Q:Pat, I know you’ve had a long career in financial services but how and when did it start? What have been the main changes you’ve noticed in the 20 plus years you’ve been involved?
A: My career in financial services started in 1991. I completed a Business Studies degree and answered a job advert in the local paper, the Bristol Post (Evening Post), for a ‘financial something’. I thought I’m pretty good at numbers so I can do that. I remember getting told off at my interview for wearing white socks.
At the time the financial advice industry was all about product sales which generated commission. It was a rarity to find advisers who charged fees. This has thankfully changed over the years and there has been far more focus on financial planning and giving the right advice rather than on selling products.
However, while the Retail Distribution Review has generally improved the professionalism of financial advice, we’re now seeing an increasing number of restricted advisers, whose business models are focused on selling their own products and investment funds.
Q:With Chase being one of the larger advisory firms in the UK can you give us a brief overview of the business today? How many advisers are there, how many clients does each one typically look after?
A:With most of the larger advice firms now giving restricted advice we could be the largest firm of independent financial advisers in the UK. We don’t have our own products or funds and don’t offer execution-only services. We only get paid for giving independent financial advice.
We have 195 advisers based across 13 offices around the UK. Our biggest offices are in London, Bath and Manchester. We have been making a conscious effort to reduce the number of clients our advisers look after to make sure we maintain the right service standards. The number of clients our advisers can look after is currently capped at 150, but this will be reduced to 120 and many of our advisers look after far fewer.
Q: What about the support provided to advisers? How important is paraplanning for example?
A: Paraplanners play a hugely important role in our advice process. However, so do our administration teams and central service functions such as our research and even our IT teams.
It is our advisers who have the personal relationships with their clients. However, behind them is a strong team who all provide different levels of support to ensure that advisers are as efficient as possible and spend their time on areas where they can add real value and that our clients most appreciate.
Q: What’s changed internally since you joined the business in 2010? What are the key business drivers going forward? What do you think makes Chase de Vere different?
A: When I joined Chase de Vere the company didn’t have the best reputation amongst the industry. I was told by Stephen Kavanagh, our Chief Executive, that going forwards the company would always try to do the right thing for clients and this is exactly what has happened. I believe the employees working for Chase de Vere are proud to work for the company when maybe that wouldn’t have always been the case in the past.
The most obvious example is Chase de Vere continuing to fly the flag for independent financial advice, because this is the best advice for clients, even though we could earn significantly bigger margins by selling our own products.
We’ve shown in recent years that we can be independent, do the right thing and still be profitable. The aim going forward is to grow the business ideally both by acquisition and recruiting more good quality advisers. Our view is that the best advisers want to give independent rather than restricted advice.
Q: So what about your investment strategy? When it comes to the active v passive debate, on which side of the fence do you sit?
A: Our investment approach is based on long-term strategic asset allocation. We have a centralised investment team which is responsible for asset allocation and researching investment funds. We believe that advisers should be managing client relationships rather than trying to decide if fund A is better than fund B.
When managing clients’ investments we don’t try to be too clever. We don’t make big tactical calls and don’t use higher-risk specialist investment funds. We look for funds with a repeatable investment process that we believe can provide consistent long-term returns. While we believe in active management, we also use some passive funds.
Q: Has the vote for the UK to leave the EU had any impact on the business so far or is it too early to tell? Looking ahead, what do you see as the main challenges for advisory firms as a result of it?
A: It really hasn’t. We communicated with our clients regularly in the run up to the referendum, both centrally and through their allocated adviser, and told them to expect volatility. We are continuing to communicate with them now. The result is that our clients are pretty relaxed. In terms of any future fallout, we don’t even know what is going to happen yet.
Q: How do you managed to keep up to date with markets, investment products and economics? It’s all pretty time consuming!
A: This is why we have dedicated research teams who devote their time to doing this. Personally I work very closely with this team and also speak with many external experts.
Q: Many advisers say that they’d like to get more involved in providing comments to financial journalists in order to boost their marketing activities through exposure in national media. As someone who has developed a strong media presence do you have any tips for advisers on how they could do more to boost their media presence?
A:The challenge for advisers is being available. Many journalists are on tight timescales and this has intensified with more and more content now being online, while advisers should ideally be spending as much time as possible in meetings with their clients.
A big advantage I have is that Chase de Vere gives me a large amount of flexibility in managing my working day. This means that I can usually drop what I’m doing and quickly pick up any urgent press requests.
If they can dedicate the time to help the press, advisers need to make sure they are reliable, not be afraid to have a view and make sure their comments are set at the right level for a particular journalist’s publication.
Q: When it comes to the bigger picture, where do you guys see the biggest opportunities for your business and for others too?
Three things spring to mind here:
- While the financial advice industry has supposedly moved from commission to fees, the increasing number of restricted advisers means there is still a big focus on selling products. We believe this is an opportunity for independent financial advisers to highlight to clients the benefits of independence.
- The financial advice process is not all about the adviser. While they clearly have a key role to play, advisers are more efficient and provide a better service to clients if they are well supported by paraplanners, administrators and other central functions.
- We are planning to grow our business both by acquisition and by recruiting new advisers. Whilst an ever increasing number of independent advisers are becoming restricted, we want to get the message out there that there is another option at Chase de Vere for those advisers and firms who want to remain independent.
Q: Work aside, what do you like to do in your spare time? I’m guessing that football might just be mentioned here!
A: Yes indeed. As well as working full time I’m also a single parent to my 14 year old son. His mum moved to New Zealand four years ago and so doesn’t help out. I like most sports which involve a race or a ball, particularly football and I regularly watch the mighty Bristol City. I’m also involved with Mangotsfield under 15s football side, which my son is goalkeeper for.
Patrick Connolly is Head of Communications at Chase de Vere, the Independent Financial Advisers. He is qualified as a Certified Financial Planner and Chartered MSCI through the Chartered Institute for Securities & Investment. He was named as the Unbiased.co.uk Investment IFA of the year in 2013, won the Judges’ Overall Award for Outstanding Contribution in 2015 and is the Tax Planning Adviser of the Year for 2016.
Follow Pat on Twitter – @BristolPat