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MM Profile: Karen Mccaffrey

JLT Wealth Management’s managing director believes even the aspects of the RDR that are generally viewed as negative can benefit independent advisers as common ground on charging and transparency increases the number of people likely to be seeking advice Interview by Rachael Adams

Karen McCaffrey hates paper. “Our industry likes lots of paper, lots of long letters, but no one is going to read a hundred-page letter about a pension. One of the best ways you can help clients is by keeping it simple. “If it benefits the client, it is a cost worth doing.”

This is why McCaffrey has run a paperless office since she became part of JLT under its acquisition of iimia Wealth Management in 2010.
McCaffrey believes there are pressing challenges on saving. “There are a lot of legislative changes to contend with and there is also the question of how people take their retirement savings, as well as what savings vehicle to use.”

But despite working for a company that deals predominantly in pensions, McCaffrey does not believe they are the only way to tackle the savings gap.

“Pensions are only one way of saving. Cash Isas, stocks and shares Isas and employer share schemes are all ways of saving without locking cash in for the long term, like a pension. Our job is to look at different ways people can save.”

JLT’s phone-based Advice Centre, which was launched in October, is one way they help make people aware of their options.

“We want to offer advice from fully qualified advisers to anyone who needs it and can pay a fee. Not everyone needs really technical advice and not everyone can afford the fee that comes with it.”

McCaffrey believes the Advice Centre leaves JLT well placed for the retail distribution review.

“The RDR will level the playing field for all IFAs in terms of charging, in that no one will be able to be seen as free. By making sure we can service a wide range of people, we will be set to benefit from the RDR.”

McCaffrey also believes the industry as a whole will benefit from the RDR. “I have always said I wanted to leave the industry in a better state than I joined it and I think the RDR will help achieve that. It is not the whole solution, but it is a next step.”

She thinks that even potential outcomes the industry is interpreting as negative could benefit financial services.

“We may see some advisers leave, such as those who are nearing retirement age, which will lead to acquisitions and mergers. I do not think this is necessarily a bad thing, as long as the person sitting opposite the client can give advice.”

The RDR is also predicted to increase the number of people who look after their own financial affairs rather than turn to a professional adviser.

“As IFAs’ fees become more transparent and clients become aware of what they are paying, more of them may choose to look after their financial affairs themselves. If they have the time and an interest in their financial affairs, why shouldn’t they?”

McCaffrey also welcomes auto-enrolment. “The only way to get people saving is a form of enforcement. JLT has already seen increased opportunities in terms of educating the large companies we already work with on their autoenrolment options. JLT is not just about pensions, we also offer packages like death in service and health insurance, and some employees may want to go that far in looking after their staff, which is great for us.”

But McCaffrey does not think auto-enrolment is a silver bullet. “We are in a recession and if you cannot afford to save you cannot afford to save but I do think people will get more open-minded as the process goes forward.

“The key is education. We need basic finance being taught in schools, so when people are faced with an occupational pension scheme they will make the right decision.”

She believes IFAs can fill this gap. “Life is getting more complicated. We have inheritance tax, long-term care, divorce, capital gains tax and people will need advice. IFAs will have to evolve with consumers. It will be a learning process for everyone.”

McCaffrey moved into financial services after giving up a law degree to travel, McCaffrey returned to Befordshire to find a job. “I saw an advert for an administrator for an IFA in the local job centre and went for an interview. When I got the job I did not know anything about financial services.”

Copeland & Co principal Brian Copeland took McCaffrey under his wing and after seeing how comfortable she was talking to clients while they waited for meetings, he encouraged her to take the Financial Planning certification exams.

In 1997, McCaffrey followed a colleague in a move to solicitors Shoosmiths. “They were fed up with their clients inheriting large sums and not getting the best financial advice, so they set up their own advisory department. It was great for me because it gave me a grounding in how to deal with professionals. It also taught me about fee-charging.”

Soon after McCaffrey joined, Shoosmiths hived off its financial services department and Compton House was born. McCaffrey enjoyed servicing clients on the investment side of advising but the business sold its discretionary management arm to iimia Wealth Management and iimia then bought Compton House in 2004. “It was a good fit. iimia was Aim-listed, so it taught me a lot about corporate governance and responsibility to shareholders.”

Later, iimia became Midas Capital but the company’s fund management arm and financial planning arm began to grow apart, which is when McCaffrey decided the IFA business should become part of JLT. “They wanted to grow one way and we wanted to grow another way.”

JLT was looking to broaden its private client work, where the iimia team had extensive experience. “JLT recognised the way the industry was changing in that it was moving from the employer being responsible for pension provision to the employee taking responsibility. We felt we really could make a difference. JLT looked after trustees and employers, and we could extend that to looking after individuals.

Born: Silsoe, Bedfordshire, 1969
Lives: Bedfordshire
Education: Bedford High School
Career: 2010-present: managing director, JLT Wealth management; 2008-10: managing director, iimia Wealth Management; 2006-08: deputy managing director, iimia Financial Planning; 2004-06: regional director, iimia; 2002-04: director, Compton House Ltd; 1996-2002: IFA, Copeland & Co; 1991-96: administration manager, Copeland & Co
Likes: Travelling, food and drink and walking
Dislikes: Hangovers, the fact that I can’t play the piano as well as I would like and the fact that all the nice foods are very calorific
Drives: A hybrid car
Book: Any detective novel
Film: Pay It Forward
Album: I like all music
Career ambition: I am doing it
Life ambition: Be the change in the world that you would like to see
If I wasn’t doing this I would be…Travelling


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There are 3 comments at the moment, we would love to hear your opinion too.

  1. Nearly 10 years ago I first met Karen when iimia was in negotiations to acquire Compton House. I was one of the founders of iimia. I remember Karen saying her ambition was to be MD of a financial services business and she was proud to be a financial advisor at a time when the profession did not enjoy a brilliant reputation.
    Karen is a consummate professional and it is brilliant to see her talent recognised in this article.

  2. “We may see some advisers leave, such as those who are nearing retirement age, which will lead to acquisitions and mergers. I do not think this is necessarily a bad thing” No you would not
    because it is not you who is nearing retirement age and being asked to requalify or leave.
    Really makes me sick when other IFAs have no sympathy for older advisers who have served their clients well over a long career.
    Wonder how they will feel if a future RDR style onslought is applied to them.

  3. 16th December 2011 at 3:05 pm

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