I recently travelled from London to Chicago to attend a three-day conference hosted by the investment research company Morningstar Inc. The event was rather aptly described by another attendee as ‘Lollapalooza’ for the US investment management and financial planning community. You might laugh at the tenuous link between finance and alternative rock, but to be honest, I liked the sentiment.
With an early start each day (who arranged a keynote speaker at 8 am?), late finishes (drinks with fellow finance pro’s) and a jam-packed event schedule in between, the days were physically draining, mentally challenging, but thoroughly thought-provoking, and for me of the overseas contingent, an all-around expensive journey to boot. But I have a lot of respect for Morningstar and the mission they are on to put #InvestorsFirst. So the conference had benefits way beyond the obvious and it really didn’t feel like work to me at all. On my return to the UK, I felt motivated and focussed on the challenges of owning a financial planning business, and putting into action my new discoveries and best practices to help our clients meet their financial goals.
Who’d of thought I’d feel passionate enough about ‘Financial Planning’ to travel 8,000 miles round-trip, voluntarily out of my own pocket. How did it come to this?
“Who’d of thought I’d feel passionate enough about ‘Financial Planning’ to travel 8,000 miles round-trip, voluntarily out of my own pocket. How did it come to this?”
At the beginning
At the beginning of 1995, when I started out as a ‘Financial Adviser’, I’d finished university with a degree in Financial Economics and I had little idea as to what I truly wanted to do. I’d attained a qualification that would get me started in banking or stockbroking somewhere but sitting here now I consider myself very lucky not to have gone down either of those two routes. Luck rather than judgement means that financial planning is a rather more respected profession today than what could now be described as the faceless commodity that is banking and stockbroking.
Back then a chance encounter led me to join a financial product provider where I could train as a ‘financial adviser’. I’d originally seen the opportunity as a stepping stone to something else, without any real belief that I’d grow to love doing it some 20 years later.
What started as a job, turned into a career that allowed me to meet a diverse range of families, helping them save towards their life ambitions and financial goals. Financial advice also allowed me to become a joint business owner and shaper of my own destiny, with a work/life balance today that I’d be hard-pressed to give up for anyone.
But like many people early in a career, I made and learned from my mistakes (tech bubble anyone?) continuing to improve with time, qualifications and experience. Crucially, I kept to my principles, sticking to what I believed to be the right thing to do for people, regardless of what might have been more profitable. It might sound like a cliché that all advisers use, but I really did want to act in the best interests of the clients. Personal satisfaction, the respect of others and pride for a job well done motivated me. Was I alone in this? Of course not. There are thousands of great and highly principled advisers out there, but in the past, they got drowned out by the negative noise.
To put this in context, prior to a regulatory change in 2013, financial advice in the UK was trapped within a commission driven model of product sales and high commissions that were too tempting for many. It was difficult for the client to assess when an adviser was doing the right thing and incentives were all in favour of the firm. Providing advice paid for by the recommendation of a financial product with an 8% commission instead of the correct lower alternative, or nothing at all if truly fee-based, meant who’d know right? But ultimately the clients did pay even if they didn’t see it and I was never comfortable with that. My heart would sink, and I’d get angry when I met customers of high street banks who’d been sold unsuitable investments with 8% initial commission deductions. These were good people who’d worked hard and been duped by supposedly trustworthy brands. Standing in the queue at the bank (an old concept I realise) listening to bank tellers recommending investments to customers on a whim, made painful listening.
The most recent ‘Financial Crisis’ and its aftermath coincided with the birth of my children in 2008 and 2010. It was a time of great personal change. We’d moved to a bigger house, my wife wasn’t working, and new business was inevitably slow at the time. It would not have been unrealistic for me to seek a secure role at a large firm if possible (something I seriously considered), or even leave the profession completely. My wife was worried, and she even told me that ‘maybe I was too nice to be a financial adviser’.
But times were changing and investors who’d been let down during the crisis started pushing back. And with increasing financial transparency and extensive regulatory change on the horizon, slowly but surely financial planning and advice were changing for the better. New qualifications were set as standard, commission on investments was eventually banned and those who were not committed to providing high standards for their clients were slowly beginning to leave under the increasing pressure.
A new dawn
So, I didn’t quit. Better, exciting, client-focused times were coming, and I wanted to be a part of that. In 2010 we rebranded our firm name to Bunker Riley Financial Planning to display our personalised, accountable relationship with clients. We already knew and understood that we were being trusted to deal with people’s lives, goals and hard-earned savings and we wanted to put our name on it. Over the years I’d always endeavoured to change client perspectives on what they thought a financial adviser was, and to do that we always needed to put client best interests at the centre of our relationship.
As early as 2006 we’d dabbled with charging our client’s direct fees on the basis that it allowed us to give them better solutions, including the use of non-commission paying products such as index tracking funds. That’s a given these days but back then it took some explaining. It wasn’t the norm and it wasn’t easy to compete against the ‘free’ advice from commission paid advisers, but the right clients got it, and many began to benefit from an early stage.
Having committed ourselves to ongoing development through structured learning, extensive reading, regular engagement with the financial profession and annual attendance at the right events to keep abreast of relevant key issues, we come to work every day with the sole purpose of helping make our client’s financial health better than it was the day before, consequently changing the perception of the financial planning profession for the better.
“We come to work every day with the sole purpose of helping make our client’s financial health better than it was the day before, consequently changing the perception of the financial planning profession for the better.“
There are numerous ways for us to do this, but it can’t be done without a client-focused mindset.
Discovering and developing our purpose over the course of 20 years has taught me to grow to love ‘Financial Planning’. And as a result, making an 8,000 mile round trip to Chicago was well worth the time, effort and expense just to be part of it all.