's true.
14:21
SPEAKER_01: Whereas what I try and do now, I've gone directly authorized is present the information in a condensed, um, more readable format that's useful, and they can actually read through and they they will read the report.
14:33
SPEAKER_01: They may, you know, they may uh get to the end of six or seven pages and say, Well, that's enough, we now need to have a chat to fill it, but they'll actually read it.
14:39
SPEAKER_01: Whereas if I give them a report 35 pages, forget it.
14:42
SPEAKER_01: So I think, yes, we would have still done it over the phone, and certainly I would say 50% of the clients I've act um we've gone through uh the first appointment with during this acquisition period, they've just done telephone reviews, not Zoom.
14:56
SPEAKER_01: Um, and it's gone really well.
14:57
SPEAKER_01: It's gone really well, you know, providing you send everything out, you talk to them, you preempt the calls with a little chat, you keep in touch with them, keep them informed, and then you go through it over the phone.
15:06
SPEAKER_01: So it's worked okay.
15:07
SPEAKER_01: We've got there, but maybe just a bit slower.
15:09
SPEAKER_00: And that's the but that's the strength, isn't it, of a good financial planner is that relationship, that trust that they can build with the client.
15:15
SPEAKER_00: Because all they want, really, at the end of the day, is reassurance that what you're doing is the right thing for them and you're protecting them and their money's in the right place and being looked after in the right way, especially during things like COVID or changing over from one company to another.
15:27
SPEAKER_00: They just want to know that the trust is there, don't they?
15:29
SPEAKER_00: And um I think it's the that's the that's the job, isn't it, of the of the financial planner to build that trust and everything.
15:36
SPEAKER_00: And in the background, yes, you've got your model portfolios, your power planners doing your research, etc.
15:40
SPEAKER_00: Putting together these readable, simple, psycho-linguistic documents that someone can digest without being bored terribly, you know, reading them.
15:48
SPEAKER_00: I think that's that's key as well.
15:49
SPEAKER_00: If someone can go, oh look, that I I understand it by reading just like a couple of pages, but I'll phone Philip up if I need to.
15:55
SPEAKER_00: And I think um, yeah, that's the relationship, isn't it?
15:58
SPEAKER_00: And that's the strength in in building building your clients.
16:02
SPEAKER_00: Um, I was gonna say so.
16:03
SPEAKER_00: Philip, um, so with this podcast, then it's very much about understanding your career as well and how you got into, you know, obviously the end where you are right now is running your own financial planning practice, which is directly authorized, but I'm sure you didn't start out that way.
16:18
SPEAKER_00: Um, so what I'd love to understand really is if you can just give us and our listeners a bit of an overview of how you got into financial planning and got yourself to the place you are today.
16:29
SPEAKER_01: Sure, yeah, no problem.
16:30
SPEAKER_01: Um so uh ironically, I didn't go straight into banking because I wanted to do to do that.
16:37
SPEAKER_01: Um I joined the Navy when I left uh school.
16:40
SPEAKER_01: You know, my my goal was uh uh I was I was aiming to be uh a language expert.
16:45
SPEAKER_01: I was learning Russian, Arabic, and Spanish to degree level, and that was that was the idea, you know, uh to go in the Navy and do all that.
16:52
SPEAKER_01: Um didn't go to university, um decided that the Navy was was right, passed all the exams, was offered a commission, and then got a medical discharge because of my eyesight.
17:02
SPEAKER_01: So at 19, I was suddenly on my back foot saying, What the hell do I do?
17:05
SPEAKER_01: I'm you know, I haven't been to university.
17:08
SPEAKER_01: Uh I you know, I've got some qualifications, but uh you know, just basic box standard stuff, no you no degree.
17:14
SPEAKER_01: So the banking job came up, and I thought, yeah, a career in banking would, you know, I like numbers, I like that kind of uh that quite technical approach, but I really, really enjoy doing the right thing for clients.
17:25
SPEAKER_01: So it was it seemed like a good way of I suppose helping people, but also um doing something that was quite technical as well, and that really appealed to me.
17:35
SPEAKER_01: So I got into First Direct, got a job as a um, I think I was in lending at the time, and um yeah, started on that road, did a few jobs with First Direct, spent about seven years there, and then went off and um became a financial advisor in 2000 working for Santander.
17:55
SPEAKER_01: So when I was with Santander, very salesy, I'd just come through a management buyout, I think it was Avi at the time, and um I hated it, absolutely hated it.
18:03
SPEAKER_01: It was absolutely contrary to what we'd learn at First Direct.
18:06
SPEAKER_01: You know, for me it's all about service and building relationships with clients and um the financial advice approach in 2000, so 20 years ago, totally different to where we are today.
18:18
SPEAKER_01: It was all about sales targets.
18:21
SPEAKER_01: So um I left, I hated it, and I swore I'd never get back into financial advice.
18:26
SPEAKER_01: So I went off and did other things.
18:27
SPEAKER_01: I did up properties and uh with the family and various other bits and pieces, worked for another finance company, and then in 2005, I went back into financial advice and decided that actually for me, I wasn't prepared to turn my back on everything I'd worked for.
18:41
SPEAKER_01: I got all my qualifications, and I recognized that there was a model out there for me, which would be an independent, um, technical, bespoke financial advice practice that would enable me to provide that personal service, great performance, and actually help people.
19:01
SPEAKER_01: So that's what I aimed to do.
19:03
SPEAKER_01: So I got back into employment.
19:04
SPEAKER_01: Uh I worked for Barclays, first of all, uh as a mortgage advisor, and then paid for all my own qualifications, did it in my own time, um, recognizing that I would need to do that to be able to then get a job as a financial advisor again, because this is five years after I'd first taken my qualifications.
19:19
SPEAKER_01: And then once I'd got a good sales record again with uh with in it with a bank, I then got the job with Halifax, became a financial advisor with Halifax, had to take all my exams again, which was a bit of a pain, but hey ho.
19:31
SPEAKER_01: So um went through all my exams again and then spent a few years with Halifax.
19:37
SPEAKER_01: And funnily enough, just as I got through kind of those initial couple of years of getting on my feet, we went into the financial crisis.
19:46
SPEAKER_01: So it was kind of baptism of fire, you know.
19:49
SPEAKER_01: Um in fact, it was 12 months after I hit the ground running, you know.
19:53
SPEAKER_01: So I I joined the Halifax in 2007, and I remember going to a conference there, which was at the NEC, and it was full.
20:00
SPEAKER_01: It was the sorry, not the NEC, it was the conference center on Broad Street in Birmingham.
20:06
SPEAKER_01: And so if you've ever been there, the uh the main atrium is you can probably get about 3,000 people in this room.
20:12
SPEAKER_01: Um and it's all tiered and it's a great big place.
20:15
SPEAKER_01: And they had guest speakers on from uh Richard Hammond was there, and and you know, it typical kind of typical kind of Americanized um, you know, let's big them up, let's let's motivate these guys kind of conference.
20:27
SPEAKER_01: And I was there at the time when the financial advice sector was generating the biggest amount of profit to the Lloyd's group, and we were on a high.
20:37
SPEAKER_01: You know, as an industry, we were on a high.
20:38
SPEAKER_01: We were making huge amounts of money, investments were at an all-time high back end of 2007, and then literally within a month or two, uh, it all hit the fan.
20:48
SPEAKER_01: And we were then looking at Bradford of Bingley going bust, Lehman Brothers going bust, uh, the financial crisis, the market crashed, and the rest, of course, is history.
20:57
SPEAKER_01: So at the end of the financial crisis, and having got through all these years of pretty much clients turning their back on financial services through mistrust, mistrust of the banks.
21:09
SPEAKER_01: Um, I got a bit sick of it, to be honest.
21:11
SPEAKER_01: I got a bit sick of being told by managers to sell products to clients who were concerned they were about to lose everything they had.
21:18
SPEAKER_01: Um, you know, I was more about reassuring them during a bad period and then retaining that relationship for when things got better.
21:24
SPEAKER_01: The bank was all about let's sell things because actually we need to get our balance book up.
21:29
SPEAKER_01: Um, and there was a complete contrast, there was a complete conflict of interest.
21:33
SPEAKER_01: To me, sales and advice really don't go together.
21:35
SPEAKER_01: You need to maintain momentum, but that momentum should be based on an underpin of good service and relationship building, which is what you referred to earlier.
21:43
SPEAKER_01: So I left 2011.
21:44
SPEAKER_01: I picked myself up and left.
21:46
SPEAKER_01: And at the time, you know, I was I was off with stress, I had sales targets coming out my ears, and I just said, look, enough is enough.
21:55
SPEAKER_01: You know, you guys are going in one direction, and I'm absolutely against that.
21:59
SPEAKER_01: So I left.
22:00
SPEAKER_01: Went on on my own, went independent, joined Honister.
22:03
SPEAKER_01: Fantastic.
22:04
SPEAKER_01: I had six months of really good training with them.
22:07
SPEAKER_01: They were an independent network, so they the restrictive model wasn't around at the time.
22:12
SPEAKER_01: They were just independent.
22:13
SPEAKER_01: They had about 1200 advisors, but they were very, very top-heavy in terms of compliance, management.
22:19
SPEAKER_01: Technology wasn't what it is now, so they had lots of staff all over the country.
22:24
SPEAKER_01: And we were six months, we're sorry, we were a year ahead of RDR.
22:27
SPEAKER_01: And unfortunately, they just did not adapt to RDR the way they should have done.
22:32
SPEAKER_01: And they also were carrying a legacy of bad advice.
22:35
SPEAKER_01: So when their PI insurance came up for renewal at uh June 2012, they couldn't get the renewal, and as a result, they went into administration.
22:44
SPEAKER_01: So I'd only be going a year at this point.
22:47
SPEAKER_01: So suddenly I was deauthorized.
22:49
SPEAKER_01: I had, I can't remember how much it was, maybe around£40,000 that was owed to me in commissions and fees.
22:57
SPEAKER_01: That suddenly vanished.
22:59
SPEAKER_01: I had to put my, you know, I don't mind saying financially, you know, at that point, that was my tax bill, that was paying for my mortgage for the next few months.
23:07
SPEAKER_01: That was going to get me over Christmas.
23:09
SPEAKER_01: All went.
23:10
SPEAKER_01: So I had to put my mortgage on the back foot.
23:12
SPEAKER_01: I had to speak to the tax office, I had to speak to the FCA and say, look, guys, you know, I'm a I've gone in this for the long term, I'm qualified and professional, got a great client bank, but you know, financially, right now they've they've gone into administration.
23:25
SPEAKER_01: I'm not reauthorized yet.
23:27
SPEAKER_01: Uh it took me six months to get reauthorized.
23:29
SPEAKER_01: So my clients stood by me and so on, but it was really painful.
23:33
SPEAKER_01: And then after that point, I got reauthorized with another network, and that was True Potential.
23:37
SPEAKER_01: The reason I went with TP was their technology is fantastic, really, really good.
23:43
SPEAKER_01: And uh the support they gave me during that period spot on.
23:47
SPEAKER_01: And um, yeah, I I was uh I was a registered individual, which is basically um a basically you're in it at the time I was an independent as I am now, I was independent but under their network, so I use their business cards, uh they paid for PI insurance and regulatory stuff, and they take some of the heavy lifting off if you're just a single advisor.
24:08
SPEAKER_01: So in the early days they were great, and they gave me access to that platform and so on.
24:12
SPEAKER_01: But as things progressed, I recognized that actually a lot of my clients, you know, I I've always self-built my portfolios, so I didn't like the restrictive way it worked.
24:21
SPEAKER_01: And after a number of years, they decided to go down the restricted route.
24:25
SPEAKER_01: I wanted to stay independent, so in 2007 I went DA and decided to trade under my own brand, and that was you know three or four years ago, and I haven't looked back.
24:35
SPEAKER_01: It's been uh it's been great.
24:36
SPEAKER_01: We've now got a you know, I've over the last eight years I've gradually um developed my team, I've taken on more staff, and we've got to a point now where we've got three, you know, really uh experienced ladies.
24:48
SPEAKER_01: Uh two of them have been in the industry for 25 years each.
24:51
SPEAKER_01: So I've been in about 27 years, they've been in 25 years each.
24:55
SPEAKER_01: So between the three of us, we've got you know in excess of 70 or 80 years experience.
