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Plutus taps into a wealth of knowledge

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Plutus Wealth was established in 2008, aiming to bring something new to an industry that - fairly or unfairly - has had a reputation for being slow to change. It aimed to attract a new generation of clients while retaining its existing client base. This meant presenting a fresh and modern approach - no mean feat in the current climate, when the temptation is simply to hunker down and preserve the existing business, but early signs have been encouraging.

Robert Forbes was one of the nine founders of the business. He describes their mission. “When we set up Plutus, we wanted to take all the bad bits out. We are a fee-based business, we had no legacy issues and no throwbacks. We wanted a crisp, clean company, where clients could feel part of things.”

The practice was built on consultancy lines. This meant that rather than clients dealing with only one adviser, individual advisers would refer business to other advisers within the practice, depending on client need. Building up loyalty to the business rather than individual advisers has been a challenge for many gro-ups and the Plutus founders wanted to ensure that this type of arrangement was established from the start.

Forbes says: “Each person in the business has a specialism although there is some crossover. I lead on retirement, others on investment or mortgages. Then there are specialist business areas as well - one does marketing, another IT, another cost control.”

In all things, the group has set its stall out as inclusive rather than exclusive. Clients receive the equivalent of one piece of correspondence from the group per month and all pay monthly fees. This means that they don’t need a minimum of a certain amount of assets and it means no clients run at a loss.

It also meant recognising that some areas would need to be outsourced. Forbes says: “Where we don’t have expertise - equity release, for example - we will outsource it. We do this for areas such as fund management, trust planning and will-writing.”

Starting from scratch in the wake of the credit crisis brought some challenges but the partners have been energetic in building up business through a number of different routes. Some brought clients with them when the company was set up. The group has generated business through the Unbiased website. It has also had a lot of referrals.

Forbes says the website has also proved an important tool. He says: “When we look at the analytics, it has been interesting to see how potential clients approach these things. They tend to head straight for the people page to check out who they are dealing with. On reflection, it is exactly what I would do in the same situation.”

The group now has two main types of client. The first is 30-35 and tends to be new to financial planning, often City professionals. The second group comprises people coming up to retirement, who, Forbes says, are often in a bit of a panic.

He adds: “We aim to explain things to clients clearly. We want to turn something that is dull into something they can engage with. We aim to bring a lot of energy and activity to each client. We are always talking to other IFAs to share best practice. It is the same as the way we look after our clients.”

’Portfolios run on pre-set risk parameters’
The RDR requirement that advisers can prove that all clients are dealt with consistently necessitated an evolution in the group’s investment process. Forbes says: “We wanted to ensure that all clients were getting the most appropriate advice and that process was scalable for one client or many. We used to do fund selection but realised that was not the way forward.”

Now the group uses Brewin Dolphin for bigger investment portfolios. For smaller portfolios, it uses a process devised by the Plutus investment committee. Forbes says: “We take advice from external clients on a quarterly basis and make changes to the strategic asset allocation. It is a passive-based philosophy, unless there is a specific reason to use higher-cost funds. In general, we will track developed markets and use specialists in more niche markets. The investment committee has been running for the best part of a year, so it is quite new.

“We only move portfolio asset allocation within relatively tight parameters. The investment committee can only deviate from the strategic asset allocation by a set amount per asset class. This is to minimise risk. We have 10 model portfolios for clients and they are run to pre-set risk parameters.”

The group is becoming directly authorised. Forbes says: “We have been running for two years and have looked at all the networks. We found one that really worked for us in the early stages but now we want to be in control of our own destiny. The process involves quite a lot of paperwork but we were already well in excess of the capital adequacy requirements. It is all on our shoulders to make sure everything is correct.”

The group is still in a building phase of development. As such, it is still putting some emphasis on marketing but aims to strike a balance between existing clients getting the service they deserve and spending enough time building the business.

In 2011, the group has taken on 15 new clients and all have been referrals. However, it is growing relationships with some professional introducers. Forbes is particularly excited by the opportunities coming up through the Legal Services Act and so is forging some new partnerships with legal firms.

Plutus has also been implementing some technology changes recently. Forbes says: “Our technology was perfectly adequate but we are moving to cloud computing technology. While implementing it is relatively straightforward, it takes a certain level of commitment from us. It means we can get onto our central drive from anywhere on the planet. It is also more efficient - one version can be edited without generating a lot of version control issues. It is a much more intuitive system.”

The group has also recently committed to becoming carbon neutral. Forbes says that this has meant taking some basic steps - making sure everyone was recycling, for example, but also looking upstream and downstream.

He adds: “It was not just about what we produced but about what our clients produced. We needed to know how much impact each individual client was making, based on the amount of IT time, paperwork, travel, etc.” The initiative is still at an early stage but is in keeping with the group’s aim to be a fresh, modern advisory practice.

Forbes, for his part, says that all nine founders are keen to take the business forward. He says: “We are constantly evolving. We are very proud of the lack of complacency among the nine of us. We believe that is when things often start to fall behind.”

key points

  • The practice was built on consultancy lines, with individual advisers refering business to other advisers within the practice
  • Plutus aims to be inclusive rather than exclusive. All clients pay monthly fees and no client runs at a loss. There is no minimum asset level
  • Areas such as equity release, accounting, will-writing and some parts of the group’s investment strategy are outsourced to external providers
  • The group built up its client base through existing connections, referrals, plus the Unbiased website. It has also found its own website a good tool for bringing in clients
  • The group has two main types of client. The first is 30-35-year-olds, who tend to be new to financial planning. The second group comprises people coming up to retirement

Company data

Established: 2008
Based: City of London
Partners: Nine
Fee-based? Clients pay monthly retainer
Outsourced investment management: Yes, partially to Brewin Dolphin
Network: Moving to direct authorisation
Back office: Intelligent Office from Intelliflo
Client base: City professionals and the at retirement market

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