Before becoming a certified financial planner in 2005, Smart Financial chief executive Steve Martin admits to not having the skills and tools to join the dots between what people had and what they wanted. With the certificate, everything changed.
“I realised people don’t live their life for money; they live for life, and money is there to help them do what they want to do. That’s more interesting than products, tax planning and investments.
“If you don’t really get a person and what’s important to them, you risk building a plan that they don’t care about – or a plan they think they should have or are allowed to have. We’re not just setting people on a path of dreams.”
After more than a decade honing his financial planning skills, Martin launched the Smart Training Academy. It is now The Financial Planning Training Academy and has Brunel Capital Partners managing director Damien Rylett on board as a director.
As the name suggests, the purpose is to train advisers in soft skills that will enable them to practise financial planning “properly”, using concepts the likes of George Kinder, Paul Armson, Carl Richards and Bill Bachrach would advocate, without slavishly following them.
“You don’t have to be someone else,” says Martin, who admits that he could not get comfortable with some of the questions that are part of the Kinder approach.
“We set up the training academy as we didn’t think the existing solutions work for everyone. We want to help people find their own voices.”
Martin says some of the language and terminology used– such as Armson’s idea of financial buckets – may not come naturally to certain people if it does not fit their personalities.
Rather than missing that stage out, or tying themselves in knots trying to put various concepts together that do not really work, Martin suggests an adviser looks at the purpose the theory is trying to fulfil and replaces the terminology with something that works for them.
“What’s really behind Paul’s bucket idea is to summarise what you’ve learnt from clients. You can’t just miss that stage out, because the client would think you haven’t got a clue what they have been talking about.”
Sometimes Martin’s clients need a bit of help in identifying the things that are important to them before the financial planning process can even begin.
For example, one client hated his job and financial planning showed him he could hand his notice in immediately, as he did not need to work.
“That was 12 or 13 years ago, soon after I got my CFP,” says Martin. “He worked for another three years, because he knew it was on his terms. It’s interesting how people behave differently when they know at any point they can walk away. At the time, I didn’t realise financial planning would lead to odd situations. Why would you still work if you hated your job? Maybe you don’t hate it that much.”
Martin has spent most of his career in independent advice, having started out selling protection with City Financial Partners, part
of Lincoln. He studied medicine at university in Glasgow but switched to politics and management, then decided he would rather get a job.
After a year at City Financial Partners, he joined family run IFA firm Ritchie Baird and Barclay, eventually moving to Altrincham, Cheshire, to marry his wife
Michelle. The couple established Smart Financial in 2008 and now run the firm from Spain.
With threats to traditional product-based advice coming from robo-advice and cashflow modelling tools that consumers can access themselves, Martin believes more advisers are starting to see financial planning as a better solution for both their clients and business.
“It has not reached the UK yet, but if Vanguard can provide full financial planning, including cashflow, for five basis points, how are you going to compete? It has to be at a relationship level because you’re not going to ‘out-data’ Vanguard,” he explains.
It is also important to remember there is a difference between being a financial planner and claiming to be one to sell clients something or gather assets. Financial planners are responsible for building a financial plan, so Martin believes there should be no problem in working with an investment manager or enabling the client to implement the plan themselves.
That said, he concedes there are a few exceptions to the rule, with some firms only taking on those who want them to implement the plans, as they just want to work with long-term clients.
“Less people are delivering financial planning for the wrong reasons but some genuinely don’t understand what it is. The training academy has been used by 150 people across the UK and Ireland, ranging from 21 years of age to people in their 60s. There is nothing disingenuous about the people on the courses; they just don’t have the skills and toolset to take clients to where they could get to. They still call themselves financial planners because that is the path they want to go on, but they need to upskill.”
One example where they often need help is new client meetings. The temptation for some is to get straight down to business, which can leave clients wondering where it is all going to lead, how much it will cost and what will happen to their data. Others understand the need for an introduction, but turn it into a lengthy sales pitch revolving around their credentials, not the client.
Martin suggests posing a question along the lines of “What brings you here today?” to kick things off.
“It recognises that the person didn’t come last year or the month before, so you can get people into a discussion about why now? What has happened?” he says.
“They are sat in your office and something has happened to bring them there. You don’t need to explain why they have made the right decision. It doesn’t mean you can’t drop a line in at some point, but don’t open up with a 20-minute pitch about you.”
What is the best bit of advice you’ve received in your career?
Invest in yourself.
What keeps you awake at night?
Nothing, I’m very lucky.
What has had the most significant impact on financial advice in the last year?
Zoom – the fantastic tech allowing you to have meetings remotely with clients.
If I was in charge of the FCA for a day I would…
Ban contingent charging.
Any advice for new advisers?
2016-present: Director, The Financial Planning Training Academy
2008-present: Chief executive, Smart Financial
2005-2008: Partner, Christian Douglas Financial Planning/Wealth Management
2004-2005: Development manager/IFA, Multiplex Wealth Management
2003-2004: IFA, Bollington Financial Services
2000-2003: IFA, Haines Watts Financial Services
1999-2000: IFA, Ritchie, Baird and Barclay
1998-1999: Trainee manager, City Financial Partners