24:59
SPEAKER_01: Um, and then we've just taken on another lady as another administrator.
25:03
SPEAKER_01: So yeah, we're we're now nicely positioned, but uh it's been quite a long and rocky road, as you can appreciate.
25:10
SPEAKER_00: Okay, no, thank you so much for that overview.
25:12
SPEAKER_00: Very um, very good.
25:14
SPEAKER_00: Um, Sam Sam, just one thing.
25:18
SPEAKER_01: With me saying it's been a rocky road, the one thing I would say is that it's been up and down, but all of those experiences, whether they're good or bad or indifferent, every single one has got me where I am today.
25:28
SPEAKER_01: And the one thing I would say is that by almost kind of breaking early on, you know, almost seeing the structure around me collapse and then network going to administration, it it it what it's done, it's made me really, really uh resourceful and flexible, and also look forward as well.
25:46
SPEAKER_01: So I'm always looking at contingencies, I'm always looking at having a plan B in place.
25:51
SPEAKER_01: Um I think that's one of the key things about being an advisor.
25:55
SPEAKER_01: You've got to make sure that you're flexible, you're forward-thinking, you're resourceful because things can change.
26:00
SPEAKER_01: The industry can change, the network can change that you're associated with technology, changes, your client needs will change.
26:07
SPEAKER_01: It's a constant, the one thing that never changes is the incredible rate of change in this industry.
26:12
SPEAKER_01: You've got to be comfortable with that, I think.
26:14
SPEAKER_00: And what do you think is the biggest change that's happened to financial planning over, say, the last year?
26:21
SPEAKER_01: Over the last 12 months, I would say um I think it's the way we deliver our services.
26:29
SPEAKER_01: I think for me, when you asked me the COVID question, one of the big things in the short term was that we had to take the guys who were in the office and we had to then make them home-based.
26:40
SPEAKER_01: So, luckily, I've already got one my paraplanners remote anyway.
26:44
SPEAKER_01: So, when I say remote, she generally spends a day in the office and a couple of days at home.
26:49
SPEAKER_01: Uh she did she used to do 20 hours a week, she now does 25 hours.
26:53
SPEAKER_01: So, pretty much she I've already set up an office suite in her house.
26:57
SPEAKER_01: I've already got an office suite in my house.
26:59
SPEAKER_01: All we needed to do is get my key, um, my key secretary or uh PA to take the computer equipment and the server and the uh the printer, stick it in her house for three months, and we were we were ready to go.
27:12
SPEAKER_01: So, pretty much we didn't really, we were at full chat for the whole of COVID.
27:17
SPEAKER_01: We didn't really miss a beat.
27:18
SPEAKER_01: Um, we were one man down, so the other two people, because she was on furlough, um, unfortunately, she joined us on the 2nd of March, so she wasn't covered by the government scheme.
27:29
SPEAKER_01: Um, but she was too young in her, too early in the relationship in the in the uh training to be able to give her any work, so she was just at home.
27:38
SPEAKER_01: Um the other two picked it up, they were doing overtime, and so it's a bit of a financial strain in that short term period of three months.
27:45
SPEAKER_01: You know, I was having to keep one person on full-time, uh, but actually she wasn't adding any value, and the other two were having to get overtime.
27:52
SPEAKER_01: Our turnover drops slightly.
27:54
SPEAKER_01: Um but the reality is that our investment structure, which is very much forward thinking, um is has seen gains this year, which has been fantastic considering the market's almost 20% down.
28:08
SPEAKER_01: So we've we've we've got through, I think, the worst of it so far.
28:11
SPEAKER_01: You know, the big the big thing on the horizon is going to be obviously the short-term problems around COVID and Trump over the next six to twelve months.
28:19
SPEAKER_01: But no, in in that respect, um, over the last 12 months, I think it's just the way we deliver our services.
28:26
SPEAKER_01: It's been more remote and more um uh it's been more efficient.
28:30
SPEAKER_01: And actually, one thing I would say is it's given me more time to spend in the office, speaking to fund managers, um, analyzing the investments, and actually that's where the investment growth has come from.
28:40
SPEAKER_01: I'm more productive as a result.
28:42
SPEAKER_01: I'm not spending three hours a day on the motorway, and that's got to be better for clients.
28:46
SPEAKER_00: And that's what I'm hearing the most is this time wasted previously in cars or you know, in meetings, just pointless meetings and in being car travelling to and from clients, and it's such a huge waste of time.
29:03
SPEAKER_00: And I think everybody's seeing that post-COVID.
29:06
SPEAKER_01: They're seeing the Yeah, I wouldn't agree that the meetings were pointless because I'm still doing an hour, two-hour appointments.
29:12
SPEAKER_01: So the meetings themselves are still the same length, and actually the face-to-face meetings probably did more to cement that relationship with new clients earlier.
29:22
SPEAKER_01: Um, but the travel time, absolutely, you're you're you're 100% correct.
29:26
SPEAKER_00: I think the pointless meeting, when I mention pointless meetings, not pointless meetings with clients, but pointless meetings with other people, you know, things that would divert your attention, you know.
29:36
SPEAKER_00: Yeah.
29:36
SPEAKER_01: Um and the difference I think the beautiful thing about the only thing I would say though, Sam, in response to that, is are you referring to maybe things like CPD?
29:46
SPEAKER_00: No, I'm thinking more about myself.
29:49
SPEAKER_00: I'm thinking more about people in my business.
29:52
SPEAKER_00: I don't even think about it.
29:53
SPEAKER_01: Come on now, you're only marginally pointless, you're a journalist.
29:55
SPEAKER_01: I mean, come on now.
29:59
SPEAKER_01: So um, so the reality is um you you um you've hit very very much on an area that I think is probably unrecognized during this period, but I think we've can all relate to it.
30:11
SPEAKER_01: Um CPD is a big part of what we do, so we have to do these CPD events, and I think the one disadvantage with being home-based is that there is that lack of physical and um verbal stimulation, you know, you're not meeting people, you're not there's no social side to this kind of thing.
30:26
SPEAKER_01: I mean, obviously, you know, we're in a chuckle now, but actually we can't kind of gather beer afterwards or grab a meal together, and you know, you just there isn't any of that.
30:34
SPEAKER_01: Whereas the CPD event did bring that to the table.
30:37
SPEAKER_01: And I think the one thing for me is that whilst we all used to moan about having to spend you know two hours traveling to a CPD event that actually only yielded an hour's worth of CPD or one and a half hours and then an hour and a half to get back again.
30:50
SPEAKER_01: So we spent six hours of our day, we've only got an hour and a half CPD.
30:54
SPEAKER_01: The reality is that the benefit it brings is that it's quite stimulating when you're there.
30:59
SPEAKER_01: So some of these events are pretty good.
31:01
SPEAKER_01: You know, I used to go to um some of the uh uh ETF.com ran an event which was very uh very informative.
31:08
SPEAKER_01: Um we I used to go to the events um by professional advisors, by portfolio manager.
31:15
SPEAKER_01: Um they were very good as well.
31:17
SPEAKER_01: You used to get to meet the fund managers, drill them down, and so on and so forth.
31:21
SPEAKER_01: You know, you'd you'd be sat at lunch with a fund manager on your left from Jupiter, a guy from Brewing on the right, and you'd just be chewing the code and comparing strategies, and it's those kind of little times that add the value that you can't really relate to now.
31:36
SPEAKER_01: And the one thing that it's doing, it's turning me off CPD because the thought of having to spend yet another two hours in front of a sodding computer kind of makes me feel quite uneasy.
31:48
SPEAKER_01: You know, it I love you know, it it's not as stimulating as moving around a location, you know, you're in a hotel, you've got different uh you know, bounce-off rooms where you can kind of break out breakout uh sessions, there's a bit of lunch, you're kind of doing stuff over a day and it you're interested.
32:06
SPEAKER_01: Whereas now it's all on the computer, it's really quite grueling.
32:10
SPEAKER_01: And I think you get almost you get zoom uh blindness, if that makes sense.
32:14
SPEAKER_01: You know, you it just kind of goes in one ear and out the other.
32:16
SPEAKER_01: I think that's the danger with this kind of remote, remote world.
32:19
SPEAKER_00: So you can't do it all, yeah.
32:20
SPEAKER_00: You you can't do it all the time.
32:22
SPEAKER_00: You need to break it up, and fingers crossed we'll go back to some form of new normality in the future.
32:27
SPEAKER_00: Because um, but I think we'll be more we'll we'll pick our time.
32:31
SPEAKER_00: We'll say, like, well, there's no point in me traveling all that way.
32:33
SPEAKER_00: I could maybe how about if I pick up the, you know, let's jump on a Zoom meeting first and have a conversation instead of a first meeting face to face, because in the back of your mind, you're thinking, I've got to go and see this guy face to face because that's what I've been taught to do, and that's what builds relationships.
32:44
SPEAKER_00: Whereas actually jumping on a Zoom meeting for 15 minutes, you might have an amazing conversation.
32:48
SPEAKER_00: That guy saves time, you save time, and you can crack on with the work.
32:51
SPEAKER_00: So I think from a prospecting perspective and a client generation perspective, I think it helps in the early stages of building the relationships as you've experienced.
33:00
SPEAKER_00: And um, I think it will certainly sort of aid in any kind of new advisors wanting to generate clients, you know, um, and build relationships quicker.
33:09
SPEAKER_00: Um, on that note, you're obviously a directly authorized business here, and you know, you you've you've made it very sort of of clear as well that you've grown through acquisition.
33:17
SPEAKER_00: So I've had nobody on the podcast actually who has that I'm aware of anyway, that has um uh grown through acquisition.
33:25
SPEAKER_00: I've never asked any of those questions.
33:27
SPEAKER_00: So I I previously I um I set up Gunnar ⁇ Co.
33:31
SPEAKER_00: which was an IFA acquisition business.
33:33
SPEAKER_00: So I've got a uh you know a bit of experience around talking to you know vendors and clients that are looking to sell and buy.
33:42
SPEAKER_00: Um so I'd love to hear your experience, and I think it would be very valuable to other financial planners who are thinking about growing and have thought about acquisition, but it's quite overwhelming.
33:53
SPEAKER_00: Um, so love to hear your experience.
33:56
SPEAKER_00: So, first off, around the acquisitions, how do you go about finding somebody who's looking to sell their business?
34:06
SPEAKER_01: Yeah, so um, before I answer that question, I'm just gonna kind of respond to the one question that came up or the one point that came up in my mind, which is why would you want to acquire?
34:16
SPEAKER_01: Why is there a need?
34:18
SPEAKER_01: Because that's probably, you know, if somebody's new to the industry, um, they're getting some experience, they're maybe they've got a choice.
34:25
SPEAKER_01: They either grow in a they join an existing firm uh and maybe deal with leads coming in from there, or they decide that they're stepping off with maybe a few clients or family and friends that they can uh they can confidently manage, and they think they've got enough behind them to organically grow.
34:42
SPEAKER_01: You know, they're gonna fund the first 12 months and maybe organically grow.
34:45
SPEAKER_01: The reality is that that's certainly one option.
34:48
SPEAKER_01: Organic growth or joining another practice, that's certainly one option.
34:52
SPEAKER_01: And there's a lot of firms out there right now with the lack of uh, well, they they basically they don't have a retirement plan, so you know they may think, okay, well, we're really busy right now, we're buoyant, we could do with some staff on board, and maybe one day, ah, they might buy the business off me.
35:09
SPEAKER_01: So that's one option.
35:10
SPEAKER_01: But the one reason that I decided to acquire was I was working um alongside some other advisors and actually could see the benefit of acquiring.
35:22
SPEAKER_01: And the reason I say that is because if you're growing organically, you've got a website, people ring you up and say, Hi, got a pension, I'd really like some advice.
35:32
SPEAKER_01: I've got a question.
35:33
SPEAKER_01: What you're trying to do is there's a number of different obstacles to go over.
35:38
SPEAKER_01: First of all, they've probably never dealt with a financial advisor before, because if they had, they probably would ring them first.
35:43
SPEAKER_01: Um, so they may be quite suspicious of the industry.
35:47
SPEAKER_01: They've probably done some work on the on the internet, so they're probably aware that there will be fees.
35:52
SPEAKER_01: Um, and and they tend to shop around as well.
