Michael Wilson Talks to Ruth Sturkey, Owner and Managing Director at The Red House Consulting, Clerkenwell


The sturkey smallbanner on the website says it all, really: “The Red House. Financial Planning for people who get what life’s about”. Now there’s a challenge to the old-school IFAs who used to think it was all about selling products. This firm prefers to turn the old principle round just about as far as it can be made to go. Let the products serve their purpose, it says, but keep your eyes sharply on the primacy of the client relationship.


Which is exactly the way that RDR intended it to be, of course. But how many of us really take the obligation as seriously and single-mindedly as this?

In a way it was my misfortune that I contacted Ms Sturkey just two days too late to sneak an invite to the firm’s housewarming party in its new premises on St John’sStreet, close to Farringdon and Old Street tube. A pity. Clerkenwell is one of my favourite parts of London, and it would have been great to see the old place again. And to meet some of her smallish (65-ish) client group, with whom she shares a lively interest in theatre, restaurants and the good things of life.

Baptism of Fire

The Red House (TRH) was born near Smithfield, back in late 2007 when the first banks were starting to send the first pre-shock tremors around the world before the big one eventually arrived in 2008. But in fact Ms Sturkey and her recently retired business partner Gareth Marr (formerly of Origen, and before that Moores Marr Bradley) had already been working together for 13 years by that stage, and they shared a clear vision of the kind of service they wanted to deliver.


“Our belief was, and remains, that clients do not want a series of financial products. What they really want to know is that everything is going to be all right, and they can afford to live the life they want to without ever running out of money.” (Company website)

It was a tough time to choose for starting a new venture, though. Things weren’t easy for anybody after Lehman crashed in 2008 and the stock markets corrected. But in a curious way, the meltdown provided exactly the right conditions for the refreshing approach that Marr and Sturkey had mapped out for their business. Fees-only, focused on stable outcomes, and firmly on the planning side.

To quote the firm’s website again: “We were able to do what many business people dream of – start again with a blank sheet to build a business for the future using all the latest tools and techniques to deliver a high quality personal service to our clients, providing answers to questions clients didn’t even know they could ask.”


Exactly so. Ms Sturkey is one of the highest qualified financial planners in the UK holding both Chartered and Certified Financial Planning (CFPcm) accreditations, and also a Fellow of the Personal Finance Society (FPFS). She is a regular speaker at various financial planning and business development events.

The Business

What sort of shape does the business have? Wealthy private clients, she says, with a strong emphasis on a long-term relationship.  They do not provide transactional advice. Although many of these people have made their own fortunes in business, TRH doesn’t get involved in corporate work but sticks to what it does best.

And that, for the most part, is helping its  carefully selected clientele see what is possible, discover what is important to them in  life and identifying their resulting financial planning needs.  Once done TRH build a plan to  action what is required to help them attain and or maintain that life.  The plan is then, crucially, reviewed on an annual basis


The Process

The firm’s consultation procedures are very personal and far reaching. Time is spent with the client to understand them and build a picture of where he/she and his/her family want to get to. TRH ask clients to consider what’s important to them about money? What keeps them awake at night? – “ very often people haven’t been asked those kinds of questions before.  ,– Many have been in  the dark, not knowing the questions to ask, let alone get answered and they haven’t been asked to think about nor define any particular goals before.”

Having defined their dreams, the task is “to work out with them the opportunity cost of doing nothing vs the future benefit of taking measurable actions now.” It’s only then that the full financial planning process swings into gear – cashflow models, determining appropriate savings targets, building an investment strategy and looking at any risks that may disrupt their journeys along the way. Life insurance, income protection, making a will, lasting powers of attorneys are all considered,

An integral part of the investment planning process is the risk assessment, the first step of which is a psychometric risk profiling tool.


The TRH risk process consists of five essential stages:

  • Assessing his (or her) emotional attitude toward risk and assessing his personal risk tolerance.
  • Establishing the level of risk that will be required in a client’s portfolio to achieve the client’s goals from the financial resources available
  • Assessing the ‘risk capacity’. How much bad luck could the client comfortably withstand, and are there enough low-risk or cash-like assets available at any time? (Generally, equivalent two to three years’ income.)
  • Looking at the investment horizon time and establishing the appropriate investment term frame for risk.
  • Finding out about the client’s experience of investing – a factor which may well decide what sort of avenue to pursue.

Only then is an investment strategy proposed.

Passive Approach Preferred

The firm doesn’t make any bones about its conviction that active investment styles are for the birds, and that actually they can get in the way of the clients objectives. Instead, says Ms Sturkey, TRH favours evidence based, asset-class investing – or passive investing, to you and me.


“We feel that our job is not to take subjective decisions [on which way particular markets might go] but to take investment decisions based upon long term data and facts.” Does that mean that The Red House doesn’t do advisory portfolios? “We do have a number of model portfolios.  Our portfolios focus on structure and a long term asset allocation relative to a clients risk profile.  The portfolios are then  populated with broadly diversified, best of breed funds that are, low cost, low turnover and tilted towards the academically proven dimensions of risk that are shown to add additional value over time.”

Getting to Grips With Risk

I tried Ms Sturkey with another quote from The Red House’s website: “Only by increasing exposure to risk assets can expected long term returns be improved.” How difficult was she finding it to get that message across to a clientele which could be expected to favour the conservative approach to saving, especially after retirement? And was that something that was finding new currency, now that the coming pensions freedom looks set to open up an unexpectedly wide range of options to many people?

Well, yes and no, she said. Advisors need to spend time with clients to explain the potential investment returns that might be expected relative to the level of risk that they are comfortable with.  Risk and return go hand in hand.  Most clients understand this principle if it is properly explained. But no, it probably wouldn’t be too difficult an undertaking with her own clients with whom they spend considerable time explaining risk and return in detail..

Fortunately, she says, the clients are largely experienced enough to need no convincing that a Lamborghini is no way to celebrate the arrival of April. And the majority, she adds, are more than familiar with the essentials of the flexible drawdown options.

And yet, she emphasizes, “the theory goes that a rational person will only take as much risk as they actually need to achieve their personal objectives.” And a person who has been encouraged to take more risk than is strictly necessary to achieve their objectives may be in the wrong portfolio. All of which takes us back to the importance of getting the risk profiling right, and of making sure that it exactly matches the client’s situation and goals.  Clients need to be educated to understand the possible return ranges from the portfolios in which they invest.

And the Future?

To carry on growing organically, she says. And to retain the focus on holistic financial planning which is the firm’s particular speciality. “We’re only looking to take on clients where we can provide value to their personal and financial lives. Our role is to look after our clients’ money so that they can relax in the knowledge that everything is going to be alright and concentrate on doing the things that they enjoy and care about.”

We can’t argue with that.

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