New Leodis Wealth chief executive on supporting clients through the chaos caused by the UK’s exit from the EU
The long and tortuous road to Brexit has taken us from a political soap opera to what many regard as a tragedy over the past two-and-a-half years. Whatever drama is yet to unfold, the message that Leodis Wealth chief executive Simon Cocking has for clients is to stay calm and ride it out.
“My view is that if we are not careful we could be facing a constitutional crisis in the UK which is a wider threat than Brexit. I haven’t seen such a fiasco in my entire career coming from politicians of all sides. They don’t seem to be able to pull together and they all have their own agenda. Whatever your political view, we need a stable economic climate and that is not being offered on either extreme,” he says.
Clients do get very nervous about the impact of Brexit on their investments in Cocking’s experience. “When people are worried about money they get aggressive verbally, they ask questions and if they don’t like the answers they get more perturbed,” he says.
As a firm offering wealth management and financial planning, how does Cocking and the team at Leodis deal with clients who are worried because the Brexit negotiations are veering from bad to worse and perhaps want out of the stockmarket?
“You’ve got to do a reality check and say to them ‘how long have we been together? We’ve had good times and will have good times again. If you want to sell up now and crystalise your losses, be my guest, but you’re being stupid.’
“Sometimes you have to speak to people in that way.”
Brexit has not dramatically affected the way Leodis manages client portfolios. “We are looking at being more diverse and building cash within portfolios to take opportunities rather than being desperately concerned about the long term,” says Cocking. “Markets are all over the place but President Trump and the trade war with China spooked the markets more than Brexit. Companies are still making profits and making plans.”
Cocking says it is important to make sure you’re diversifying and taking advantage of the opportunities. The last thing anyone wants is for clients to make knee-jerk reactions that they would later regret – such as saying they have had enough and bailing out.
The uncertainty around Brexit is, however, impacting clients in all sorts of ways. It may not be the best time to move house or buy a car, for example, so people may be delaying those decisions.
Cocking says: “We say to clients we don’t have a crystal ball but we do have knowledge and experience of other situations. Around 10 years ago we experienced the biggest crisis in markets that the world had ever seen and the markets recovered. It’s all about remaining calm and riding things through.”
Cocking, who became an IFA in 1989, has never shied away from having difficult conversations with clients but concedes that advisers need to be careful how they go about it. He recalls losing a married couple as clients not long after having a word with the husband about their over-spending.
What is the best bit of advice you’ve received in your career?
First impressions count – that was from my dad.
What keeps you awake at night?
Mainly family stuff now. I spent 30 years worrying about business stuff but I’m better at switching off now.
What has had the most significant impact on financial advice in the past year?
Mifid II, particularly the transaction reporting. It is causing a total change of direction and a major cost to our business.
If I was in charge of the FCA for a day I would…
Ensure all recruits had hands-on client experience. They are meant to protect clients so they need to know what clients want.
Any advice for new advisers?
Focus on relationships and never be pushy to sell products.
“One of my clients had remarried after his first wife had passed away and I noticed that he was spending a lot of money. I said ‘do you not think you and your wife are spending a lot of money? Your pot is diminishing a lot faster than your wife’s’. He wasn’t offended – in fact, he agreed – but six months later I lost them as clients.”
Cocking’s recent appointment as chief executive signals business as usual rather than a change of direction for Leodis. Since joining the firm in 2013, he has been running the business with fellow director Paul Smith. “Paul is retiring in just over 12 months’ time,” says Cocking. “He has decided to step down from the board because he doesn’t think he should take decisions if he is not going to be around for their implementation, but he will remain a shareholder in the business.”
Cocking’s dad, who was a regional manager at a life and pensions firm, has been a big influence on his financial services career.
Having started out as a trainee stockbroker before moving into investment management, it was a chat over Sunday lunch that stirred Cocking’s interest in financial advice. “I listened to my dad talking about IFAs, what they did and the firms he rated. I thought it sounded interesting because it was a bit more varied,” he says.
His dad knew the chairman of IFA firm Lycetts and arranged a chat, which became a job offer the following week.
By the time he met Smith, Cocking was giving serious thought to what he wanted from his job and what good looked like. The pair spent a year mulling these issues over before Cocking joined Leodis. At the time, Leodis was owned by law firm Lupton Fawcett but Cocking’s view was that if the firm was ever going to have value and market itself to other professions it needed to be separate. It became a separate limited liability partnership in 2014 and converted to a limited company in 2016.
So what next for Leodis Wealth? “We are in talks about possible acquisitions of advisory firms. That is part of my role now; I am not just looking at client propositions,” says Cocking. “We are changing a lot of processes and procedures and bringing in new software packages. We are building the infrastructure behind the scenes so we are scalable. Not many businesses of our size would have the capability we have.”
Cocking says that although Leodis does not do defined benefit pension transfers, it is something he is interested in. “My fear is that increased regulation around it will stifle the market. It has become a no-no – but you only ever hear about the bad stuff,” he says.
Cocking remembers transferring out of a final salary scheme after two years at Lloyds TSB and being very happy with the deal from a financial perspective. “Apart from that, if I do get to 90 and have got that fund left, I want my family to have it. It was a no-brainer for me,” he says.
“Of course, lots of people shouldn’t transfer out but regulation is so focused on it. It’s not just final salary schemes, drawdown and pension fund withdrawals have been the focus of the regulator, as they should be. But there needs to be a balance, with individual circumstances taken into account.”
2013-present: Director, then chief executive, Leodis Wealth
2002-2013: Director, Vantis Financial Management (became RSM Tenon in 2010)
2000-2002: Senior adviser, Willett & Ross Financial Services
1997-2000: IFA, Lloyds TSB IFA/Private Banking
1989-97: IFA, Lycetts Financial Management
1985-1989: Trainee, Wise Speke Stockbrokers then assistant to investment manager, Berry Stainsby & Walker