St. James’s Place – what are the most common issues faced by financial advisers in 2022?

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  • 43 mins 29 secs

Learning: Structured


  • Warren Page, Recruitment Director, St. James's Place
  • Eddie Grant, Director, Technical Connection, St. James's Place
  • Andrew Cullen-Jones, Director of Business Development and Advice, St. James's Place
  • Adrian Speed, Head of Partner Finance Consultancy, St. James's Place

Learning outcomes:

  1. Understand what it really means to be a restricted adviser
  2. Understand how advisers can use technology to support their clients, as well as demonstrate their support for vulnerable clients
  3. Understand what’s really driving business valuations and how you can ensure great client outcomes

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Channel: Business Development
St James's Place
Tel: 01285 640302
PRESENTER: What are the top concerns for advice professionals right now? Here to answer that question I’m joined by experts from St James’s Place. With me, today, I have Warren Page, Recruitment Director; Eddie Grant, Director of Technical Connection; Andrew Cullen-Jones, Director of Business Development and Advice; and Adrian Speed, Head of Partner Finance Consultancy.

So, starting with you, Warren, you speak to a lot of advisers, what are the top concerns and themes that you are seeing?

WARREN PAGE: Yes, great question. I mean to put that into context, I’m proud to lead the largest recruitment acquisition team in UK wealth management, so you can imagine as a result of that we’re having tens of thousands of conversations every single year. That gives us a brilliant insight into what are both the short and longer-term thematic themes, concerns that advisers are facing into.

I think in the short term I would say obviously the COVID pandemic that we’ve been living amongst in the last couple of years has been one of the big themes that’s caused an issue. But during that process I think it’s about how to deal with clients, how to work with clients remotely, how to acquire new clients, which is important to lots of businesses, and equally how to navigate the support that’s available. I’m sure we’ll touch on it later but we’ve had a very contrarian approach to technical support that we’ve provided to advice professionals, whereas we’ve seen shrinkage in the rest of the market and as the world has become more complex and trying to do that remotely has been a real challenge for many.

But in the longer term I see there’s challenges in the PI market, PI efficacy in terms of its ability to still protect businesses, whether that might restrict some of the areas of advice they can operate in, and then I think longer term is around, you know, if you’re a business owner, having an elegant exit strategy: being able to walk away from that business, your clients are looked after, you know, if you’ve got staff working for you that your staff are looked after and that you get a fair price and value for that business.

PRESENTER: So was there a notable shift then when we had the pandemic in terms of what people were asking about?

WARREN PAGE: I think certainly from my perspective in terms of facing externally, it was really around people were struggling I think quite rightly looking after the clients they already had. That was important to them; that’s the lifeblood of their business. So they needed to get round to those clients and look after them effectively. And navigating things like Zoom and Teams that now seems commonplace that was new to us just a couple of years ago, so I think that was a big struggle. And equally one of the aspects that we saw was actually to be able to transact with clients remotely as well. Things like, you know, that again we see fairly commonly today which is around using electronic signatures and so forth, we know that some firms found it really difficult to embrace that change quickly enough to enable them to work with their clients efficiently.

PRESENTER: I guess it’s a question if they had that set up before, isn’t it?

WARREN PAGE: Well hindsight’s a wonderful thing when it comes to technology.


ANDREW CULLEN-JONES: But I think what we’ve seen is, one, clients really value the long-term relationships advisers have had with them through turbulent times, including the pandemic, and I think the second thing is the step change, as Warren says, in use of technology, which has I think transformed some advisers’ business obviously for the long-term, but making that advice process easy, making use of digital signatures, restructuring trust forms so they can be used in that way, using the likes of Zoom to keep in regular contact, which doesn’t require driving 30, 50, 60 miles to see clients face-to-face. So I think there’s been a step change in support that advisers are able to provide their clients and that’s here to stay.

PRESENTER: And, Eddie, coming to you, so from a regulatory and technical perspective, what issues did you see?

EDDIE GRANT: I think, as the guys said, the key is that all of a sudden if you’re an adviser, you were seeing maybe one or two clients a day. Now you were seeing three to five clients a day. So the sheer volume increased dramatically. And also what we saw was a lot more housekeeping. So actually I think people have had time to reflect and it’s actually got them thinking about what their requirements are. So from our perspective that was a really big shift. So we went back to basics with a lot of simple, basic but fundamental planning. And a lot of advisers, they were able then to work with clients, and it then stimulated other conversations as well, so I think that was a key thing.

