Financial Planner: You are one of the first Accredited Financial Planning FirmsTM, why were so keen to apply?
Sylvia Bentham: I completed a major programme of transition consultancy with the help of Steve Bowden from Pivotal Consulting to transform the business into a fee-based holistic Financial Planning firm and felt that the "accreditation" would provide the ideal showcase to demonstrate the high level of professionalism offered by 1st Chartered.
FP: Have you noticed any benefits yet from the accreditation and how do you intend to maximise its value?
SB: I am proud of the fact that we were the first and currently the only Accredited Financial Planning FirmTM in Lancashire. We are promoting the 1st Chartered service to selected legal practices in the area and have already enjoyed significant results. They really appreciate the holistic approach. We have also completed the transition of existing clients where appropriate and have found that it has differentiated between 'true' clients and transactional customers.
The true clients have become much more engaged with us as a firm and have been able to see real benefits in the way that they perceive their own personal financial situation. In quite a few cases it has resulted in them making real changes to their own lives. One in particular within 12 months of completing his fully holistic financial plan, closed his business, sold his house and went to live his desired future lifestyle by the seaside; it has changed his life completely.
FP: How did you get into Financial Planning and what attracted you to the profession?
SB: I started my IFA practice when I left my job as a commercial lender in a bank. I decided that I wanted to act for the clients' benefit not against them. In fact you could say poacher turned gamekeeper. My overriding principle is that I help clients understand their financial position and where necessary act as their chief buyer rather than try to sell them something.
FP: How has your team or company changed since the launch of the firm and what has the journey been like? How many clients do you have and what's the annual turnover?
SB: The business started in 1991 as a sole trader IFA with one junior admin/typist. There have been many changes – two office moves, a few advisers and staff have come and gone and there have been lots of adjustments in responses to regulatory changes. The business was re-launched in September 2008 and from that point on we've offered only holistic Financial Planning using Truth software. When clients need to implement the plan we act as their chief buyer in finding them the best and most appropriate deal available. The definition of a client has also changed; the difference being a "customer" who only does one piece of business and a "client" where you have an ongoing relationship. We used to have lots of customers - 499; now we have 84 committed Financial Planning clients and turnover has doubled since the re-launch.
FP: What type of Financial Planning do you offer to clients and what are your fees and charges?
SB: We offer full holistic Financial Planning using lifetime cashflow forecasting using the Truth software. We charge a fixed fee for the financial plan and review service and a percentage of investments by way of an implementation fee and an ongoing investment management fee.
FP: What sort of clients do you target and what type of service do they get? How do you differentiate your service from other companies?
SB: We did initially think of three different types of service differentiated by levels of complexity. This is a topic for ongoing review and we are looking to consolidate it into one consistent level of service but with different packages for different problems. To differentiate our service one of the most important things about our service is that I wanted to make it tangible for the client, where the client could understand what was on offer in real terms rather than technical and jargonised description. Our clients now understand that this is about money being a tool to enable them to live the life of their choice.
FP: How do you find new clients and what have been some of your best practices in terms of sourcing new clients? Can you give examples of what works most effectively?
SB: We have always enjoyed a good level of referrals from existing clients. This means that any new clients already understand the benefits of our service, as they are usually coming on the basis of a recommendation. I have recently contracted a business development manager to specifically target and market our service to professional practices. Within the first six weeks we were able to present our professional service to two highly respected professional practices in the area and have also received two major client referrals.
FP: What makes 1st Chartered Financial Planning different to other Financial Planning firms?
SB: Our two main mantras are: 1. It must be explained in plain English because if it isn't it usually means you don't understand it yourself. 2. Any recommendations made should stand the test "would you recommend this course of action to your own mother in the same circumstances?"
We also want advice to be extremely tangible. Clients have to go away believing and totally understanding what the recommendation means to them personally and what that means to their life, rather than it being full of technical and jargonised recommendations. While a full comprehensive explanation should be given as much as possible in plain English, the client should always be able to express "so what that means is ..." to explain the result to their wife.
FP: In terms of running your business, what software applications do you use (particularly in reference to Financial Planning and back office software) and what sort of internal processes do you run in brief to ensure everything runs smoothly? Do you have a weekly practice meeting, for example?
SB: We have used JCS since the year 2000. It is a very comprehensive back office software system, but like any software it is only as good as the information you put in. We use it extensively to the point where we have weekly fund valuation updates from Financial Express and every single client has all contact recorded on the system.
We also use Truth Software for our lifestyle Financial Planning and we have a fully documented internal systems and processes with template letters, questionnaires and "tools" to ensure the smooth running of the business. We have a regular weekly practice meeting to clarify the week's priorities and we organise the diary three months ahead and may have ad hoc meetings whenever there is something that requires attention.
FP: What has been your greatest source of achievement in running your business and what are you proudest of?
SB: I started the business from scratch; I had no clients and did not buy a client bank. I did not rely on paying out commission in the past for referrals, nor do I intend to. The business is streamlined to the point that a new member of staff could walk in and we could give them a process that could be followed from beginning to end, so it offers a good training ground. We have a total of five staff, including myself, but the average age is only 30. I am very proud that no one single member of staff, other than myself, has a history of working in financial services. All have been trained from scratch by me. Therefore we have no 'baggage' of how the industry used to be.
FP: Are you ready for the RDR and what effect do you think it will have on the profession?
SB: We have been running on RDR principles since September 2008 with adviser charging, holistic Financial Planning and I have been QCF Level 6 qualified since 2006. My SPS is complete and in place, although there was some gap fill, which was obvious since I had completed my qualifications in 2006.
With regard to the profession, I think RDR is the biggest bonus that the sector will get. A professional Financial Planning sector can only be better for consumers and how can anybody be worse off by raising their game?
FP: Studies have shown that consumers may be unwilling to pay for advice, how would you encourage them to consider the benefits of Financial Planning?
SB: Having been using adviser charging and Financial Planning fully since 2008 I have not seen much resistance to consumers paying for advice. The secret is to show how the advice will benefit the consumer. The biggest question is why should the client pay for what you have to offer. You need to be able to demonstrate and make sure that there is real value in your advice to the client even if that value is not necessarily measured in pounds and pence. It may be that the value is the peace of mind they achieve from knowing they will never run out of money. That in itself is worth a fortune.
FP: Many planners are concerned about the rising cost of regulation and other threats to their businesses. What do you see as the main threats to your business?
SB: The main threat to our industry is that we aren't training enough young people and do not seem to have a clearly defined career path, which is not focused just on earning capacity but on learning capacity. This is one area that I want to develop in the future.
FP: If you could change anything about the Financial Planning profession what would you choose?
SB: I would like to see more focus on training in the workplace. Qualifications are one area that support the technical knowledge required but we need to look at how we can provide opportunities to develop skill sets. Not just the people skills but also organisation skills and technology skills and if we could build these into a demonstrative career planning system that would logically follow through and build on previously learned skills and technical knowledge then we will have a profession to be proud of.