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Profile: ‘Even Harry Kane needs a coach’ – Explore WM on why advisers need business skills

Explore Wealth Management managing director Stephen Sumner explains the benefits of business coaching for financial advice firms

Having left school with three A-levels, Sumner started out in financial services as a teenage administrator with Cornhill Insurance in 1976. He then moved to Guardian Royal Exchange to become an inspector – a role better known as a broker consultant these days. After 10 years gradually progressing to better regions, Sumner had had enough. “I felt as though my career had started to stall and decided I wanted to work as an IFA. I got my first IFA job at a major building society and did well. But it was all about writing new business, with very little emphasis on reviewing clients year by year. I didn’t think it was quite right not to recognise ongoing service, and I decided to leave.”

Sumner then joined Newcastle IFA firm Bernard Saxon Insurance Services, which was to become Explore Wealth under his leadership. “I was one of four directors at Bernard Saxon,“ he says. “After seven years I decided to buy out the other directors and invest heavily in buying a larger office out of town in a modern business park. That was in 2004 and I haven’t looked back since.”

CV

1997-present: Director then managing director at Explore Wealth Management, formerly Bernard Saxon Insurance Services

1992-1996: IFA for a national building society

1981-1991: Inspector/broker consultant to branch manager, Guardian Royal Exchange

1976-1980: Various roles, including administrator and trainee underwriter, Cornhill Insurance

As well as moving premises and rebranding as Explore Wealth, Sumner’s break with the firm’s past has included repositioning it as a retirement specialist. Not surprisingly, the inspiration for that was a business coach. Several years before his Armson experience, Sumner consulted David Scarlett, author of The Soul Millionaire, who at the time was managing director of The Adviser Gym.

Scarlett was able to help Sumner find ways to differentiate the business, and the upshot was Sumner’s decision to focus on areas of financial planning that would have the most impact on clients, such as retirement planning, and to provide the best service for clients, because this is how advisers can add the most value.

Sumner admits he didn’t see pension freedoms coming but he understands how they came about and sees them as a good thing. Before pension freedoms, people needed to have a guaranteed minimum income of £20,000 a year before tax to access flexible drawdown – later reduced to £12,000 – because it was deemed unsuitable for those with less. Doesn’t he find it odd how the thinking behind the rules has been turned on its head, to the point that we’re now discussing default investment pathways for drawdown?

Adrian Boulding: Advisers should not feel threatened by default drawdown

“When the drawdown limit was £20,000 there were certain elements of society that didn’t understand it, so it wasn’t right for them. There were also sections of society where it’s catastrophic if the stockmarket crashed in the value of their fund, so it wasn’t right for them. But I don’t think there should have been a line in the sand,” says Sumner.

In Sumner’s view, the suitability of drawdown depends totally on individual circumstances. Using an example of an elderly couple for whom cashflow planning was used to calculate their annual outgoings for the rest of their lives, Sumner explains how drawdown can be right for those who wouldn’t have fitted the bill under the old rules. “They got their state pension information and that was more than enough to cover their outgoings, even if one of them died. They were not in great health and had a private pension of £20-30,000. They wanted to have lots of holidays and give money to their family – they knew they weren’t going to be around in 10 years’ time,” he says.

Sumner’s thoughts turn to his own retirement and he admits that trying to decide what to do with the business has caused him a few sleepless nights.

Brett Davidson: Serious about succession? Don’t stay too long

“I don’t want to sell the business to an acquirer who doesn’t have the same structure, culture, ethics and customer experience that we have here. If it turns out that in the future we do get swallowed up by an acquirer I want my team to be well looked after and for clients to be comfortable with it,” he says. “My succession plans will either be option A – to continue as business owner but work half a day or a day a week, or option B – to sell it to future acquirer. I haven’t reached a decision yet.”

Five questions

What is the best bit of advice you’ve received in your career?

Always put clients interest first – you need to be trusted

What keeps you awake at night?

Trying to make a decision about what to do with the business in the future

What has had the most significant impact on financial advice in the last year?

The way financial advice has reached professional status through the minimum diploma qualification. It is weeding out the cowboys.

If I was in charge of the FCA for a day I would…

Create a much tougher regime for financial advice firms that recommend non-vanilla products like obscure aggressive tax savings schemes and dubious investments.

Any advice for new advisers?

Get a mentor as soon as possible, don’t let paperwork build up and be honest with clients.

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  1. This is actually an advertorial for Mr Davidson, masquerading as an independent comment piece.

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