The other thing that was really important during this period is there was a plethora of government support, and navigating your way through that was absolutely key, and as a company what we did, we took the Chancellor’s words ‘whatever it takes’ and created our own document which summarised all of that information, and we circulated that across whoever wanted to read it. And for us I think the key thing was to ensure that people understood how they could get help and then obviously how we could help them as well.

PRESENTER: And I guess on that kind of changes, we have had the new Consumer Duty regulation, how are advisers reacting to that?

EDDIE GRANT: So that’s really interesting. Because I think when the regulator publishes documents, I don’t think a lot of the small firms have time to read those documents, so it’s firms like ours that spend the time, have teams of people that go through the documents, and I’m sure Andrew will touch on what he’s been doing within his team. And I think the key therefore is what we’re seeing is that the regulator really wants to put a focus on all the things they’ve been trying to do and in particular for my world around vulnerability. And actually this is probably as we come out of pandemic, the focus on how people are being treated and what’s fair and what’s not fair were having increasing focus. And I know, Andrew, you’re finishing the report at the moment.

ANDREW CULLEN-JONES: So, first of all, the Consumer Duty, it’s still in consultation stage at the moment. So final rules haven’t been published, but I think everyone would expect it to pretty much look and feel how the consultation has set it out to be. As Eddie said, I have a team of people that look at some of these documents and there’s a fair bit of reading. I think it’s on the broad-

PRESENTER: They’re quite long these documents, aren’t they?

ANDREW CULLEN-JONES: -of 200-odd pages of consultation paper and rules at the back that I think probably double it in length. Just taking a step back I think the one thing that I think is encouraging actually is the FCA is looking at this from a principle perspective, rather than necessarily really detailed rules that probably are potentially detached from the end client experience. So from an adviser perspective, I think if you’re looking, if you’re a client-centric advice firm, there’s probably not a lot to be concerned about, but there is a real requirement to evidence some of those things, and that brings additional I guess regulatory responsibilities that probably take time for advisers away from spending time with their clients and more ensuring that their business is meeting the regulation, and that’s where, as I say, some of the support that St James’s Place offers advisers can really come into its own. It allows advisers that join us to spend most of their time with clients, relying on the teams of people that sit in head office to help take some of the strain of ensuring they’re safe and compliant and meeting rules and regulations.

PRESENTER: And I guess one of the other keywords is value that’s come out of that. How much of a new idea is it for advisers to demonstrate the value?

ANDREW CULLEN-JONES: I think the demonstration of value on an individual basis is really strong, and what you see across any research that from a client perspective they value the advice they get from advisers, and that’s across the industry. Whether it’s a St James’s Place partner or elsewhere I think the value of advice, it’s a fairly easy demonstrable for the clients that receive it. And, as I say, you see that from all elements of surveys around clients of advisers. I think demonstrating it is a bit more of a challenge at a firm level. We have some experience of that because other parts of our group have had to produce value assessment statements, and because we work throughout the value chain, that incorporates some aspects of the value and advice, so we’ve had I guess a precursor for some of those things, which will be new to directly authorised firms certainly in the advice space.

PRESENTER: Warren, you’re nodding as well. In your conversations, is this worry about demonstrating value, is that coming up?

WARREN PAGE: It is certainly at business owner level and I think just we’ve touched on regulation, just on one aspect of it, but increased regulation I think is something that’s playing on a lot of business owner minds, from our experience. You know, not just the regulation itself, but the increased cost of regulation. And I touched on PI earlier. We’ve seen a dramatic increase in the cost of professional indemnity insurance across the marketplace. Even for brilliant businesses that are very clean with great advice track record, they’re still seeing significant increase in their professional insurance indemnity cover. And I think that’s driving a requirement to either retract in some areas of advice, and we’ve seen that where some firms have decided to stop getting in some of the what they perceive to be riskier areas of advice, like defined benefit transfers, EISs, VCTs, etc. and retract either through their own choice or through their PI insurers saying in actual fact we don’t want you operating in that area anymore.

ANDREW CULLEN-JONES: And just building on that, Warren, I think the latest FCA stats suggest that there are over a thousand firms that have given up permissions in terms of defined benefit advice. And I guess the dynamic of pure economics between PI cover, either because of the cost of it or even being able to obtain it, has driven some of that, as well as the heightened regulatory scrutiny on that area of the market. When it comes to our own business, that’s an area where, as the largest advice firm in the UK, we need to make sure that we can provide access to advice to our clients. And our clients need advice on DB pensions. That’s a common area, particularly those who have got significant assets across the board, and it may well be the right advice to consider a transfer. So it’s one where our scale and our checking and business assurance function can really provide some comfort about giving the right controls to make sure the advice is right in those parts of the market.