35:55
SPEAKER_01: They're quite fees out.
35:56
SPEAKER_01: They you know the impression on the internet is don't get ripped off.
35:59
SPEAKER_01: You know, let's you know, let's drill down on the fees, um, find someone that's good, but actually, you know, you want to be looking at you know getting the fees down as low as possible as well.
36:08
SPEAKER_01: Um, don't go active, go passive because it's cheaper, all this kind of stuff.
36:12
SPEAKER_01: It's very much driven by no disrespect to journalists, but it's very much driven by what will sell newspapers or sell press.
36:18
SPEAKER_01: And and it's kind of the the current theme is all about saving money.
36:21
SPEAKER_01: The reality is that that's not the that's not the place where um where everybody is.
36:28
SPEAKER_01: You know, some people, yes, they buy on price, a lot of people buy on quality, a lot of people buy in relationships, and it depends on the solution as well at the other end.
36:36
SPEAKER_01: You know, some people buy on on in terms of uh qualifications.
36:40
SPEAKER_01: Are you chartered, are you independent, so on.
36:42
SPEAKER_01: So there's a lot of barriers to get over before you even get to the point where they'll agree to a first appointment.
36:47
SPEAKER_01: Then when you go to the first appointment, it's very likely that you're gonna have to put a recommendation together before they'll get to the point of actually committing to making a decision over whether they want to use you.
36:59
SPEAKER_01: And what you then have the danger of is you either say, okay, well, I want to charge you a fee before I put together this recommendation, in which case they could say, Well, forget it, or you say, Okay, well, I'll take a punt and put it all together in my time and then present it on the basis that I'm pretty sure they're going to become a client, and then they say thanks very much, but actually leave it with me, and then they never become a client anyway.
37:21
SPEAKER_01: So, what I decided to do was buy client banks because what that gave me, having worked in the bank and tried to convert clients who were cash-based into investments and know how difficult that can be.
37:32
SPEAKER_01: What I wanted to do was deal with clients who had a reason to see it.
37:36
SPEAKER_01: And what I found that by buying a client bank that was maybe neglected, um, uh, whether it's active clients or uh neglected clients or a combination of the two, what it meant was that you're buying clients who have an existing relationship with the financial advice industry.
37:52
SPEAKER_01: So they're not inherently suspicious.
37:54
SPEAKER_01: They they they've they've seen the benefits in the past, they have investments, and so there's a reason for you to go around and see them.
38:00
SPEAKER_01: And all you're doing in those early stages is really just establishing is establishing a relationship.
38:04
SPEAKER_01: You know, let's get some trust going, let's get some dialogue.
38:06
SPEAKER_01: But it's much easier to arrange that kind of initial meeting without risk to you as an advisor than if you were just going in and trying to pitch to the family from scratch.
38:18
SPEAKER_01: So for me, it was a much more efficient use of my time and resources, and that's why I went down the acquisition route.
38:24
SPEAKER_01: Now, in answer to your question about how you would acquire, um, you would, if you're going into the industry from scratch, and funnily enough, I was speaking to my business account manager from my bank yesterday, he's qualifying at the moment to be level four, and he's going through his R01s, and he basically asked me the same question.
38:43
SPEAKER_01: And um, we had a very similar conversation that I'm having with you now, with him yesterday.
38:48
SPEAKER_01: Um what I said to him was that um one of the best ways for an advisor to get on, um, in my opinion, if it is um either through a network, so someone like if they're if they're happy to be so, in my opinion, people who go down the restricted route tend to be um people who want to uh maybe not have the regulatory burdens that you would have if you went down the DA independent route.
39:16
SPEAKER_01: Um that's one of the big attractions, and if I ever went down the restricted route, that would be the only reason, really, uh, because it does make it far more uh it's a it's a far more inclusive environment.
39:28
SPEAKER_01: Um the problem for me is that I I hold on to my independence quite dearly.
39:34
SPEAKER_01: It means something to me, and to be able to say to a client, my only loyalty is to you, not to any other company out there, um, is it I found it a real strength, a real asset in my career.
39:45
SPEAKER_01: Um, but in answer to your question, if I was coming in and I've got my qualifications, you've really got a couple of routes.
39:51
SPEAKER_01: If you want to be independent, my suggestion would be go down and get yourself in with a firm that wants to mentor somebody.
39:57
SPEAKER_01: So they've probably got leads of their own, or they'll give you a small client bank.
40:00
SPEAKER_01: And there's a plenty of firms out there at the moment who are looking for level four qualified people who maybe don't have a great deal of experience, but they want to take on, mold into their own kind of uh way of working, they'll give you support, administration support, but you're independent, you're learning really at the best place.
40:16
SPEAKER_01: Probably a DA firm, they've got their own procedures, they build their own portfolios, and you you're really learning at the you know you're learning at the in my opinion the best way from day one.
40:27
SPEAKER_01: The other way is to go down the restricted route, and there's nothing wrong with that, it just means it's a different approach.
40:32
SPEAKER_01: And I would say it's a little bit more salesy, only because, from my own experience, um they the restricted networks tend to have business thresholds that they were expect you to meet.
40:43
SPEAKER_01: Um, and and that's you know, I'm not particularly aiming that in any direction because there's a number of different uh there's a number of different restricted, uh big restricted networks out there like Quilter, SJP, and uh True Potential, but pretty much they tend to expect you to put through certain amounts of business a year.
41:03
SPEAKER_01: That's just from my experience.
41:04
SPEAKER_01: Things may have changed, but that's just generally my experience.
41:07
SPEAKER_01: And I didn't feel comfortable with that route.
41:09
SPEAKER_01: So I I tended to go down the independent route.
41:12
SPEAKER_01: Um, but if you go down the restricted routes, what they have, and this may be attractive to people, is that they then give you the chance um of um using their model and then effectively buying practices off retiring IFF or retiring restricted advisors within the network.
41:30
SPEAKER_01: So there's this continuation of relationship and business, and they're very canny in that they recognize a long time ago, um, and SJP were one of the first people to do that, they recognize that if they want to retain assets on their platform, they really need to get these new advisors in to be able to keep the assets on the platform.
41:47
SPEAKER_01: But as as guys retire, they stay with the business, and we just get new blood coming in.
41:51
SPEAKER_01: So SJP have been great in that they've you know they've got academies and quilters are now going down the same road, they've got their own academy.
41:58
SPEAKER_01: True potential are looking into kind of a, I believe, a similar structure.
42:01
SPEAKER_01: They've they're certainly bringing on some of the new blood.
42:04
SPEAKER_01: Um, and and I think that's where the restricted guys really do well.
42:08
SPEAKER_01: You know, they give some of the uh younger, maybe less experienced advisors a kind of a guaranteed route of success.
42:17
SPEAKER_01: I as I say, it's just whether or not you're comfortable going down the restricted route or whether you want to go down the the independent route.
42:23
SPEAKER_01: Uh the independent route tends to be a bit more, I think personally, can tend to be a bit more technical and a bit more uh it gives you a bit more freedom to kind of build your own portfolios.
42:32
SPEAKER_01: Um and and for me anyway, it made sure that I was the master of my own ship really for you know long term.
42:39
SPEAKER_00: Okay.
42:40
SPEAKER_01: The other route, I'll say, sorry, as you get established, and if you have the financing, the other route to go down is go to a broker.
42:47
SPEAKER_01: So like Gunnar and Cope, you're saying that you you're part of.
42:50
SPEAKER_01: Um I went to retiring IFA, which is a big network, a big um you know broker, as you know, uh, and I bought my most recent acquisition from them or through them.
43:00
SPEAKER_01: And that was a guy who was also DA uh and independent.
43:03
SPEAKER_01: He was retiring, he got in touch with them, he put his practice on the books, I got in touch with them and decided to buy through them.
43:10
SPEAKER_00: Okay.
43:11
SPEAKER_00: So let's look at the actual time scales of acquisitions then, because they can take quite a long time for them to complete.
43:18
SPEAKER_00: So, how long from sort of start to finish does it take for you to acquire, say, a retiring client bank or or actually acquire a directly authorized firm, for example?
43:31
SPEAKER_01: Okay, so my first two acquisitions were client banks from an advisor that was working with me in Honister.
43:37
SPEAKER_01: So we knew each other from the old network.
43:39
SPEAKER_01: Uh, a couple of years later, you know, post RDR, he had far too many clients.
43:44
SPEAKER_01: And so the legacy was you know, he wasn't meeting them, he wasn't seeing them, they were neglected effectively.
43:49
SPEAKER_01: And so, uh, although there were a few active clients in there, the majority needed help.
43:53
SPEAKER_01: And so I bought a total of 297 households from him over in two tranches.
43:59
SPEAKER_01: Um And in two acquisitions, and effectively over the following five years, I've condensed that down to a client bank of about 100 households.
44:09
SPEAKER_01: In fact, less than that, about 80 households.
44:12
SPEAKER_01: So that's that's really condensing it down.
44:16
SPEAKER_01: But the the acquisition period in that respect was maybe somewhere between, I would say six months, around six months, because you know you kind of identify at the beginning that you want to do it, you then get into conversations.
44:30
SPEAKER_01: He then has to provide uh sufficient data for me to then make a decision.
44:34
SPEAKER_01: We then come to an agreement over cost, we then have to draw up a contract.
44:38
SPEAKER_01: Uh it goes backwards and forwards between us.
44:40
SPEAKER_01: Um he had a draft contract anyway.
44:42
SPEAKER_01: We didn't involve solicitors, we knew each other, we trusted each other.
44:45
SPEAKER_01: And so, from our point of view, that that kind of made sense.
44:48
SPEAKER_01: Um, and that was a fairly slick process.
44:51
SPEAKER_01: Um, but then you move forward into the uh the next uh stage, which is me buying a DA firm, um, lock stock and barrel.
44:59
SPEAKER_01: So I bought the all the company shares and bought the company.
45:03
SPEAKER_01: Um, they they didn't have, I mean, he didn't have an active office, he did have one, but he closed it down, didn't have any staff, didn't have any any debts or anything like that.
45:11
SPEAKER_01: So it was just a case of buying the firm, the brand, taking on board the clients.
45:15
SPEAKER_01: Um from meeting him, we met in June of last year and we completed the legals.
45:20
SPEAKER_01: We were told by the retiring FA it would take three months.
45:23
SPEAKER_01: The reality was that it we didn't complete until February the following year.
45:27
SPEAKER_01: So it took us about uh seven or eight months.
45:30
SPEAKER_00: Yeah, that's the thing, it can take some time, can't it, to uh to acquire a business.
45:35
SPEAKER_00: Um you mentioned there about looking over some of the um, you know, some of the data and some of the files about that business to I assume do your due diligence as to whether or not it's worthwhile buying.
45:49
SPEAKER_00: So as a small business, were you conducting that due diligence yourself or did you uh get support outside of it?
45:57
SPEAKER_00: Did retiring IFA help you with that?
46:00
SPEAKER_00: Because uh doing due diligence on somebody else's business is quite a quite a risky thing, isn't it?
46:07
SPEAKER_01: It is, yeah.
46:08
SPEAKER_01: I mean, the data that was provided to me um is always subject to the person who's providing it.
46:16
SPEAKER_01: And the problem is that they may use different systems, IT systems, to the ones that you use.
46:21
SPEAKER_01: So I'm you know, we we tend to use, you know, uh Excel spreadsheets, we tend to use formulas, um, probably like most people, uh, we we we we we use a client management system which is provided by True Potential, um, and we buy that in as a DA firm, but their software is very good, and that enables us to provide a lot of information on the clients and the business we run, uh, which is great.
46:46
SPEAKER_01: The problem is that when you're buying a business, you're then subject to what systems they use.
46:51
SPEAKER_01: So you ask for the information, but if they use a different client management system, and and and and certainly the gentleman did, then it can be quite difficult to get the information you need.
47:03
SPEAKER_01: So, yeah, you're absolutely right.
47:05
SPEAKER_01: You can get a degree of information, uh, and I did, and certainly retiring AFA in the early stages, they give you kind of a summary.
47:12
SPEAKER_01: So they they gather some information, they give you a summary, and that's fine, gives you an idea of whether the financials will work.
47:18
SPEAKER_01: But then the next stage is the in-depth due diligence, so that's when you start drilling down.
