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New Advice Strategies: Simon Wood-Woolley on a blended approach to outsourcing

Simon Wood-Woolley is managing director of Define Financial Planning, based in Reigate, Surrey. He started his career with Lloyds TSB, before working for an IFA business in Worthing and then setting up his own practice in 2008. He is part of the Blueprint Distribution network

Simon Wood-Woolley 400

Simon Wood-Woolley has taken a fluid approach to outsourcing in his business. Although part of a network from the launch of Define Financial Planning five years ago, he has outsourced flexibly as he has found that excessive paperwork, or the compliance burden, have drawn him away from seeing clients. It is a strategy he plans to continue as his business expands.

When Wood-Woolley started Define, outsourcing wasn’t necessarily part of his strategic plan. He says: “It has evolved over time. As things have moved on, and my time has become increasingly stretched, I have sought to outsource parts of my business so I can spend more time with clients.”

Wood-Woolley’s career trajectory is a familiar one. Having done a degree in business and finance, he started out in bancassurance with Lloyds TSB. After a spell working for an IFA business in Worthing, he set up his own practice in Reigate, Surrey in 2008. The practice was fee-based from day one. He says: “We felt that the best way to do things was to be as transparent as possible. Also, I had a younger, more professional client base, some of whom had had bad experiences and were looking for a different approach.”

He has been part of the Blueprint network from the start, which has dealt with areas such as compliance. This, he suggests, was an important support when he started out as a lone adviser and ensured he could focus on client work rather than all the nitty-gritty of practice management.

Wood-Woolley has no plans to stop using a network even as his business becomes larger. He says: “Ultimately, I have always wanted to sit in front of clients and give advice. Being part of a network has helped me do that. There are questions about the network model, but at the moment it works very well for me.”

As his business grew, he realised that he needed a paraplanner, and having examined the various options, outsourced much of his paperwork and report writing to an external paraplanning group. He found that, in the short-term at least, it provided the most cost-effective solution in terms of time and effort.

However, this is unlikely to be a permanent arrangement and Wood-Woolley is considering taking on a paraplanner. He says: “I already have some administrative support at the moment and I’m in the process of bringing in a new adviser, so a paraplanner would fit nicely.”

He says that although this may be a more costly solution, it would be good to have someone who could grow with the business.

Perhaps more significant was Wood-Woolley’s recent decision to outsource some of his investment management to discretionary fund managers. Historically he has done all the investment work in-house and, for the time being, RDR permitting, he wants to continue to do so. He says: “Investment is a service that I want to offer. I enjoy doing some of the investment work, but I have segmented my client base and for some clients it is more cost-effective to outsource.”

At the moment, Wood-Woolley is outsourcing on a client-by-client basis. He says that it is not simply a case of any client with assets over a certain level being moved to a discretionary fund manager. He will look at whether a client needs the specific expertise, such as investing in direct equity.

At the moment, he plans three discretionary fund managers for the panel. He says: “We have put a lot of time and effort into their selection – we have spent the past six to eight months researching around ten groups to put this panel together. We started with a questionnaire and then we had an initial meeting, followed by a second meeting. We have had an historic relationship with Brewin Dolphin, but decided to expand that.”

The choice may ultimately come down to day-to-day factors such as whether they want a local office. Brewins has a Reigate office, for example, but Wood-Woolley says that some clients are happy with a London-based manager. He recognises that he may have to change the proposition, depending on the ultimate look of the retail distribution review, but maintains that he doesn’t want to outsource fully at this stage.

He is also clear that outsourcing does not mean abdicating responsibility. He says: “I spend a lot of time on ensuring that the reporting is all in place and updating clients. Clients still need looking after even in this type of arrangement. In reviewing our outsourcing relationships, we meet our discretionary fund manager partners every six months to review the client portfolios. They are well-aware of our requirements on the whole. We send out a copy of our meeting notes to all clients. We still need to add value to our clients.”

As a business, Wood-Woolley plans to focus Define on a lot on a smaller number of higher-net-worth clients. His clients are to be mostly younger – 30 to 55 – high earners, with big tax liabilities and a focus on income and tax planning. They may be professionals or directors of SMEs. He will continue to use outsourcing to build the business where necessary.

He concludes: “Overall, we have taken the decision not to outsource lock, stock and barrel, but to have a blend.”

Underpinning the advice:

Network/compliance: Blueprint Distribution (Intrinsic) 

Number of advisers: 1

Number of staff: 2 – in the process if recruiting one new adviser and planning to recruit one new paraplanner.

Platforms used: Ascentric, Skandia SIS & Fidelity FNW

Investment strategy: Whole of market investment advice with certain clients outsourced to a panel of three DFMs.

Brewin Dolphin currently on panel, just concluded interviewing for other 2 who will be in panel within the next month. 

Estimated assets under advice: £30m, recruitment of new adviser should take this to £40m.

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  1. Genuine whole of market investment advce, or simply lip service? I seriously doubt that a one man band can offer WOM whilst advising all the firms clients and running the business.

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