EDDIE GRANT: I think it’s also really interesting, I sit on the third party product group that we have, and when you think about due diligence nowadays, you’re looking at whether they’re a responsible business. You’re looking at how they manage data, you’re looking at so many different things, and so you just wonder how a smaller firm can actually do all of that due diligence in the detail and maintain that, because it’s the maintenance. It’s easy to send that report out once to ask for the information, but then you need to keep checking all the time. And I think that’s a real challenge for advisory firms and you probably hear that all the time.

WARREN PAGE: Yes, most definitely.

PRESENTER: And coming to you, Andrew, so I know, Eddie, you mentioned earlier that some advisers now, rather than speaking to two clients in a day, they’re speaking to five clients. Which I know we talked a lot about problems, obviously to me that could also be opportunity. Are you seeing advisers want to grow their business in this time and in what way?

ANDREW CULLEN-JONES: Yes, I think so. So within our own business we have two and a half thousand partner firms. And to be honest those partner firms are reflective of the broader advice industry. So, as you would expect, within that there’s a range of different businesses of different maturity and at different stages of their development. So we absolutely see businesses that are keen to grow. Equally there are others who are comfortable looking after a client bank that’s of sufficient size that meets their own personal lifestyle requirements, but I think in aggregate what we’re seeing is businesses seeking to grow. If you take a step back and look at the supply of advisers in the market, it’s still stubbornly low post-Retail Distribution Review, and if you look at the demand for advice, the factors that push that, increased flexibility in retirement, so pension freedoms, a growing requirement for individuals to take responsibility for their own finances rather than on the state or employer, complexity around tax treatment of pensions, complexity around inheritance tax or Trust Registration Service, all of these factors are driving increased demand for advice. And therefore for those firms that have got the right proposition, the opportunity is absolutely there to expand. And I guess for those firms, what they’re really looking to do is seeing actually can we go and recruit high quality advisers or train high quality advisers within their advisory practices to meet the demand for that growing need for advice.

WARREN PAGE: Yes, just to pick up on a couple of points there, and one of the things that I often talk about, it’s a question I’m often asked is what’s the core client size of St James’s Place? And our typical client is a client between 50,000 and five million in investable assets. Obviously we have clients with smaller and larger assets than that. But if you take that core client base or potential client base of 50,000 to five million, there’s over 12 million individuals in the UK currently with that size of asset. Now we know that an average adviser with a good support mechanism around them can look after 150 to 200 clients, you know, maybe less if they’re dealing with more complex clients, maybe more if they’re less complex clients, but if you take that average, that would suggest that we’ve got less than half of the advisers that we need in the UK today just to deal with that size of population. And I think that’s one of the challenges that I see in many of the businesses that we’re engaged with is that they would like to grow, but without having new advisers and new blood coming into their businesses and the limitations of supply of good advisers in the marketplace is meaning that they’re hamstrung to grow as fast as they’d like to. I think the age demographic as well of the advisory world, you know, as picking up on Andrew’s point, some of those businesses are at that stage where they’re in the maturity and looking to exit rather than looking to grow.

PRESENTER: Well I think on that note, Adrian, I haven’t forgotten about you, so for advisers who want to exit their business, what are some of the challenges you’ve seen in the last 12 to 18 months?

ADRIAN SPEED: I think there’s a number. I think we shouldn’t underestimate the complexity of a business and what goes on today in a financial advisory business. They could trade as a limited company or as a sole trader and therefore advisers need to think about that as they think about the challenges that lie ahead. It’s also interesting when we think about advisers day in, day out are advising clients about what their future plans will look and feel like for retirement, and we’re finding advisers are no different in that space. It’s important they think about what their exit plan is going to be and succession plan for their business. I guess there’s three key themes for me. I think first and foremost we see a lot of advisers who don’t necessarily plan their own exit properly, probably over 75% of advisers won’t have a plan.

PRESENTER: I was going to say is it sort of a panic, they get to a certain age and it’s like OK I need to retire, what’s the plan?