47:23
SPEAKER_01: So we get the guy to come over and spend a day with us so that he gets an idea of whether our business is a good fit for his clients, and also we then spend time with him, so we you know we get to an idea of whether his clients are going to be a good fit for our business and whether there's any legacy um bad advice, for example.
47:40
SPEAKER_01: That's what you're really looking for.
47:42
SPEAKER_01: Um, and we uh retiring FA put me in touch with uh uh an audit, uh, a compliance consultant, and we got them out to uh and she was great, uh, and and we got her out to the practice.
47:55
SPEAKER_01: She spent a day, cost me, I can't remember how much it was now, but let's say 750 quid, and she spent the day just going through everything.
48:01
SPEAKER_01: And she came back to me with, yeah, it it you know the data's not in the same format that we would expect, um, maybe the way that we work, um, but actually the reality is that everything is in place, there's no bad advice, and it's good to go.
48:14
SPEAKER_01: That was my gut feeling from day one.
48:16
SPEAKER_01: And the funny thing is, when I met the guy in June last year, I then spent about three months then going off and looking at other options before we started the legal process.
48:26
SPEAKER_01: Uh, and I travel all over the country looking for people.
48:29
SPEAKER_01: The reality is that my gut reaction that I had at the time, which is I can deal with this guy, he's got a good sense of humour, he is ethical, he's his values are the same as mine.
48:41
SPEAKER_01: Um, yes, he's retiring, yes, he doesn't have a team behind him, yes, there's holes in you know, his investment process is different to mine, but actually they're all good things because it means we can bring value to the table.
48:54
SPEAKER_01: So um, yes, the actual logistics were quite challenging, but the reality is it's been absolutely the right thing to do.
49:01
SPEAKER_00: Throughout my career, I've spoken to many financial advisors who actually really struggled to acquire, they found it difficult to either find somebody that's looking to sell their client book or build a strong enough relationship with that person that I guess that the the the the person who's selling the business could trust that advisor would actually look after their clients.
49:26
SPEAKER_00: And a big thing, whenever I approach somebody who was thinking about selling their business, one of the major concerns was actually sometimes, and I used to kind of gauge how ethical the person would be, actually, it was usually in the beginning, it was like, Well, these are my friends, some of these clients.
49:43
SPEAKER_00: I need to make sure that who I'm selling it to, this client book, are gonna look after my clients.
49:48
SPEAKER_00: And that used to come before how much money am I gonna make, you know?
49:53
SPEAKER_00: Absolutely.
49:54
SPEAKER_00: Um, do you think some advisors struggle to acquire because they aren't building a you know, what advice would you give to an advisor who is thinking of acquiring clients from a retiring IFA?
50:08
SPEAKER_00: What what what do you what advice would you give them?
50:10
SPEAKER_00: How best to approach the person selling their clients?
50:15
SPEAKER_01: Yeah, I think I think the reality is that um number one, make sure that you are confident in your own business.
50:22
SPEAKER_01: So make sure that you are on top of your own data.
50:25
SPEAKER_01: There's no good going into somebody else's business, because it's you've got to bear in mind it's not a case of you just saying, well, I'm in control because I'm buying.
50:32
SPEAKER_01: That's that's that's not the way to look at it.
50:34
SPEAKER_01: What you're actually doing is you're going into someone's office, home, wherever it might be, and you're saying to them, everything you've worked for over the last 20 years, I'm about to buy off you, but I'm I'm giving because it's quite an emotional process selling a business in the IFA because you have you've seen the clients, you've seen the families, you've seen births and deaths, you've been to their funerals, you've been to the weddings.
50:57
SPEAKER_01: It's a very, very emotional process.
51:00
SPEAKER_01: So you you want to trust the guy who's coming in to speak to you, or the lady who's coming in to speak to you.
51:04
SPEAKER_01: So you have to make sure that you are A, transparent, you are B on top of your data, so you can confidently in a conversation say, Yeah, uh, we've been going for 10 years, uh, we manage around 43 million, we build our own portfolios, we're independent.
51:19
SPEAKER_01: You kind of need to know the USP for your business.
51:22
SPEAKER_01: And then you also need to get across your values, because whilst you can't really get that across in kind of an IFA email, you know, it's all about data and you know the the the uh the the the uh the the kind of the the logistical finances is it a good deal, is it not?
51:41
SPEAKER_01: That's nothing to do with values, but the person who's selling is really only going to trust you when they know where your values come from.
51:47
SPEAKER_01: So I think it's really important that while you're going in there to actually buy their business, you're also going in there to sell yourself and sell your business process.
51:56
SPEAKER_01: How much how will you care for those clients?
51:59
SPEAKER_01: Have you got the staff in place to be able to take on board?
52:02
SPEAKER_01: The other thing, as well, is you need to make sure, and this is one thing that the gentleman who I bought off said that um that gave him confidence in what we do, was the fact that we'd done it before, which I know would be difficult for someone doing it the first time, but he he recognized that I had an understanding of the process.
52:21
SPEAKER_01: So that was important for him because it meant that actually, when he came over to see me and my three staff, we were all already in our the back of our mind, we've already got a process in place.
52:32
SPEAKER_01: So I thought, okay, number one, after the acquisition, we're gonna write to everybody with a joint letter, tell them what's happening, and preempt the next stage, which is introductory phone calls.
52:43
SPEAKER_01: And we're gonna gradually kind of slowly, slowly move the clients into and migrate through a migration period so they're never feeling isolated, they're never feeling orphaned, they're great.
52:55
SPEAKER_01: They're kind of almost thinking that they're appreciating the time that we've both spent on this, that it's got to work from both points of view, and it's really important that the existing advisor gets across that they trust me as the new advisor because he's spent so much time looking at my business as much as I've spent time looking at his business.
53:14
SPEAKER_01: So it's it's a two-way street.
53:16
SPEAKER_01: Regular communication, you know, it's all about trust.
53:19
SPEAKER_01: Don't go in there with like a bully in a China shop, get that relationship, and then you can start to do changes and things to make things more efficient if you need to.
53:27
SPEAKER_01: But um, that's what the one thing I would say, you know, as a new advisor buying a client bank from day one, they've even if they haven't done it before, they need to get across to the advisor who's selling the fact that they've got the resources in place and the structure and an understanding of what's gonna be needed to be able to let that advisor who's retiring go into a retirement confidently.
53:48
SPEAKER_01: They don't want problems.
53:50
SPEAKER_01: That guy's gonna sell, and then he's gonna want to then effectively do a few meetings and then he wants to get his money and disappear into the sunset without getting calls every two minutes saying this new advisor's rubbish.
54:02
SPEAKER_00: What about things like liability?
54:05
SPEAKER_00: Let's say, for example, the advisor you're the vendor, you know, the person you're buying from.
54:11
SPEAKER_00: The vendor, yeah.
54:12
SPEAKER_00: So the person you're the person you're buying from, let's say they've given some dodgy advice in the past.
54:18
SPEAKER_00: When they sell that business to you, do you take on the legacy complaints or dodgy advice?
54:25
SPEAKER_00: Or how does that work?
54:26
SPEAKER_00: Who's then responsible?
54:27
SPEAKER_00: He goes off into the sunset with a load of money and you're left with a load of complaints.
54:32
SPEAKER_00: Does it yeah is that how it works?
54:34
SPEAKER_01: It 100%.
54:35
SPEAKER_01: Yeah, you buy the liabilities of the firm.
54:37
SPEAKER_01: So effectively, uh any advice that's uh so you need to you need to be aware of uh what kind of legacy business they've done.
54:43
SPEAKER_01: A big part of that now is DB schemes.
54:45
SPEAKER_01: So if you're buying a business and it has DB scheme, legacy business uh advice, you want to know has there has there been any uh well you need to know when it is and so on and so forth.
54:55
SPEAKER_01: Um couple of things to bear in mind if there have been legacy uh legacy uh DB scheme advice uh situations, it'll massively increase the size of uh any PI insurance in that company.
55:09
SPEAKER_01: Um the second thing to bear in mind is are you actually going to keep that brand going long term?
55:15
SPEAKER_01: So you might want to keep that brand going in the short term so that you can contact the clients, you've got data protection permissions to be able to do that, uh, and you've still got that income coming in.
55:26
SPEAKER_01: But effectively, what I did was I recognized early on that because there were legacy DB liabilities, that the PI insurance would increase massively at the end of this year or at the end of the business year.
55:39
SPEAKER_01: So I decided that there was no point in running two brands.
55:42
SPEAKER_01: I've already got a well-established IFA firm, and I wanted to bring those clients under my umbrella.
55:48
SPEAKER_01: I didn't want to run two firms because you've got two sets of fees and so on.
55:52
SPEAKER_01: So what I did was I gradually moved those clients across into the new firm, and we then uh after about six months, we've closed the old brand down, and that's done two things.
56:03
SPEAKER_01: Number one, it's meant that, and we've written to our clients and so on as a result, but um I mean it's all been you know regular communication with the FCA, with the clients, everyone was aware of what's happening.
56:14
SPEAKER_01: Um, and I think because of COVID, we also tried to get across the fact that logistically we just can't keep two offices going, it just doesn't make sense.
56:22
SPEAKER_01: But um, and the clients are fine, they understand that.
56:24
SPEAKER_01: You know, that the fact that they've still got advice is the main thing, um, and we're regularly communicating, there's a reason to do it.
56:30
SPEAKER_01: But the reality is that those legacy liabilities would have cost me a fortune going forwards, and it doesn't make sense to keep those two brands open, so we shut it down, and now those legacies are gone.
56:40
SPEAKER_01: So I don't have the legacy of bad advice, not that there was any because there wasn't any bad advice, but I don't have the legacy um or the potential problem of advice pro uh advice issues raising the head in the future.
56:52
SPEAKER_00: Is that because it was linked to the old firm and not to your firm?
56:56
SPEAKER_01: Yes.
56:56
SPEAKER_00: Okay.
56:57
SPEAKER_00: But the clients are still in that you've still got the clients though that have had that advice though, even though they're under your firm.
57:02
SPEAKER_01: Surely there's like a no, so what happens is that the advice is um on the books under the old firm.
57:10
SPEAKER_00: Right.
57:10
SPEAKER_01: If the client decides that actually 10 years ago, the previous advisor did a DB scheme, and that DB scheme advice he now wants the question.
57:20
SPEAKER_01: So at the time of purchase, there weren't any complaints, and he hadn't ever had any complaints.
57:24
SPEAKER_01: That's why I did it.
57:25
SPEAKER_01: Um now we've closed the firm.
57:28
SPEAKER_01: If one of those clients decided to re to complain, that firm is no longer in place.
57:32
SPEAKER_01: So he would have to go to the F FSCS.
57:35
SPEAKER_01: Sorry, he would have to go to the through through the Ombudsman and so on, um, because that firm is no longer in place.
57:41
SPEAKER_01: The reality is um that client is now under a transfer of servicing and being serviced by my firm, which is PGI Financial, and so that firm is now responsible for advice under our banner, but we're not responsible for the advice that was given by the previous advisor 10 years ago.
58:01
SPEAKER_00: Okay, I gotcha.
58:03
SPEAKER_01: So, in a sense, it's a it's a it's a consolidation process, but there is no point in keeping open lots of legacy brands if it's just bringing additional cost and liability to the new firm.
58:15
SPEAKER_01: The reality is that we have a much more efficient process under the new firm, and if the clients are wanting to take advantage of that process and move to the new firm, then we're quite happy for them to do that.
58:26
SPEAKER_01: And then at that point, as I say, we were able to then shut the old brand down.
58:30
SPEAKER_00: When you are looking to acquire a business and a vendor is is is presented to you by the broker.
58:38
SPEAKER_00: Yeah, are you is it similar to buying a house or applying for a job and having competitors also trying to buy that business?
58:48
SPEAKER_00: You know, are you going is it a bit of a beauty parade?
58:50
SPEAKER_00: Are you going up against other people looking to acquire?
58:53
SPEAKER_01: Yeah, yeah, there's uh there's it's all of that.
58:56
SPEAKER_01: Yeah, so you're basically going out.
58:57
SPEAKER_01: Um I went all over the country meeting people uh that were presented to me by a number of brokers.
59:02
SPEAKER_01: I probably met six different potential candidates.
59:05
SPEAKER_01: Uh, and out of those six, um, some of them you because you've got to imagine the the the key factors in in choosing from a buyer's perspective in choosing an ideal client bank.
