Each month Financial Planner asks a leading Financial Planner to share best practice from their business and the story of how they built their company. This issue we talk to James Harvey CFP^CM of James Harvey Associates. 

Financial Planner: Your firm has been on the Accredited Financial Planning Firms register for over a year; why did you want to apply for the accreditation?
James Harvey CFP^CM: I think that the principles that the IFP extol are correct and clients benefit from the structure of advice. I am keen to be associated with the IFP and being an Accredited Financial Planning Firm adds some standing to our business profile.

FP: What benefits have you noticed and how do you intend to maximise on the hard work put into achieving the accreditation?
JH: The main benefit is being among a small group of excellent Financial Planners, most of whom bring energy and purpose to everything they do in life. Listening and engaging, debating the issues we all grapple with brings a wealth of knowledge and ideas to the table. I love the interaction and gain a lot of insight and support.

FP: How did you first get into Financial Planning and what attracted you to the profession?
JH: I fell into the profession when it wasn't a profession when a friend of mine introduced me to his manager. This is a great job; great money if you work hard and you are always meeting interesting people. I didn't find it easy to start with, in fact I have never found it easy, but I always liked the client relationships and they seem to value it as well.

FP: Why did you decide to set up your own company?
JH: If you are working for a large company you are working to their agenda. If this matches your own, perfect, but very often it is not a good fit. Operating on your own account or with a few like-minded people provides you the freedom to engage with your clients with integrity. This is a fundamental issue that is not being addressed or understood.
The provision of the best quality financial advice is provided by the IFA sector, which is a cottage industry if ever there was one. No other profession operates through so many small companies. It is interesting that as the regulator tries to take control of the profession, we know that the lion's share of dissatisfied customers come from the banks, we know that the regulator has a disdain for the smaller company, yet this is where the majority of the best quality firms sit. That is why I choose to run my own business.

FP: How has your company changed since the launch and what has the journey been like? How many clients do you have and what's the annual turnover?
JH: It took me a long time to realise that I want to give financial advice and have a good working relationship with a client base. It is important for new advisers to be trained and encouraged, but this is not where my skills set lies. I now work on my own account as a single adviser with the best PA in west London. We outsource all the other tasks so the advice process is as efficient as possible.
The move to charging fees was started seven years ago, guided by Brett Davidson, who had to explain everything to me at least twice but it does stick eventually. We have developed a very clear and reasoned investment strategy through Tim Hale at Albion, marketing through Carrie Bendall at Inspire. IT, Paraplanning, accountancy and the Gabriel return is all outsourced, allowing others to do the work far better than I could. I just want to meet clients. We look after 132 clients, husband and wife being treated as one. The turnover last year was £350,000.

FP: What type of Financial Planning do you offer to clients and what are your fees and charges?
JH: Any new client engagement gets the full Financial Planning service. We do have some clients who have capital invested through us where we just advise on the investment strategy. This can sometimes be a good way to start the relationship. The majority of clients have an annual planning meeting where we expect to discuss and review the big picture objectives and then run a lifetime cashflow forecast. The discussions that come from the process are great. Having the luxury of some extended time together sees definite benefit.
We have three main fees:-
Initial Strategy fee normally between £1,400 and £2,800 (new clients);
An implementation fee of one per cent of the money invested or moved at outset. Subsequent investments are made without an implementation fee;
An ongoing fee of one per cent of the investments under our responsibility.
Sometimes we charge a fixed monthly or annual fee, but reviewable annually. This is a clear and easy to understand schedule. There is no hiding. All forms of fee calculation have their faults, but for the service I provide and for the clients my practice attracts, this works well. There are some caps to these fees.
{desktop}{/desktop}{mobile}{/mobile}

FP: The firm is based in Ealing, west London. What sort of clients do you have and is there a particular niche that you target?
JH: All our marketing is done through our clients and 80 per cent of new clients are referrals. The other 20 per cent come via the Internet or other sources. Unbiased delivers a few clients each year. Our website has something Marmite about it. Either folk are attracted to it and it feels like a potential good fit, or I suspect folk run. Either way that is a result.
A typical new client would have arrived at the stage where their mortgage has been by and large repaid, they are almost through the phase of educating their children, they probably have several pension plans from different sources, a number of Isas and a general jumble of stuff.
The question burning on their mind is: "How is all this going to work? I am not stupid, why can I not understand this stuff and I can't do DIY finance anymore." They would have started to recognise that they need to engage an adviser that they are paying to ensure their interests are foremost, and if they go "ouch" when they are first told of the fee structure, then they realise that this is no dry run and it has to be right.
We have an asset class investment strategy, so if they believe they can beat the market forever, we will not be a good fit. An understanding as to the benefit and the patience to run a cashflow forecast each year, involving some homework prior to the meeting is necessary.

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 to ensure everything runs smoothly?
JH: We use the full version of Prestwood. We started with the Truth software, thanks to Paul Armson's great campaign on cashflow forecasting, and then gravitated to the full back office system. Sometimes it is a bit clunky but the systems and processes within the software, once you have spent time configuring them, are great. Writing a financial plan is a very easy process. We try and have a system for everything. Any instructions from a client or advice from us are recorded so there is a clear paper (electronic) trail. We are largely paperless now.

FP: You also offer Life Planning to your clients, what does this involve?
JH: I think that Life Planning is one of the most important elements of the advice process. It helps clients come to understand what is important in their lives. It helps clients see with a passion what is pivotal to helping them live a rewarding and valuable life. Humans have the ability to imagine a more abundant future but we get caught up in the hustle and bustle of everyday life and our dreams seem to become less tangible and less achievable. If we are not careful we allow this to pull us down. If we can help clients re-engage in this, all the motivation comes from them. Any work to achieve this is done with relish by the client. If saving needs to be accomplished, then they will find a way to achieve the goal. It is their goal and it is alive.
I don't use the phrase Life Planner very much. I touch on it on the website but only enough to explain that to give good advice I need to understand our clients. I do ask them to consider the three questions that George Kinder has devised. Sometimes I get pages back from clients, sometimes I get a word or two. But it is the start of a valuable conversation. This process just naturally leads to the conventional Financial Planning we do as CFP professionals.

FP: How does Life Planning combine with Financial Planning and what do your clients think of it?
JH: It just seems to make total sense to our clients. It is logical that an adviser needs to know their client before giving advice. Clearly this needs to be more than just date of birth and income needs. But when we get to the Financial Planning part, it is absolutely clear what we are aiming at. Clients love it.

FP: What is the next step for James Harvey Associates?
JH: I want to delegate more of the support roles and continue to fine tune our processes and thus enable me to hold more clients. I want to push the glass ceiling of business turnover and profitability and be respected for delivering an excellent Financial Planning service.

FP: What do you like doing in your spare time outside of work?
JH: I am married to Diana and we have two children in their early twenties. We are keen travellers and like the more unusual countries. I am a keen pianist and reluctant organist. I love the music of Rachmaninov, Tchaikovsky, Gershwin, Debussy and so on as I like lots of notes although I don't like learning them. I am a keen sailor, I own an Oyster Heritage 37 sailing boat and love sailing the longer passages; we plan to visit the Azores in July.