Many advisers think nothing of going the extra mile for their clients. In Karl Pemberton’s case this meant becoming registered as a sports agent. The managing director of Stockton-on-Tees based Active Chartered Financial Planners has looked after clients in the sporting world – players, coaches, managers and chairmen – since his time in banking.
Many of these clients followed him when he became an IFA and it was not long before they were asking for his advice on things that should really have been dealt with by their agents.
“Unfortunately, many that surround those in the sports industry are only interested in the financial reward,” he says.
Pemberton found that, as an IFA, he could do more for those clients than he could previously when constrained by banking.
“It was good in one way but frustrating in another. Frustrating as the extra services I was being asked to provide should have been provided by their respective agent, or at least not by a financial adviser. I was also asked to help ‘mop up’ bad decisions and advice previously taken through their agents. They came to me because they trusted me more,” he says.
“It’s humbling to hear but sad that so many are exploited by those simply trying to line their own pockets. I was helping my clients make money through investments and pensions, yet so much was going out on the other side to pay agents for doing very little.”
Rather than sit back and do nothing about it, in 2011 Pemberton registered to become an agent through the Football Association and FIFA. That business, Active Elite Management, is run on the same basis as the advice firm: doing what is in the best interests of clients.
“The principles are technically the same as the RDR – give educated, sound advice, charge transparently for what you do and regularly review the needs on an ongoing basis. To me, it was normal to do this, but in the agent world it was different,” says Pemberton.
After a 10-year career with Yorkshire Bank, followed by two years with Royal Bank of Scotland, Pemberton joined Active in 2007 – seven years after his father Glyn, now the firm’s chairman, founded the firm.
Establishing himself in financial services away from the family business was important to Pemberton, as he wanted to prove he could achieve something “without it being handed on a plate”.
However, when his father became seriously ill in 2004, it hit home just how much the business revolved around him and Pemberton started to realise he needed to play a bigger role.
“My father had always run a sound, small practice, which was primarily built around him. That’s not wrong, as that’s how many firms had been established over time. But there are dangers and restrictions in this strategy, as was borne out when my father became ill.
“For all that the banks get wrong, one thing you cannot take away from them is their ability to establish structure, process and brand. If you combine the two, along with those traditional ethics and independence, you get what you see from Active today,” he says.
Pemberton had initially applied to join the RAF but, having sent his CV on-spec to various financial services firms out of the Yellow Pages, Yorkshire Bank was the first that came back to him with a job offer.
“I took the secure option of a job, rather than gambling on getting into the RAF. That decision dictated the rest of my life. But I do still wonder what it would be like to fly a plane.”
Instead, Pemberton learned how to run a business. In 2013, he attended the Goldman Sachs 10,000 Small Businesses Programme based at Leeds University Business School and credits that course, which is similar to an MBA, with helping to shape him as a director of Active.
“It made me consider the business as a whole and how to run a better company. You could go as far to say it almost broke me down, took things back to the bare foundations, then rebuilt them with some fabulous support from those that have succeeded before me.
“Many in our industry find themselves being their own boss through a desire of not wanting to be employed anymore. Wanting to take control and build something for themselves. That sounds great but, ultimately, do we know how to run a company? How to set a vision, build a culture, develop a brand and take it to market? I would have said I do before the programme because we were successful but I quickly learned that I – or we – perhaps didn’t know as much as we should.”
Pemberton believes the advice industry has never been as strong as it is now and is optimistic about the future. “The RDR did manage to get rid of many in our industry that may have been in it for the wrong reasons, but it also cut short the advising careers of many well experienced individuals like my father, who in his 60s wasn’t going to start taking more qualifications.”
All in all, though, he thinks it has worked wonders for driving the correct behaviors. “I am a big believer we can always improve – personally, and as a business – so as long as the industry keeps looking to improve moving forward, then everyone stands to benefit.”
What is the best bit of advice you’ve received in your career?
Trust your gut feeling. If it doesn’t feel right, then it probably isn’t
What keeps you awake at night?
My two-year old daughter, Felicity.
What has had the most significant impact on advice in the last year?
The political landscape. The financial response to the election has had both a positive and negative impact. Positive for existing investors making exceptional returns but negative as to ‘what will the future look like’?
If I was in charge of the FCA for a day I would…?
Make those responsible for bad practice more accountable. The good should not have to prop up the wrongdoings of the bad.
Any advice for new advisers?
Be genuine and be patient. Clients will love you and trust you if you do the right thing.
2007-present: Managing director, Active Chartered Financial Planners and from 2011, managing director of Active Elite Management
2005-2007: Private banking manager, Royal Bank of Scotland
1995-2005: Private partner, Yorkshire Bank