59:18
SPEAKER_01: Uh one might be location.
59:19
SPEAKER_01: Are you prepared to take clients on all over the country or do you prefer it in one location?
59:24
SPEAKER_01: Um, two is excuse me, the two, the second thing is um assets under management.
59:32
SPEAKER_01: Um, do you want to take on lots and lots of small clients or do you want to take on a few large clients?
59:38
SPEAKER_01: Now, ideally, we all want the few large clients, but the reality is the danger with buying a client bank where you've only got a few large clients is that if one of those or two of those don't come across, that can be a significant um it can be of significant detriment to the deal.
59:57
SPEAKER_01: So, whereas if one or two of the smaller clients don't come across, it's not anywhere, it's not having anywhere near the impact.
1:00:04
SPEAKER_01: So, you you know that these are all the kind of factors.
1:00:06
SPEAKER_01: The other thing, of course, is age.
1:00:08
SPEAKER_01: You're really not going to be taking on a client bank where the majority of people are over 80 because what's the point?
1:00:14
SPEAKER_01: You know, you you're buying it, say, three or four times trail, so you're gonna need to have at least three or four years to be able to glean back the uh money you've invested, and so you know, is it likely if the clients are already over eighty?
1:00:27
SPEAKER_01: So there's a number of factors, and then the final thing, of course, is whether or not there's potential for new business.
1:00:33
SPEAKER_01: So are all the clients active and pretty much at the maximum, you know, have they already retired and they're already at the maximum investment potential now?
1:00:44
SPEAKER_01: Because actually that's not great, because if they're all kind of 65 to 75, in my opinion, they've already probably gone through retirement, made the investment decisions, and now they're in decumulation.
1:00:55
SPEAKER_01: So you can't really bring a lot of new value to the table in terms of new business.
1:00:59
SPEAKER_01: Whereas you get somebody who's in their 40s or 50s considering retirement, there's a lot of additional work that you can do, and then there's potentially that there's that retirement period, which is another potential great new business uh attraction.
1:01:14
SPEAKER_01: So I think it's there's a number of different dynamics, and they'll all depend.
1:01:18
SPEAKER_01: The priority of those dynamics will depend on where you are in terms of your career, your finances, and what you want to achieve, you know, what your business model looks like looks like long term.
1:01:27
SPEAKER_01: Um the final thing is finances, and and that really can vary depending on the deal.
1:01:32
SPEAKER_01: Um, retiring IFA gave me the impression that most deals now are done over a one uh one or two-year period.
1:01:40
SPEAKER_01: Um, some of the other brokers said it was over a two or three-year period.
1:01:44
SPEAKER_01: You know, some of the are looking for 50% up front and 50% after the first year.
1:01:48
SPEAKER_01: Um, others are looking for 50% up front, then maybe 25%, then 25%.
1:01:54
SPEAKER_01: Um the the trail multiple will increase the longer the period.
1:02:01
SPEAKER_01: So if you're looking at something over a very short period, chances are you're giving that retiring IFA the chance of stepping off very quickly, and therefore, generally you want better terms.
1:02:11
SPEAKER_01: So you'll probably give you know somewhere around three 3.2 times trail.
1:02:16
SPEAKER_01: But if they're prepared, if they're wanting to do a deal over three years, then because you because they have to wait for their money, then potentially they want more money out of you.
1:02:27
SPEAKER_01: So they want four or maybe a little bit more, four times trail.
1:02:31
SPEAKER_01: Um, so you know it swings and roundabouts.
1:02:33
SPEAKER_01: Depends on your finances and what's in the background.
1:02:35
SPEAKER_00: I think the finances side is something that can put the same with anything, isn't it?
1:02:40
SPEAKER_00: When you when you're buying anything, you worry about the costs involved.
1:02:43
SPEAKER_00: People think, well, you know, I'll go out on a there's loads of retiring IFAs, I'm just gonna go acquire a load of client banks and uh and build my business that way.
1:02:50
SPEAKER_00: I think um it would be great to understand from you what were the costs involved in acquiring a business or a retiring IFA's client bank.
1:03:01
SPEAKER_00: Could you list or give us an idea of what those costs actually are?
1:03:04
SPEAKER_01: Um yeah, I don't want to be too specific because obviously the guy's just retired, and I think it'd be wrong for to be for me to be too specific.
1:03:11
SPEAKER_01: But the reality is right now that the market works on a basis of trail, uh, so multiples of trail.
1:03:17
SPEAKER_01: So if I was gonna retire tomorrow, then I would, and certainly when I was looking to buy the uh buy the business from the other chap, and also the client banks, you know, the reality is that within the marketplace, I think we we kind of accept that anywhere between three and four times trail is is pretty much where you where you're gonna sit.
1:03:35
SPEAKER_01: And that can vary depending on the terms.
1:03:37
SPEAKER_01: So, you know, as I say, a shorter period would be uh a higher trail, sorry, a lower trail multiple, uh, but a longer period of agreement would probably be a higher trail multiple.
1:03:48
SPEAKER_01: So I paid more, you know, more towards the top end of that trail spectrum, three to four percent, three to four times, uh, on the client banks, and then on the uh on the actual business purchase, uh, although I paid more on the fee-based stuff, uh, then there was some commission-based stuff that was in the background that kind of uh offset it.
1:04:07
SPEAKER_01: So, you know, it it there's a lot more to it than just the the the specific multiple.
1:04:14
SPEAKER_01: It's also there's a lot more in addition to that.
1:04:16
SPEAKER_01: So things like the structure of the trail coming in, is it fee-based, is it commission-based, is it uh post-RDR, and so on and so forth?
1:04:24
SPEAKER_01: Are the clients active?
1:04:25
SPEAKER_01: Are they semi-active and so on?
1:04:26
SPEAKER_00: And what about things like the additional costs that might come up?
1:04:30
SPEAKER_00: You mentioned about um bringing in somebody to do some compliance work for you to look over the book.
1:04:35
SPEAKER_00: Um you obviously are buying the client bank through a broker.
1:04:39
SPEAKER_00: Is there a cost involved in that?
1:04:41
SPEAKER_00: So I just I just can you can you give us an idea of what an overview of the additional costs that might well come?
1:04:47
SPEAKER_01: Yeah, I mean, retiring AFA charged me uh, you know, so let's say the deal um so percentage-wise, I can't quite remember, but I can work it out for you just to give me a rough idea.
1:04:59
SPEAKER_01: Um that would be so I I can't remember whether they charged me five percent.
1:05:16
SPEAKER_01: I'm pretty sure they did, uh, as an initial fee.
1:05:20
SPEAKER_00: Five percent of the sale of the sale value.
1:05:22
SPEAKER_01: Yeah.
1:05:23
SPEAKER_01: And that's a chunk of money, you know, that's a chunk of money.
1:05:26
SPEAKER_01: That is a chunk.
1:05:27
SPEAKER_00: So there's that, and then and when do they expect that?
1:05:29
SPEAKER_00: When when so just to give the I you know, somebody who's thinking about acquiring, when are you expected to pay the brief so just to give you a timetable, roughly, um we start the process, there's no cost.
1:05:40
SPEAKER_01: I think there's a small fee up front, but then effectively, and this is the same with most brokers, maybe a small fee, they'll start to introduce you with people, and you'll you'll sign a uh you'll sign an agreement to say that if they introduce you to somebody and you end up buying their business, then you agree to the big fee.
1:05:56
SPEAKER_01: Um, and that's usually payable on completion.
1:05:58
SPEAKER_01: So that's at the end of the legal.
1:06:00
SPEAKER_01: And when we did it, which was in February of this year.
1:06:03
SPEAKER_01: In addition to that, you've got things like the FCA fee, so the real the change in authorization from the old person onto me, so to put me on as the new director of the new firm.
1:06:16
SPEAKER_01: This is if you're going to do a full share purchase.
1:06:19
SPEAKER_01: The reason people want to do a full share purchase or they want to do that as an exiting IFA is because they can benefit from entrepreneurial relief.
1:06:28
SPEAKER_01: So if I buy their firm, you know, they're taxed at a very much lower rate.
1:06:32
SPEAKER_01: Whereas with the client bank, you're still subject to all the other, you know, the taxation.
1:06:37
SPEAKER_01: So we went down that road.
1:06:39
SPEAKER_01: He wanted to go down the road to get the benefit of the entrepreneurial relief.
1:06:42
SPEAKER_01: We went through the negotiations.
1:06:43
SPEAKER_01: I did the compliance lady, which was let's say a thousand pounds.
1:06:47
SPEAKER_01: We also did the uh the uh FCA fee for the application for me to be the uh the controlling person and change that around.
1:06:56
SPEAKER_01: Um and that was I think somewhere between a thousand and fifteen hundred.
1:06:59
SPEAKER_01: So there's you know a couple of thousand in maybe two, two and a half thousand in professional fees.
1:07:03
SPEAKER_01: Then on top of that, there was my lawyer.
1:07:06
SPEAKER_01: Uh and again, that that might have been say two or three thousand.
1:07:09
SPEAKER_01: So we're already up to uh we're up to about five, five and a half, and then on top of that, there's then the five percent of the deal, uh, which you know, which is a which was a fair chunk.
1:07:21
SPEAKER_01: So if you've got to say is that yeah, your your deal itself is just the start.
1:07:26
SPEAKER_01: Yeah, you have to make sure that when you're thinking about the the funding, your whether it's your bank, family, remortgage, whatever it might be, uh, or in some cases the business that you're buying off might say, Well, I want to continue trading.
1:07:39
SPEAKER_01: We'll let you buy the business or buy this client bank, uh, and actually we'll do it over two or three years or four years, whatever.
1:07:45
SPEAKER_01: Um, I've actually sold a client bank as well over the last three years.
1:07:49
SPEAKER_01: Okay.
1:07:50
SPEAKER_01: So um, you know, I sold a client bank of some of the smaller clients that I'd kept on board and actually had a good relationship with for the last 10 years, it got to the point where I realized that you know, for me to achieve my goal of condensing and getting more efficient with the larger clients, some of the smaller ones I just didn't have time for.
1:08:08
SPEAKER_01: And I don't think that that I couldn't be bothered, it's just that there's only so many hours in the day.
1:08:12
SPEAKER_01: Uh, and I think the reality is you've just got to consider that you know, if you're gonna stay as one advisor and you're gonna have all this support, um with me being a DA firm, there's all this other stuff that you can see, gable reports and you know, investment management and so on.
1:08:28
SPEAKER_01: So you've got to be mindful of that uh and give yourself time to think creatively and work on the other business responsibilities.
1:08:35
SPEAKER_00: So, with those clients, this the smaller clients that that didn't quite fit the model for you as a sole financial advisor to be able to sort of maintain a service to the level that you would like to, and to obviously grow your business the way you want to do it.
1:08:47
SPEAKER_00: Did you think about hiring another financial advisor?
1:08:50
SPEAKER_00: Yeah, or are you you know, are you a one-man band if you like?
1:08:55
SPEAKER_01: Yeah, what's it?
1:08:56
SPEAKER_01: Yeah, I yeah, absolutely.
1:08:57
SPEAKER_01: I did think about hiring another advisor, but for me, I I think the reality is that um I'm I kind of I understand that for me to develop other advisors and get them on board, uh, it would mean to a degree me sitting sat in the office doing compliance checking, checking letters.
1:09:19
SPEAKER_01: Uh, really, it would mean um becoming much more of a an office-based manager than uh a financial advisor.
1:09:29
SPEAKER_01: Um, and I get a lot of pleasure from developing people's finances, taking care of them as they get more vulnerable through their lives and dealing with different aspects of their family, um, and building that relationship with other generations and referrals and so on.
1:09:46
SPEAKER_01: That really keeps me fresh and keeps me going.
1:09:49
SPEAKER_01: I think if I was to become, I think if I was to change my model, and I I've certainly had the option of doing that, and it's not something I wouldn't do, but it's not something I've done up to now, but I I I would certainly then need to be more of a manager, and my my goal would then be on developing the people under me.
1:10:07
SPEAKER_01: So it would be looking on you know new entrants into the industry as colleagues, and then they would maybe look to buy bits of my business later, and so I'd be looking to maybe mentor them in the early stages, and I have considered doing that because I do think we need people in the industry, it's just the time at the moment.