ADRIAN SPEED: Correct. And we see a lot of that. We see people who think right I’m now ready to go, a business that’s been running 20, 30 years plus and looking to think about well exit within say three or four months, you know, the two don’t connect. There’s other things there to think about within the business. It’s not just moving the clients on, which I’ll come onto, but it’s also thinking about the tax and the legal implications of selling a business ultimately. But other areas there to think about is how a business is valued, you know, a business can be valued in various ways. It could be a multiple of ongoing advice fees, it could be a multiple of profit and how profitable that business is, or it could be purely a percentage of the funds under management that an adviser has, but how do you manage and how do you actually value the business.

Other things to think about as well and perhaps the most important is around client outcomes, you know, clients are invested in adviser business. More often than not, businesses are built around friends, family, close associates, and these people have been loyal and been with advisers for a number of years. How are they going to feel as they get moved on, what is that going to look and feel like? So client outcomes is key in making sure that that transition goes forward and that’s not easy for some people. It’s quite an emotional time as to how they hand people over.

ANDREW CULLEN-JONES: I think that lens of the client perspective on this is really important and one where having an advice firm that can ensure that continuity, having guaranteed the advice from outset, means that when the clients are transitioned from one advisory practice to another, they still have that consistency of the right advice underpinned by a FTSE 100 firm that means some of the other challenges that might exist when a practice or an adviser retires or the principal retires can get managed in a more consumer friendly way.

PRESENTER: And, Adrian, we will come back to all of this in section three, but just quickly if three to four months isn’t the right time horizon to start looking at your retirement plan, what roughly is the right time horizon?

ADRIAN SPEED: For me, it’s a range between three to five years, looking that far ahead, if not further, but three to five years is a good sweet spot. Have a plan. A plan will always change. And it can change and that’s the beauty of having a plan. It’s the art of changing that plan as you go through, but to have a vision over the next three to five years. The same as you would do as you start to think about your own retirement in day-to-day life. As you get into your mid to late 50s, you’re thinking I’m probably going to retire in my mid-60s, so it’s on the horizon at some point. And it’s the same principle applies when selling your business, you can’t think early enough.

EDDIE GRANT: And if you’re thinking about the next generation of adviser and you’re thinking about diploma and the journey to chartered, then that time horizon is absolutely spot on. Because you would need, even if you were diploma qualified, you’d probably need 18 months to two years to get to chartered, and that’s something that we’ve spent a lot of time doing is helping the advisers to build their team up, so build their knowledge up. We’re now a community of over a thousand chartered individuals, so it’s the largest community in the UK. And it’s all the time encouraging the next generation to want to go further, to want to learn more, and actually open up new markets as well, because the other advantage of that is your business that you’re thinking about selling starts to look into new marketplaces becomes more valuable as well. So it’s a complete package I think with what we’re trying to do.

WARREN PAGE: And just picking up on that time horizon, over the last few years my team have been involved in a significant number of building that exit strategy for somebody. So we’re approached and saying that in actual fact I’d like two or three advisers to come into my business to ultimately be a management buyout of that business at some stage in the future. And that’s what we’re able to do because that’s an exciting opportunity to present to somebody to say look there’s a wonderful opportunity here to buy a business in the future, you’ll get to know it for the next two or three years, get to work within it. And that’s a great experience for the client as well because they get the continuity of getting to know the people that are going to ultimately take over that business.

PRESENTER: We move now to section two is what does a restricted advice business look like? So I’m going to put that question to you, Warren, what does it look like?

WARREN PAGE: Yes, that’s a great question. I think if you strip it back, what do we mean by restricted? And when that term first emerged in our profession, the word seemed that it was very narrow. And I think at times it was narrow when RDR first emerged. What’s happened since then is that the interpretation and the understanding of what that means is that it’s created a much wider opportunity. Because if you strip it right back, restricted means that there is an element of your proposition of advice or products that’s restricted. In actual fact we don’t see our advice as restricted at all, and I’m sure Andrew will touch on it later, but we take a whole of market approach to selection of fund managers right the way through to selection of other external providers. But what we then do is we work that out in terms of what we believe are the best of breed in the marketplace.

But there are benefits and disadvantages to both. Because being an independent adviser you have the advantage of being able to look at everything, but what that brings with it is the requirement of due diligence and inspection and ongoing review of what that product, what that offering is to your clients. Whereas that responsibility is taken away, certainly within St James’s Place where we have a central team that does all of that. You’re then monitoring an ongoing due diligence, not just at outset but ongoing due diligence of anything that’s provided as a product as a result of the advice that’s given to a client.

