Three advisers share their personal stories on why they decided to turn their back on products and make the switch into financial life planning.
Around 200 financial life planners – or those considering embarking on that particular path of financial advice – came together for a unique product-provider free conference, BACK2Y, organised by Inspiring Adviser founder Paul Armson.
There, three advisers gave personal accounts of their journey to financial life planning - and how anyone can do it if they are committed.
1st Chartered Financial Planning founder Sylvia Bentham
"Getting qualifications is boring. They are just Brownie badges. I've got them, but that's all they are.
"I went to a grammar school. Then I didn't go to university, I went to work in a bank so I could earn some money to buy a pony.
"I ended up on a treadmill; earn a bit, spend a bit more. That's how your clients feel by the way. Then my dad dropped dead and something happened to me. I got off the treadmill. I bought my pony - except I didn't tell my husband. As it turned out, I bought my pony in the October and left my husband in the February.
"After we split I had a VW Polo, my pony and £4,000. That was it. But I still had my good job at the bank.
"I got a cottage in the countryside so I could keep my pony. Then I got fed up with my job at the bank and took voluntary redundancy. That's when I set up on my own as an IFA.
"I employed someone to do my admin and I thought the Retail Distribution Review was great - it was just me completing the badges I had already got.
"Then I found out about cash flow modelling and was recommended to speak to Paul Armson - that was the best thing that ever happened to me.
"You should start by asking clients what they don't want. Then use cash flow modelling to get clients thinking. Put them back in control.
"Ask clients are they doing what they really want. Ask yourself, are you doing what you really want?"
Clearwater Wealth Management founder Graham Ponting
"What I was doing before I became a life planner:
- Product salesman
- No office appointments as no office
- Late evenings
- Anyone was a potential client
"I had a hollow feeling I wasn't really helping my clients. My light bulb moment came at the Institute of Financial Planning (IFP) conference in 1998. I walked through the door and they were talking a different language - they were asking clients ‘why'. I'd never done that.
"I found out about cash flow modelling. Then I tried to clone in a rather geeky way the firms I'd seen at the IFP conference.
"I also started charging fees but it was a disaster. I realised I had to ‘sell' financial planning in a very different way. I also realised that some of the firms I had seen at the IFP conference weren't telling me the truth - they were just using cash flow modelling to sell more product. And, while they were talking as if they were established businesses, they weren't.
"What we do doesn't always work but that's okay. Our ‘J' curve - where you change your business model and the profits go down before they go up - took four years, but I knew it was working because our recurring income from financial planning was increasing.
"Last year we only took on four new clients but our profits went up 20% by us charging 1% up front and 1% ongoing with a minimum fee of £2,500 upfront and £2,500 a year.
"It's not about clients' money!
- It's about lifestyle
- Focus on the relationship
- All about referrals to build the business the business
- Be patient
- Review your process, that's where you add value
- Look for wins (e.g. parents being able to give their son £200,000 to buy a flat)
- Remember; it's not just about the client. We are professionals, we are offering a premium product and deserve to be paid well and successful.
- Don't panic; I panicked a lot. Some advisers are just starting out charging fees and are worried that they are not signing up five great clients every week. Don't worry - nobody else is either!
- The way not to go is to cut fees to be cheaper than the next guy. We are at the Aston Martin end of the profession - we shouldn't be doing that.
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