1:10:24
SPEAKER_01: I have enough time on my hands, only just enough, to do this and deal with the clients.
1:10:30
SPEAKER_01: Yeah, so I would need to get people on board who uh to a degree could do the job, you know.
1:10:38
SPEAKER_01: What I'm trying to say is they couldn't be a drain on the business yet because I haven't got spare time to do that.
1:10:43
SPEAKER_00: No, okay, and and I totally understand that, and that's that's the drive and that's the direction you're going as a business, isn't it?
1:10:48
SPEAKER_00: You know, your model your model isn't to grow with loads of financial advisors underneath you.
1:10:52
SPEAKER_00: And as you rightfully pointed out, running a directly authorised firm and hiring financial planners adds a whole new level, not only to managing people, which takes up your time, but also into compliance responsibilities.
1:11:02
SPEAKER_01: And I think that's the big thing.
1:11:04
SPEAKER_01: You know, the compliance side, if I took on two or three advisors, would be massive.
1:11:07
SPEAKER_01: You know, I'm at a point now where you know we've got the enough capital in the business and we've got enough momentum, and I've got a really good investment proposition, and I've got a really good team where we could take on one, two, three advisors nationally and just say, look, guys, we've got the investment structure, we've got the support, we've got the desire, um, and we've got the uh the brand.
1:11:29
SPEAKER_01: Um let's let's support you and let's train you and let's get you out there, you know, extending PGI financial and so on.
1:11:38
SPEAKER_01: I think my one of my concerns is that you kind of spend time building them up and getting to a point, and my big concern would be then that they could then leave the firm, take clients with them, and effectively leave me with a loss in terms of the time I've spent developing that person over the last three, four, five years, but then an additional loss in terms of losing assets where they're taking clients on that I've trusted them with.
1:12:04
SPEAKER_01: And so there's you know, I've seen it happen before, and it can break businesses.
1:12:09
SPEAKER_01: So, from my point of view, I think the best model that I've come across is one where basically where I am now, which is where I control my own destiny.
1:12:20
SPEAKER_01: I have um my own brand, uh direct relationship with the FCA, some great procedures, really good team that I've developed, but also autonomy over where we want to go in the business in terms of client bank and so on.
1:12:31
SPEAKER_01: Um, but the key thing is I enjoy what I do.
1:12:34
SPEAKER_01: So I get out of bed every morning, I want to speak to my clients, um, I can develop my staff, which is a big, big thing for me.
1:12:40
SPEAKER_01: Uh, and you know, they they gradually becoming more and more technical and more um adept at what they do, and that's great, it's a better service to the clients, but it also means I'm not being drained from a compliance point of view, um, I'm still focusing on the bit that I love, and then I then liaise with other advisors who are DA, and we share we share um ideas going forward, and we we bounce off each other, and we have conversations regularly, and we talk about our investment structures and so on.
1:13:07
SPEAKER_01: And that for me is everything because I'm I'm autonomous, but I'm within a community, and that's great.
1:13:12
SPEAKER_00: And that's really interesting.
1:13:14
SPEAKER_00: So I've been speaking to more financial advisors, especially financial advisors that run their own practices.
1:13:19
SPEAKER_00: A bit like me, really.
1:13:20
SPEAKER_00: I'm part of a recruiter network of you know, come you know, company owners who all come together and share their ideas and the things that work well.
1:13:27
SPEAKER_00: It's brilliant during COVID because obviously everyone was losing the plot.
1:13:30
SPEAKER_00: And this network helped us absolutely massively understand how to position ourselves, where we can get our money, you know, where we can get our funding from, all that kind of stuff.
1:13:38
SPEAKER_00: It was amazing.
1:13:39
SPEAKER_00: Um, do is there something like that for financial advisors?
1:13:42
SPEAKER_00: It's not obviously I'm not a financial advisor, I'm not really part of the community in that way, but is there a a networking sort of um group or community?
1:13:51
SPEAKER_00: Nothing like that.
1:13:52
SPEAKER_01: No, and that is something that I think we could really do with, and especially in these remote worlds, you know, in this remote world, um, we get invited to webinars on a regular basis, and you know, we're swamped by forum invitations and so on and so forth.
1:14:07
SPEAKER_01: The reality is there's nothing there that kind of brings like-minded individuals in the industry together.
1:14:12
SPEAKER_01: And I think sometimes that uh, you know, certainly if you are a one-man band and you're you know operating from home, and you know, you're you're maybe, even if you've got a couple of staff, it can be uh, I mean, don't get me wrong, I've been in the industry now for a long time, but it can be quite an isolating experience if you just use a bit and you're not maybe within um either a network or you're not within um a firm that has other advisors.
1:14:36
SPEAKER_01: Um I think the reality is that you really at the early stage of your career, you need to be within an environment where you can bounce off other people.
1:14:44
SPEAKER_01: So I think joining a network uh or a firm that has other advisors and getting them to mentor you, for me, that's everything.
1:14:51
SPEAKER_01: That's really where you need to be because you'll cut your teeth there in a safe environment.
1:14:56
SPEAKER_01: You know, you've got the potential of new leads coming in from them, probably.
1:14:59
SPEAKER_01: They'll give you let you have some of their clients.
1:15:01
SPEAKER_01: Um, if you make a mistake, yeah, it doesn't matter because they're there to kind of help you and assist you through.
1:15:07
SPEAKER_01: Um, and you will make mistakes, it's you know, it's a given.
1:15:09
SPEAKER_01: We all do.
1:15:10
SPEAKER_01: Yeah, um, but um, but I think that's that's really important because let's be honest, the qualifications uh they're only five percent of what we do.
1:15:19
SPEAKER_01: You know, the qualifications are literally a gateway into the industry.
1:15:23
SPEAKER_01: The rest of the of the time that you spend in the industry is building on your experience, and every time you speak to a client, every time you have interaction with a fund manager or another IFA, that's experience that's logged and it helps you to develop and improve your business.
1:15:38
SPEAKER_00: Funny, isn't it?
1:15:38
SPEAKER_00: Like that the financial planning industry can be quite sort of in not insular, what's the word?
1:15:43
SPEAKER_00: Um, can be quite protective.
1:15:46
SPEAKER_00: You know, advisors can be quite protective.
1:15:48
SPEAKER_00: I find a couple of advisors that do build their smaller communities and and and sort of build trusting relationships with other advisors, but as an industry, there isn't this kind of open kind of look.
1:15:59
SPEAKER_00: Because at the end of the day, there's not that many financial advisors, and there's a shitload of clients out there not getting financial advice.
1:16:03
SPEAKER_00: You'd think there'd be like this open forum communities sharing ideas and passing ideas and and helping it grow.
1:16:10
SPEAKER_00: And actually, interestingly, that's what I'm sort of looking at with the financial plan of life is to create this community and have a you know a training platform as well with videos and all that kind of stuff where you can.
1:16:19
SPEAKER_01: Yeah, yeah, I think we really need it.
1:16:21
SPEAKER_01: I really do.
1:16:21
SPEAKER_01: I think the you know, the CII, PFS, they've tried over the years to to do things like that, but nothing along the lines of what you're talking about.
1:16:29
SPEAKER_01: I think where they they come into their own is maybe coming up with new initiatives like the Forces Plan, um, where they're offering advice to ex-Forces personnel, uh, they're you know they're they're they're um they liaise with the Treasury Department and with government policy and so on.
1:16:45
SPEAKER_01: Um the reality is that actually I think from a training and mental health side and um and just uh just a social aspect, I think that if we can do something like you're referring to, I think it would bring a greater sense of solidarity to the industry.
1:17:05
SPEAKER_01: And I think it's I think that is so important for the youngsters coming in, you know, for the new people.
1:17:10
SPEAKER_01: They need to feel part of something.
1:17:12
SPEAKER_00: And also it allows um, so you mentioned there like the PFS and all of that.
1:17:16
SPEAKER_00: There's so many things out there, but it's just everywhere, it's not consolidated into one place.
1:17:21
SPEAKER_00: So we've got to do just bring all that news in and bring all that, all those changes, all the advice, all the you know, trainers and all that kind of stuff.
1:17:29
SPEAKER_00: Perhaps somebody because one thing I one thing I've noticed is financial planners aren't they're not massively embracing personal branding, you know, and getting on camera and video and photos and using social media in the way that it can be used to win and acquire new clients.
1:17:44
SPEAKER_00: And you know, if you fed into something like that and there was somebody in there and it's like, oh look, here's our personal branding course, it you know, yeah, sign up, sign up for it.
1:17:52
SPEAKER_00: It's just it's just easy, isn't it?
1:17:54
SPEAKER_01: I think I think you're I think you're on the right track, and I think that within the industry there is a huge amount of knowledge that's almost secret in the easiest possible way.
1:18:06
SPEAKER_01: Because unless you're a financial advisor, you really wouldn't have a clue what goes on and how to how to go how to get where I am, for example.
1:18:13
SPEAKER_01: And it's only really through experience that I've got where I am.
1:18:16
SPEAKER_01: I didn't kind of read it in the book or um, you know, I didn't kind of look at other advisors and say, yeah, I can see how they got there.
1:18:23
SPEAKER_01: To a degree, uh it's just through trying things and getting where I am that's got me here.
1:18:29
SPEAKER_01: And so it's certainly not as structured as maybe some of the other routes, like you know, accountancy, uh legal practices and so on.
1:18:38
SPEAKER_01: And I think financial advice is still to a degree, um, it's not really I know it's people say it's a profession now, but the reality is that you know, parents when they're talking to their kids about what they want to do in the future, the perception is still there that you know that they're gonna go off and become an architect, accountant, or doctor.
1:19:00
SPEAKER_00: Doctor.
1:19:01
SPEAKER_01: Um, or lawyer.
1:19:02
SPEAKER_01: You know, it's not so much a financial advisor.
1:19:04
SPEAKER_01: I think and I think that's probably a generational thing.
1:19:06
SPEAKER_01: I think the old school probably still think of the um, I think there is still an element of people out there who see financial advisors as the man from the pearl, the man from the co-op, um, or the banker who was trying to force you into an ICE when the market was through the roof, you know, that kind of thing.
1:19:23
SPEAKER_01: And then there's a bit of a few.
1:19:25
SPEAKER_00: Yeah, I think financial planning, there's a couple of financial planners that I'm coming across that are bringing it very much into the now, you know, this kind of social, um, this kind of social effect where they are positioning themselves as financial coaches, you know, it was lifestyle financial planning, wasn't it, for ages?
1:19:43
SPEAKER_00: But you know, yeah, yeah, yeah.
1:19:44
SPEAKER_00: Now it's now it's coaching.
1:19:45
SPEAKER_00: I'm your financial coach, and and I think we're putting out content, they're they're sharing stuff for free all the time, and they're getting on podcasts.
1:19:52
SPEAKER_00: And there's one guy I've got on the podcast called Emmanuel Asuko, who's on um Spend Now, Spend Less, Save Better, I think is channel four.
1:20:00
SPEAKER_00: I always batter on, I always batter on about him because he's really invested heavily in social media and investing in that model of being a coach, sure.
1:20:09
SPEAKER_00: Building that relationship and being a coach because his his whole his whole approach is like, well, I'm gonna be I'm telling the kids, you know, I'm telling the wealthy ones of tomorrow because the generational sort of the transition of wealth to the next generation is gonna be huge, isn't it?
1:20:22
SPEAKER_00: You know, and what he's saying is I'm building that relationship with those guys.
1:20:26
SPEAKER_00: So before any other financial advisor goes out there and tries to win it through, you know, that way, he's like, I'm already in their newsfeed, I'm already talking to them on Instagram, I'm already giving them hints and tips.
1:20:36
SPEAKER_00: And he's paying that kind of long game.
1:20:38
SPEAKER_01: And um and that's organic growth, but a really canny way of doing it.
1:20:42
SPEAKER_01: Yeah, so that's great.
1:20:44
SPEAKER_01: From my point of view, I kind of wanted to grow quicker.
1:20:47
SPEAKER_01: So in 10 years, I've kind of gone from a start to where I am now, and so I couldn't have achieved that through organic growth.
1:20:54
SPEAKER_01: Um, I don't think I certainly, yes, you're right, you can go down the social media route, you can do all the kind of the videos, the the streaming, the on all the other things.