PRESENTER: And when we say restricted, is that purely about investment?

WARREN PAGE: No, it’s not, no. And it’s actually more around the wrapper than the actual content within that wrapper. So, if you take for argument’s sake protection or mortgages, then we adapt a whole of market approach, because we’re not the manufacturer of those products. We don’t want to be, we don’t choose to be, so we tend to partner with the best in the marketplace.

PRESENTER: So how does St James’s Place decide what is on the panel and what isn’t?

ANDREW CULLEN-JONES: We look at it in the same way as any firm would look at it, be it an independent firm or a restricted advisory practice, in that we’re looking at the whole of the market to get the right client solutions. As Warren mentioned I think we’ve probably got a reputation for being a restricted advice firm and regulatory, that’s exactly what we are. But when you unpick some of the breadth of proposition that partners have available to them to give their clients it feels that restricted is possibly a term that’s misrepresentative of that. And when you look at I think our investment proposition, the key focus around that is looking globally at what the right solutions are. And, yes, it’s within a St James’s Place fund and that’s the label that comes on the tin, but ultimately our investment team are looking around the whole of market to find the best fund solutions for our clients. And that applies actually across the full breadth of advice. We profess to be the largest advice firm with the broadest holistic advice proposition.

So Warren touched on protection, mortgages, annuities, equity release obviously. We have a range of third party products that work in that sphere. Equally, around our advice offering, partners of St James’s Place can work in all areas of advice, be it around the defined benefit pension advice or certain tax advantage schemes, where they might find that difficult in a directly authorised environment for the reasons Warren set out around PI cover. When we’re looking at those propositions and I think this again is something that we’ve done on a number of occasions is actually with the brand of St James’s Place we have the opportunity to open doors at some of the key product providers of protections, insurance and so on, and actually have created products working in tandem with those third party providers that are specific to St James’s Place and specific to client needs where we see an opportunity in the market. And I think that’s something that comes with I guess having an offering for four and a half thousand advisers within the UK that means that product providers will listen and work with you to design client-centric products that maybe is more challenging for smaller directly authorised firms.

EDDIE GRANT: I think the other bit that’s probably worth pointing out is if you’re an adviser you often have a speciality and therefore your client may come to you about something that you don’t actually do on a day-to-day basis. So one of the big advantages is we have a community, there’s always someone who’s a specialist in any particular area. And so therefore within the group, also keeping the guarantee as well, you can refer. And lots of partners, for example, don’t do long-term care, but they refer to one of the care specialists that we have. And so therefore it works really well because they’re all part of the same group. And I think that that’s harder to do if you’re a small firm, you’re only as big as the number of people in the speciality in that particular company; whereas, here, there’s lots of interactions between the different partners.

PRESENTER: Finally, just coming back to the panel, how often would St James’s Place review the panel?

ANDREW CULLEN-JONES: So that’s done continuously. So obviously on the investment side of things we monitor that daily. We have a whole team of investment specialists that are looking right through the lens of the funds, the underlying stocks and ensuring that the fund managers are working to the mandates with which we set. When it comes to some of the third party products and services available, Eddie referred to this, I think he sits on the governance committee that oversees some of that, but the level of due diligence at outset and then the regular monitoring of that is a key part of St James’s Place taking responsibility for the advice it provides on those things. And we touched on Consumer Duty earlier. One of the things that the principle around Consumer Duty is bringing is a requirement to look through the whole value chain of the client. And that’s something that for certain asset managers might come as a new surprise because they’ve got to look all the way through to the advice potentially element or on D2C platforms, but equally for advisers it starts to look and say actually are we really confident that the services and products that we’re offering advice on are fit for purpose, are right, have done the right due diligence checks and the right solutions for our clients.

PRESENTER: And Eddie, you touched on it there briefly, but what are some examples of where advisers might want technical support?

EDDIE GRANT: So we last year answered just over half a million technical queries last year. So, without any doubt, the biggest supplier of technical support in the marketplace, and what we’re seeing is a number of things. As we came out of COVID, there was lots of questions around that. We saw, for example, that changes within taxation. There was a case called Silver where it looked at chargeable events on investment bonds and that changed the way the calculation was done. And it’s still probably the biggest question that we get asked. What we are seeing now is the Trust Registration Service where there is a requirement for trustees to register their trust by September 2022. That is now becoming the big issue for a lot of advisers and trustee clients. Because they need guidance, they need help. We are putting in place a lot of support, a lot of guidance to ensure that the trustees who are clients of partners within St James’s Place have that help; otherwise if they don’t register then they will be fined. So it’s a real obligation to try and help people to meet their requirements.