1:21:03
SPEAKER_00: Have I got the time slogging it out?
1:21:05
SPEAKER_00: Yeah, that's slogging it out.
1:21:06
SPEAKER_01: You've got to be committed to it, you've got to have other income sources early on because you're just not earning enough.
1:21:11
SPEAKER_01: Uh for me personally, um, I'd already got 17 years experience in the bank.
1:21:16
SPEAKER_01: I didn't want to spend another 17 years waiting to become successful.
1:21:20
SPEAKER_01: So for me, it was a case of stepping off as an already qualified and experienced financial advisor, going independent in 2007, sorry, 2011, and saying, right, I know my model, I know my goal, I know where I want to be in five years' time, in fact, I know where I want to be in 12 months' time, and actually building on that and continuously looking forward.
1:21:39
SPEAKER_01: So I've kind of I've done that through uh look.
1:21:42
SPEAKER_01: Let's give somebody a bit of a house.
1:21:44
SPEAKER_00: Yeah, let's give the listeners a bit of a reality check check then.
1:21:47
SPEAKER_00: Okay, you work for the bank for quite some time.
1:21:49
SPEAKER_00: Obviously, you're employed, it's tied, you know, you may have built some strong relationships within those banks.
1:21:54
SPEAKER_00: You know, some of those may have followed you, followed you when you went independent.
1:21:58
SPEAKER_01: Not many, not many because of data protection.
1:22:00
SPEAKER_01: I didn't want to push the boat out.
1:22:02
SPEAKER_01: Okay.
1:22:02
SPEAKER_01: So one or two of them contacted me, uh, probably anywhere between five and ten.
1:22:07
SPEAKER_01: Uh, but the reality is that you know they they were in the minority because I didn't actively go out looking for clients.
1:22:14
SPEAKER_00: Okay, so you've gone independent, right?
1:22:16
SPEAKER_00: You've gone self-employed.
1:22:18
SPEAKER_02: Yep.
1:22:18
SPEAKER_00: You had that horrible situation where Honester goes under and you you lose a load of money.
1:22:24
SPEAKER_00: Did you ever get that money back or not?
1:22:26
SPEAKER_01: No.
1:22:27
SPEAKER_00: That was it gone.
1:22:28
SPEAKER_01: They're still with the administrators, they're still sending letters saying that we might get, you know, a uh uh what is it, fit of uh a penny in the pound.
1:22:37
SPEAKER_01: So, you know, the reality is we probably won't ever get anything back.
1:22:40
SPEAKER_00: And it's times like that as well, where and this kind of sums up being a business owner, um, back to what you said earlier about sometimes it's quite a lonely place being on your own and then not being able to turn to somebody and think, shit, you know, has this ever happened to you?
1:22:54
SPEAKER_00: What the hell do I do?
1:22:55
SPEAKER_01: Absolutely.
1:22:56
SPEAKER_00: I bet like um so what was your sort of mental health and and and and stress levels like during that period?
1:23:03
SPEAKER_00: Was it a big thing?
1:23:04
SPEAKER_01: Yeah, the funny thing was I was yeah, the funny thing was I was far more stressed uh leaving the bank in the in the latter stages of working in the bank than I was when I was in that position you're talking about.
1:23:17
SPEAKER_01: Right.
1:23:17
SPEAKER_01: So if we take a year before, before honestly went bust, a year before that I was in the bank.
1:23:24
SPEAKER_01: I had sales targets through the roof that I really didn't agree with.
1:23:28
SPEAKER_01: I was trying to sell products to clients who clearly didn't need them or want them.
1:23:32
SPEAKER_01: Uh we were coming through the financial the latter stages of the financial crisis, and there was a massive mistrust of uh from clients to the banking industry.
1:23:42
SPEAKER_01: Um, Lloyds had just been uh Lloyds had just saved the Halifax, so they just avoided them going bust.
1:23:47
SPEAKER_01: But yeah, massive mistrust.
1:23:49
SPEAKER_01: And so I I left at a time when you know I clearly was was not happy about going out and selling to clients who just wanted reassurance and they wanted to just effectively what the bank should have done is invested in us as you know as restorers of relationships during that period and just sat back and said scrub sales targets, we just want to keep those clients.
1:24:11
SPEAKER_01: And I think then the banks would have got through RDR and still kept to Salesforce.
1:24:16
SPEAKER_01: The reality is they got through the financial crisis, saw massive losses, had RDR drop on them as well, and then all the banks in the UK got rid of all the financial advisors, apart from a few high net worth advisors.
1:24:27
SPEAKER_01: So we suddenly went from, if you look at the stats, I think 10 to 15 years ago we had somewhere around 250,000 advisors in the industry.
1:24:35
SPEAKER_01: Today there's sub-23,000, roughly.
1:24:38
SPEAKER_01: Uh, and that's that's massive, you know, that's a massive change.
1:24:42
SPEAKER_01: So we're a tiny industry now.
1:24:44
SPEAKER_01: Um, but in answer to your question, yeah, I was when I left the bank, oh god, it was horrendous, you know, I because I felt as though I couldn't move left or right.
1:24:52
SPEAKER_01: You know, I was I was employed, I was under the control of somebody else.
1:24:55
SPEAKER_01: They were trying to make me do things that I didn't believe were ethical, and so but I had a mortgage to pay, so you you're in this awful quandary.
1:25:02
SPEAKER_01: Whereas when I was self-employed, there was no money coming in, but I had my qualifications, and I I I believed that I would make it because there was no other alternative, and I had clients who believed in me as well, and so um I had another advisor who um very uh helpfully uh gave me some short-term contract work to do, uh, which helped me financially during that following six-month period, and then I also bought leads off the internet.
1:25:30
SPEAKER_01: It was pretty grim, uh, but I managed to survive.
1:25:33
SPEAKER_00: And then let's be clear about that then.
1:25:35
SPEAKER_00: So if someone if someone leaves, like um, let's say someone leaves, let's someone thinks they're gonna go self-employed as a financial advisor.
1:25:40
SPEAKER_00: It happens all the time.
1:25:41
SPEAKER_00: I speak to them, I speak to them all the time.
1:25:43
SPEAKER_00: Yep.
1:25:44
SPEAKER_00: Let's be real here.
1:25:45
SPEAKER_00: What does the first year, two years, three years, what does it really look like?
1:25:51
SPEAKER_00: And what should they really expect?
1:25:54
SPEAKER_01: It's it genuinely depends on uh two things, what you're leaving and what you're joining.
1:25:59
SPEAKER_01: So if you are leaving a uh a position where you've already got some clients, the reality is that it's it's not too bad because you've already got whatever however many thousand pounds a month coming in from those clients wherever you are, and when you go self-employed, you're then bringing that income stream across by doing the transfer of servicing and so on.
1:26:18
SPEAKER_01: There is a data protection thing.
1:26:20
SPEAKER_01: If you're allowed to do that, whether you're allowed to do that, whether the clients will follow you, whether they're more affiliated to the brand.
1:26:26
SPEAKER_01: There's loads of questions there.
1:26:28
SPEAKER_01: And then the other thing, of course, you've got to bear in mind is that where are you going to?
1:26:31
SPEAKER_01: So, does the new place have leads to provide you?
1:26:34
SPEAKER_01: Um, do they have a client bank that they're prepared to give you?
1:26:38
SPEAKER_01: Um, that's maybe just got some legacy commissions coming in to give you enough to pay the mortgage.
1:26:43
SPEAKER_01: Um, and and does it have the potential of a new business?
1:26:46
SPEAKER_01: You know, where are you going to get new leads from?
1:26:48
SPEAKER_01: So there's there's two sides to that coin, and it really is dependent on where you're coming from and also where you're going to.
1:26:56
SPEAKER_00: I think as well with um setting up your own business and running your own business, you have to go through quite a few pain barriers anyway.
1:27:03
SPEAKER_00: No two days can be the same.
1:27:05
SPEAKER_00: Um, you're always sort of like that, you know, like it's it's you kind of protection, your blanket.
1:27:11
SPEAKER_00: It's always a bit of a false protection blanket, really, because you never know when you're going to get made redundant when you're working for a bank or whatever.
1:27:17
SPEAKER_00: But you're on the kind of master of your own destiny, and when you're running your own business, it's kind of nice, but sometimes you can't, sometimes you're so lost in perhaps a bit of fear or worry or concerns and all of that.
1:27:29
SPEAKER_00: And I don't know about you, but I experienced some quite bad depression and stress and anxiety.
1:27:34
SPEAKER_01: Yeah, you've been through all that, Sam.
1:27:36
SPEAKER_00: Drinking and silly things like just to kind of calm me down.
1:27:39
SPEAKER_01: Yeah, the funny thing is I never went through that since I've had my own business.
1:27:44
SPEAKER_00: Have you not?
1:27:44
SPEAKER_00: Okay.
1:27:45
SPEAKER_01: I went through that when I was employed.
1:27:47
SPEAKER_01: So I went through all that when I was with the banks, and that was one of that was probably the hardest period for me because you're not in control of your own destiny.
1:27:55
SPEAKER_01: When you're self employed and you have a qualification, you know that it doesn't matter.
1:28:00
SPEAKER_01: How bad it gets, you will always you will always that you've got a skill.
1:28:04
SPEAKER_03: Yeah.
1:28:04
SPEAKER_01: So you've got that skill and you will always make money somehow.
1:28:07
SPEAKER_01: You'll get through it.
1:28:08
SPEAKER_01: Um, the one thing I would say is that when you step off, um uh you need to make sure you've got a little bit of a buffer behind you financially.
1:28:16
SPEAKER_03: Yeah.
1:28:16
SPEAKER_01: Because that you don't want to step off and go self-employed and then suddenly find that because of a lack of resources, you're then having to leave the industry.
1:28:23
SPEAKER_01: The potential is there for the industry, but it may be that you have to invest in the first year in yourself, really, to be able to build that reputation, get those clients across, get some organic growth, and so just have some money behind you for that first year.
1:28:35
SPEAKER_01: Yeah.
1:28:36
SPEAKER_01: Um, but but coming back to what you're saying in terms of downsides, the biggest downside I have now is not so much stress, it's not so much depression, it's um it's it's tiredness.
1:28:48
SPEAKER_01: So it's stress, physical stress through tiredness.
1:28:51
SPEAKER_01: Because we are so busy as an industry that if you're good at your job, which you know most financial advisors will say that they are busy uh and they you know they they are victims of their own success, you'll get the odd referral, you may be buying clients, um, you're busy.
1:29:07
SPEAKER_01: And you know, in my world, I'm also I'm not I'm I'm directly authorized, so I'm not with the network.
1:29:12
SPEAKER_01: I've got my own gauge roll reports to do, I've got all the other stuff coming up that uh kicks you, you know, FCA fees, uh PI insurance renewals.
1:29:20
SPEAKER_01: So it's not just dealing with the clients, and sometimes I have to be honest, there's not enough hours in the day.
1:29:24
SPEAKER_01: You know, I haven't had a holiday for a long time, and you kind of I'm getting to a point where I'm getting back into a routine and getting some normality.
1:29:33
SPEAKER_01: My plan was that after a certain amount of years, I'd be in a model and I'm pretty much there in another six months, I'll be there, where I can then I can travel and I can do my job from where I am, and I can also um, you know, I can work the hours I want to work, when I want to work, and um, and I I'm I've kind of got the got the life work balance that you would want at this stage in your life.
1:29:56
SPEAKER_00: Yeah, that's a thing, isn't it?
1:29:57
SPEAKER_00: I think you've got to I think you've got to expect to go through a few pain barriers, a few difficulties when you run your own business, but you've got to keep persevering because once you you will eventually get through it.
1:30:08
SPEAKER_00: And I'm I'm if I look at myself now where I am to where I was 10 years ago, I I have to kick, I have to remind myself that Sam, you're like pretty much doing what you want to do.
1:30:18
SPEAKER_00: Like, you know, you've just got to set up Financial Planner Life podcast when you've got 13, 14 other people in there working on your business that you set up a little while back.
1:30:26
SPEAKER_00: I forget that.
1:30:27
SPEAKER_00: And I think you have to kind of remind yourself when you're a business owner to give yourself a bit of a break as well.
1:30:31
SPEAKER_00: And as you mentioned about being tired, I think um, yeah, physically and mentally tired.
1:30:38
SPEAKER_00: And I think um sometimes you've got to come into the present and go, actually, perhaps I do need a break or I need to do some meditation or I need to exercise or I need to make I need to make I need to make time for things that are gonna do I spend some time with my family because if I if I come home and I'm I mean I had my wife working for me for a year, that was mental.
1:30:57
SPEAKER_00: Like that's like like some of the things I've done, and I just think that's purely self, purely selfish.
1:31:02
SPEAKER_00: That was purely selfish.
1:31:04
SPEAKER_00: Absolutely, and it's stressing.
1:31:06
SPEAKER_00: What do you what do you do to to so yeah?
1:31:09
SPEAKER_00: So you run your own business, you get tired, it's hard work.
1:31:13
SPEAKER_00: Yeah, what do you what do you do yourself to sort of give yourself a bit of downtime and to refuel refuel the batteries?
1:31:20
SPEAKER_01: Yeah, so I live in the country, so for me, uh it's about uh uh getting out for a jog.
1:31:26
SPEAKER_01: You know, I'll go and I'm not a big I'm not a big runner because my knees are knackered, but I'll go out for a six or seven mile or a nine-mile jog, take me a couple of hours, hour and a half.
1:31:36
SPEAKER_01: Yeah, and I'll just kind of go off-road and off into the woods and round about, never meet anyone, and and that kind of clears my head and gives me thinking time, thinking space, creative space, gives me time to kind of do my own thing and kind of almost assimilate all the jigsaw pieces together.
1:31:54
SPEAKER_01: And I also think about the future quite a bit as well.
1:31:57
SPEAKER_01: So I kind of think about you know, sustaining the business.
1:32:00
SPEAKER_01: That's a big thing for me.
1:32:01
SPEAKER_01: It's sustainability, um, security, financial security.
1:32:05
SPEAKER_01: You know, um, when I take holidays, it's nice to think that yeah, I'm away, but we've got the contingencies in place, something goes wrong.
1:32:12
SPEAKER_01: It's not gonna mean me flying back to the UK.
1:32:14
SPEAKER_01: You know, I I've got staff there who know what they're doing, I've got another member of staff.
1:32:18
SPEAKER_01: So I've tried to always build in contingencies for the business.
1:32:21
SPEAKER_01: And so, you know, we've gone through COVID, it hasn't really affected us, really.
1:32:26
SPEAKER_01: I'm tired, uh, but the reality is that you know we've we've got through, and so it's about looking forward and and think trying to spot things that could knock you off your feet so that they don't then appear, and then because if if you don't give some thought to the future, that's when things will occur, and then you start to get depressed, yeah, because you start to beat yourself up thinking, God, I should have thought of that, and actually, I'm I'm getting physically tired now, and also I'm not where I wanted to be.
1:32:55
SPEAKER_01: And and the other thing is you've got to be, I think you've got to have because I I I think in terms of the next 12 months, but also where I want to be at the end goal, kind of five years ahead, you know, 10 years ahead, and that kind of thing, and that can always change.
1:33:09
SPEAKER_01: So I think you've got to be flexible, you've got to not be too hard on yourself, yeah.
1:33:12
SPEAKER_01: Roll with punches, you know.
1:33:14
SPEAKER_01: If life craps on you next week, pick yourself up, roll with it, smile, go for a drink, and then get through it.
1:33:22
SPEAKER_01: Talk to your friends.
1:33:22
SPEAKER_00: It's all it's all learning as well, it's all learning experience.
1:33:25
SPEAKER_00: Like some of the shit that I've been through.
1:33:26
SPEAKER_00: I just think to myself, well, I'm kind of glad I went through that because you know it's it's made me stronger and made me a better person I am today.
1:33:33
SPEAKER_00: Funny, you said about running.
1:33:34
SPEAKER_00: I love my running.
1:33:35
SPEAKER_00: I do quite an extensive amount of running, and it's something I've really gotten into.
1:33:38
SPEAKER_00: And um when you were when you were doing that, the jigsaw thing.
1:33:41
SPEAKER_00: So when I run, it's like I can bring a thought into my head, and because it's like you're in hyper zone and you can just kind of look at that and go and it goes, and the next one comes, like, that's it.
1:33:52
SPEAKER_00: It's such a beautiful, it's like almost meditative, it's like a beautiful way to clear your head, and you come back and you're like, Oh my god, like I've got loose serotonin running through my body.
1:34:00
SPEAKER_00: I feel great, and I've got nothing on my mind.
1:34:02
SPEAKER_00: That's it.
1:34:03
SPEAKER_00: It's beautiful.
1:34:04
SPEAKER_03: It's beautiful.
1:34:05
SPEAKER_00: I highly recommend running to anybody, especially if you run a business and you've got lots on your mind, get out and run because it just does your stress levels the world of good.
1:34:13
SPEAKER_01: Yeah, absolutely.
1:34:14
SPEAKER_01: Well, because of my knee, mine's kind of a jog and a walk.
1:34:17
SPEAKER_01: Uh, but uh, but I I and I, you know, I but I get out and I do that and I do my mountain biking as well, a bit of swimming, that kind of thing, you know.
1:34:24
SPEAKER_00: In the countryside, in in the woods, in the countryside.
1:34:27
SPEAKER_00: I love running through the woods, like getting the energy from the tree.
1:34:29
SPEAKER_00: I love it.
1:34:30
SPEAKER_00: I'm a bit of a hippie at heart, really.
1:34:31
SPEAKER_00: I absolutely love that stuff.
1:34:32
SPEAKER_01: And I just um I think you get a lot of energy from outside, and you know, this all this screen-based stuff is it can be draining.
1:34:40
SPEAKER_01: So I think if you can kind of offset that with getting outside, getting away from all the electricity and all the kind of the screens and all that, it's great.
1:34:48
SPEAKER_01: And the other thing, of course, is it I was gonna say the other thing as well is making sure that you and your staff get out and do stuff together.
1:34:55
SPEAKER_01: And I know it's difficult with COVID, but I'm a great believer in in teamwork and getting to know each other as people, not just business colleagues.
1:35:04
SPEAKER_01: Yeah, um, because that's where you get to know about the little idiosyncrasies, and you get because we've all got good things and bad things about us, you know.
1:35:12
SPEAKER_01: Um, I mean, I'm I'm great with people, but I'm my admin.
1:35:16
SPEAKER_01: I mean, I'm I'm I'm quite nerdy in the admin.
1:35:18
SPEAKER_01: So if I had to do all my own admin, I'd never get anything else done.
1:35:21
SPEAKER_01: No, whereas I know that I can give it to my ladies and they will go through, they're like machines, they'll go through the admin, they don't get emotionally stressed by it, and they can churn it out, which is fantastic.
1:35:32
SPEAKER_01: It's really hyper accurate.
1:35:34
SPEAKER_01: Yeah, so I get the accuracy and the volume, but then I then I make sure that I touch base with them at touch points along the process to make sure it's up to the quality and they get the learning exercises that we want.
1:35:46
SPEAKER_01: So it's um well it's interesting.
1:35:48
SPEAKER_00: You're saying about the future, future-proofing your business and the fact that you you aren't somebody that's gone, I'm gonna hire five advisors and make loads of money.
1:35:55
SPEAKER_00: What you've actually said is I'm gonna focus on growing the business a strategic way, which is through acquisitions.
1:36:00
SPEAKER_00: The best way for me to get clients is that way.
1:36:01
SPEAKER_00: I understand that you've gone through the process, done it, and in the background, what you're doing is building support, and it's the support function that allows you to go off and do what you do.
1:36:10
SPEAKER_00: So you'll you're you you are looking at it from a less risky perspective.
1:36:14
SPEAKER_00: You're thinking I'm gonna build building the solid foundations to secure what it is I'm doing, and even then you're thinking, possibly I might bring somebody in, but only if and I like that, you know.
1:36:24
SPEAKER_01: Because you think you've got to be in mind as well.
1:36:26
SPEAKER_01: Yeah, absolutely that.
1:36:27
SPEAKER_01: The one thing you've got to bear in mind is it's all about margins in my business or in any business.
1:36:32
SPEAKER_01: Um, turnover is key.
1:36:34
SPEAKER_01: You've got to have money coming in to be able to, you know, front-end activity in any business is crucial.
1:36:39
SPEAKER_01: But then once you've done that and you've got an increasing turnover, I think a lot of advisors then fall into the what I call the turnover trap.
1:36:46
SPEAKER_01: So all they've got their eye on is this increasing turnover.
1:36:49
SPEAKER_01: So they take on more and more staff, more and more advisors to kind of almost satisfy their desire for a higher top number.
1:36:56
SPEAKER_01: Whereas in my business, although my top number is increased every year, the reality is that for me, it's about getting your your actual net profit up.
1:37:06
SPEAKER_01: That is the key, because then it brings benefits to you personally, so that you can, it's all relevant in a great business, but you also, as a personal, you know, you want to see the personal benefits for you and your family.
1:37:18
SPEAKER_01: But also it means you're building personal financial security for your family and so on.
1:37:22
SPEAKER_01: But the other thing I think is really important is that if you can build up a network of support, what you're also doing then is you're making sure that your own longevity in the industry is greater.
1:37:33
SPEAKER_01: Because the problem is in my industry is that the more successful you get, the stronger chance you have a burnout.
1:37:39
SPEAKER_01: And I think if you do the job really well and you're DA and you're independent, there's a lot of crap coming at us.
1:37:44
SPEAKER_01: The regulatory demands are getting bigger, the FCA fees are growing, and there's a big, big, I think there's a big mental health problem in our industry that's waiting to have waiting to happen.
1:37:54
SPEAKER_01: Because the you know, the guys like us who are stringent, we're not gonna go directly, uh, we're not gonna go restrictive, we want to stay independent, we're drowning under the under the workload.
1:38:04
SPEAKER_01: And so I think what I've recognized kind of right at the beginning of this process was I need staff to take some of that heavy lifting, and also going forward, that means that in a few years' time I can start to take a step back from relentless appointments and actually still have a core of a hundred, uh maybe eighty households, but they're all big, big clients because I've gone through this condensation, this condensing process uh on a number of occasions, and actually then I've got more time.
1:38:33
SPEAKER_01: So instead of me doing 50 hours a week, I'm doing 25 hours a week, but they're quality hours, and that means I've probably got a greater appetite to work until I'm 60, 65 because I'm enjoying what I'm doing.
1:38:44
SPEAKER_00: Have a better quality of life and a more balance.
1:38:47
SPEAKER_01: But listen to that.
1:38:48
SPEAKER_00: Philip, thank you so much for your time today.
1:38:50
SPEAKER_00: I'm gonna bring it to an end now.
1:38:52
SPEAKER_00: I could talk, I could talk to you all day.
1:38:53
SPEAKER_01: Not at all, that's all right.
1:38:54
SPEAKER_01: I'm I'm sure we're both knackered.
1:38:56
SPEAKER_00: Yeah, I really yeah, more zoom fatigue.
1:38:59
SPEAKER_00: Um I've yeah, I've learned a lot, and thank you so much for sharing also around the acquisition side.
1:39:04
SPEAKER_00: I think um that's an area like like I said, I haven't spoken to anybody about before, but it's always on the back of the minds of people who are financial planners about how they grow their businesses, especially the self-employed.
1:39:13
SPEAKER_00: So thanks for sharing your experience around that.
1:39:15
SPEAKER_00: And I think that's an area that I'll share on on social media as well, because I think that'll that'll interest people.
1:39:21
SPEAKER_01: It's been really valuable.
1:39:22
SPEAKER_01: Thank you, uh Sam.
1:39:23
SPEAKER_01: And I hope this goes some way to kind of give some people a bit of a roadmap in terms of you know new to the industry.
1:39:29
SPEAKER_01: It might just give them a bit of inspiration.
1:39:31
SPEAKER_00: 100%.
1:39:31
SPEAKER_00: Philip, thank you so much for your time today, mate.
1:39:33
SPEAKER_01: All the best.
1:39:34
SPEAKER_01: Thanks, Sam.
1:39:34
SPEAKER_01: Take care.
1:39:35
SPEAKER_00: Cheers.
1:39:35
SPEAKER_01: Good luck, bye bye.
1:39:36
SPEAKER_01: Nice one, Philip.