WARREN PAGE: I’ll just pick up on another point is we focused very much on advisers, but in actual fact there’s as big a community of paraplanners out there that are supporting advisers, and they need somewhere to go for technical support, it’s not just the adviser themselves, and that’s where I would imagine Eddie would probably confirm that a number of those queries that are being answered are actually from the paraplanner building that advice documentation that’s supporting it.

EDDIE GRANT: Yes, so when you go, you look at the half a million answers, that’s through helplines, and you’re absolutely right, the paraplanner needs someone to talk to. Often what we find is people actually do know the answer. But what a lot of advisers and paraplanners want to just do is check that they do know the answer. And I think the biggest challenge in the open marketplace is who do I call, who do I speak to? So being able to connect with a helpline or email or live chat facility is really important. The other thing that we do is a service called the mezzanine service, where the adviser will send us a file note before the meeting and schedule an hour call with us to talk through that case. I’m not aware of anywhere in the marketplace where you can access that sort of level of support across a whole wide range of technical areas. And I think it’s really important having someone to talk to just to check what you’re doing is the right thing for the client.

ANDREW CULLEN-JONES: And I think building on that, Warren mentioned it earlier, but if you look at the broader industry, obviously the technical support offered by what was historically product providers has slowly been pared back, so that on the counter side for St James’s Place has been an area we’ve been investing in and providing more support, like the mezzanine service that Eddie referenced, we run roundtables, webinars, alongside some of I guess the self-service benefits that a lot of the rest of the industry have moved to.

PRESENTER: And coming to you, Warren, on a slightly different topic. So if an adviser is say running their own business for example, they might be worried about losing their culture if they joined a restricted business, how can they keep that culture? And can they?

WARREN PAGE: Yes, that’s a great question and one my team often face into. Andrew mentioned earlier that there’s two and a half thousand businesses that make up the partnership of St James’s Place and every single one is different, different trading style, different name above the front door, and equally many of them operate in different marketplaces: some operate in corporate marketplaces, some in high net worth, some with the mass affluent, some in very specialist markets as well. We’re not looking for clones. That’s one of the things that is really important to us is that you can join the partnership and retain that culture, because I know having run businesses in the past that building a culture in your business takes time. It takes energy and it takes commitment over many, many years. To suddenly lose that overnight would be the wrong thing. And that’s really where from our perspective the culture of every single business is important. All we try and do is amplify that business with a support infrastructure that enables them to focus more time with their clients, more time with the people in their business and actually help them even enhance that culture that they’ve been working hard on over many, many years.

ANDREW CULLEN-JONES: And just building on that, Warren, we’ve touched on this a number of times already, but ultimately the role of the St James’s Place employee and I have 300 of those within my area that are all geared towards supporting partners deliver great advice to clients. That’s the ethos that surrounds the employees. It’s supporting the partnership, the partners to run the businesses and be the best place for them to run and grow the businesses in the way they want to. It’s not clones-

WARREN PAGE: Absolutely not.

ANDREW CULLEN-JONES: -and therefore that two and a half thousand business community is very diverse in a number of factors.

PRESENTER: And I’m interested maybe for that more entrepreneurial personality type, if they wanted to grow into a new area of business, what does that look like?

ANDREW CULLEN-JONES: Yes, so I think Eddie referenced this earlier, but the sheer breadth of offering we’ve got in terms of holistic advice, be it around equity release, defined benefit pension transfers, from long-term care, from inheritance tax planning, that some advisers might specialise in certain areas, but ultimately the breadth of proposition from an advice perspective and then, in cases where it’s required, the breadth of proposition from a products and services basis is there essentially to fulfil I guess any advisers’ need in terms of supporting their client.

The one caveat I would say is we rightly I think stick to mainstream financial planning; we don’t look for slightly edgy, aggressive tax avoidance schemes or anything else. We’re in the market for giving mainstream fantastic financial planning advice on a holistic basis, and I think that gives advisers and partners the freedom and flexibility to work within that remit, either by focusing on certain areas themselves or, as Eddie referenced earlier, being able to work with other partners within the group to hand off to specific areas of advice if they’re not a specialist in their own right.

EDDIE GRANT: And a big area at the moment, if you take goals-based planning, because that’s quite interesting, you get some advisers that just don’t do goals-based planning with cashflow planning tools and you get others who are quite evangelical about it. Within the partnership we have the whole spectrum. And we’re trying to in that particular area help them create their own identity, and we have a number of groups of partners that are working together to develop different types of themes of goals-based planning, and we’re not forcing them to go down a particular route, because it’s actually very personal to the style of advice. And that’s a really good example of how we don’t create any clones within SJP, it’s a very personal approach in terms of your own financial planning firm.

ANDREW CULLEN-JONES: I think, Eddie, you reference that, but the proposition for the adviser is broader than just the advice area that they can advise on, it’s the technology infrastructure that’s available to them again. And again our ethos here is being the best place for a partner practice to grow and develop their business. And that means that there isn’t a one size fits all technology solution. Partners of our own, we have a couple of goals-based tools that are available, Voyant and OPAL, but actually there’s flexibility to work within that. And personally goals-based planning isn’t just for me a technology solution, but I guess the point is that this breadth of proposition covers all aspects, not just products and services or advice areas.

WARREN PAGE: I think the other thing that I see, and coming back to your point around entrepreneurs wanting to develop and grow I think it’s brilliant that we’ve seen a move towards chartered status, and Eddie referenced it earlier, but what I see as I think certainly in some of the individuals that we are engaged with is that they’ve got this very broad qualification but a very narrow opportunity to apply it. And I suppose the fear is that if you’re not applying what you’ve learned, you’re going to lose that knowledge fairly quickly. And that’s where I think we talked about breadth of proposition, that’s where, particularly around advice, I think that’s where you can, particularly if you’re chartered and we’ve got many fellows as well, where you can actually not just have that qualification but actually use the bandwidth of where that allows you to give advice.

PRESENTER: We move now to section three, which is exiting your business. So coming to you, Warren, what is the average age of advisers in the UK?

WARREN PAGE: So what we see as the average and it’s believed to be 58 is the average age of the adviser in the profession at the moment. That’s actually different in St James’s Place. The average age of the partnership is 48. And in actual fact where we’ve been building new advice professionals through our academy over recent years actually the average age of an academy graduate is 34. So we’re actually building a much more youthful advisory profession that will not only fuel the profession with new advisers but also will be the future buyers of businesses in the future.

PRESENTER: And coming to you, Adrian, so if an adviser did want to exit their business, what are the first things that they should do?

ADRIAN SPEED: I think one of the first things is create a vision in their own mind, start with the end in mind and work out what that looks and feels like, project forward three to five years’ time, what do they want to see happen. And start to think about what person they want to see as their successor, you know, be it a person or a group of people as their successor, and also think about where will they find those individuals as well. So where we’re best placed, we’ve talked about the size of our business and the number of people who are looking at succession plans, Warren’s just alluded to 34-year-olds coming through, the average age of our business being at 48, my point being is that we have people who are here for the longer term and we have businesses and client banks where there is a natural marketplace forming within to ensure that we provide that continuity and provide that succession plan.

So it's very much a case of create that vision, understand what that’s going to look and feel like, and most importantly what do they want it to feel like for their clients, and start to think about involving their clients in some of those decisions as well. It’s like I mentioned earlier these people have been very loyal and they won’t necessarily be looking to stop receiving financial advice in the next five years, so we want to make sure that they’re going to get looked after. So clients are very important as part of this decision-making process.

PRESENTER: And what do they need to do to make sure that it’s sellable and see it as that sellable business?

ADRIAN SPEED: Client servicing is massive and quite rightly so. So for me this is around ensuring that as an adviser they can really demonstrate that they’ve delivered a robust and powerful client servicing regime. Not only that they’ve been able to deliver it, but they’re able to evidence it. And how they evidence that in terms of recordkeeping, these things are all very important. And give an adviser coming in as a successor comfort that clients are being well and truly looked after and ultimately will all form part of the handover as well, because the handover process is very important and done really well a handover plan is something that can take quite a bit of time as the clients move from one adviser over to another and that’s a very important thing to do. Done badly, fall off a cliff edge, let the clients go and not let them know that you’re going and that can drive a really poor outcome, especially from a client’s perspective, who’ve invested hugely over the years. So their handover and their view is a very important consideration.

PRESENTER: So, as you’ve mentioned, it can be quite emotional leaving the clients. What steps does St James’s Place take to make sure that those clients are looked after?

ADRIAN SPEED: So I guess there’s a couple of things here. One is the size of the business. You know, two and a half thousand plus partners, four and a half thousand advisers, so there’s a wide breadth, a broad church of individuals who are able to support advisers as they look to exit and provide advice to clients. So we’ve got that marketplace but more importantly that supply to meet the demand of our clients. And secondly is the handover plan itself. Handover is so important and we’re well-versed in this. 10, 11 years ago we were doing say 50 transactions, last year alone we did over 1,000, so we’re well-versed in helping business owners provide a robust plan to help hand clients over at an appropriate time and smooth that transition as advisers look to execute whatever their plan is and there’s a number of options open to them.

PRESENTER: Eddie, what exists to make sure that clients get the same technical and regulatory support?

EDDIE GRANT: So a lot of advisory firms know Technical Connection in the wider marketplace and buy services from us. They also have access to our podcasts, and they’re freely available, where we talk about the technical aspects and vulnerability and research that’s going on at the moment in the wider marketplace. So we have a presence. So when a partner joins St James’s Place, they get access to all of that information as part of being in St James’s Place. So they’re not charged for that as they would be in the marketplace. Also, there is a much richer set of services as well. So in fact by joining your clients are going to have access to mezzanines, roundtables, the helpline, all of these additional services, which we simply can’t offer in the wider marketplace, are available to partners in St James’s Place. And I think we are going to run an offer for Techlink - our knowledge management tool - so that anyone who’s interested can really get to see what we do and have free access for a period of time.

WARREN PAGE: I’ll just pick up on another point and pick up on what support is available. I think the Technical Connection offering that Eddie’s referenced many times, I’m not sure the client actually sees that because their relationship is with the adviser. And if you think about a transaction with a business sale, you’ve got a buying adviser and a selling adviser, so there’s support to both and that’s, I know Adrian touched on that before, but I think what’s really important for us is providing support to the buying partner as well. Because they’re inheriting a number of clients, some of which might be having advice areas that they’re less familiar with, and that’s where we can showcase that to them right on day one and they can go in actual fact I probably need to pick the phone up to Eddie’s team and speak to them about these three clients within this portfolio because I’m less familiar with the advice area. And that’s that mutual due diligence of making sure that both, it works for the selling partner, it works for the buying partner, and we’ve already touched on the fact that it needs to work for the client as well.

PRESENTER: And, Adrian, just finally on what it looks like, so is it a staggered retirement or is it one week there, one week gone?

ADRIAN SPEED: It can be. It can be a staggered retirement and I guess that’s something that we actively encourage. But there’s a number of ways of doing this. People will phase their retirement over time and just gradually and slowly downsize and slowly move clients at the appropriate time with other advisers. We also see people with a fixed date and therefore they will target a particular date in time. But it doesn’t necessarily mean to say they want to hang their boots up straightaway. They might bank their business into another business and stay on for a period of time to ensure that those clients are handed over and embedded into the new business that they’re going to. Yes, people will just retire in full and arrange to stay around for a period of time to ensure that handover and, to Warren’s point, if there are any potential challenges in there, making sure the right people come in to provide that support. And the other area which was touched on earlier is this that we create a lot of internal succession planning.

So I think Warren mentioned earlier about bringing people in, can join and work within a business for two or three years, start to cut their teeth in the advice market, then they can start to be exposed to running a business day-to-day. So we also facilitate a lot of buy-ins over a period of time as well. So we can cater for all sorts based on what’s important for the adviser.

ANDREW CULLEN-JONES: And we’ve seen I think, Adrian, you’ll correct me if I’m wrong, but we’ve seen a growing number of partner principals that are looking to, at probably the twilight of their career in some ways, step away from being a partner principal and restricting their advice to work as an adviser within the practice on a number of clients. And that’s quite a nice method of continuity for both the partner and the clients in terms of managing the transition over time. The analogy I always think is almost like a GP practice where you get a GP partner that will stay working as a GP within the practice but step away from the partner side of the GP practice in itself.

PRESENTER: So unfortunately that is all we’ve got time for. Eddie, Warren, Adrian, and Andrew, I’d like to thank you so much for coming today.


WARREN PAGE: Thank you.

EDDIE GRANT: Thank you.

ADRIAN SPEED: Thank you.

PRESENTER: And thank you for watching. If you did want a trial of that technical support that Eddie mentioned, we do have a link to that underneath the player.
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