Most advice firm owners reel off various growth targets when speaking about the future. Not so with Granite Financial Planning managing director Paul Gibson.
Aberdeen-based Gibson is just as enthusiastic and ambitious as the next person, but to say he is not a fan of big companies is an understatement. On the Granite website, the one-adviser firm – established by Gibson and his wife Nicola – sets out its stall to provide “greater value than many of the larger firms, where clients are effectively paying for large bureaucratic administration systems, dividends to external shareholders, and layers of management”. Is Gibson aiming to stay small but perfectly formed?
“I’m not looking for world domination. I want the firm to be small, with a set number of clients,” he says.
“I just want to do the job well and get paid for it. I don’t want lots of advisers working for me because I would get less time with clients and that’s what I enjoy. I don’t enjoy working for large organisations because of the bureaucracy. Banks and other big organisations can’t manage change quickly; I like small, nimble firms,” he says.
Gibson accepts that some in the industry say small advice firms are diminishing, but he sees a bright future for them in providing a more personal service that does not need to cost as much as the bigger firms.
Consequently, he is focused on maximising the advantages of being a small financial planning firm that takes pride in a job well done. “We offer a more personal service. If someone wants to deal with a private bank that has a nice marble lobby, that’s not us.”
Acknowledging that some people do value things that may come their way via the big companies, such as invitations to events, Gibson says it would be cheaper in the long run for clients to pay for it themselves.
“They just want to get funds under management through the door – once you’re in, you might find the invitations tail off,” he says.
Gibson points to the fact that some larger firms – particularly consolidators and networks – have been loss-making for years. When they acquire smaller companies, he says, these often become “loss making almost overnight” and may eventually be sold back to their original owners. Things are different at smaller firms.
“Smaller firms can’t sustain losses because you’d be out of business,” he says. “At our firm, we don’t waste money on unnecessary things. I know every part of our bank account but large companies rack up unnecessary costs and have more managers than you care to mention. I’ve picked up clients because I can be more flexible on fees and still be profitable. I have a locum arrangement in place if something happens to me. I don’t need 12 advisers to run a viable business and I can run technology to reduce costs.
“Some firms are interested in clients’ bank accounts and how much they have, but if someone needs a financial plan, it has nothing to do with funds under management.”
Gibson has spent “a substantial amount” of money on technology licences that enable Granite to operate as a one-adviser firm.
“We have technology for portfolio analysis and cashflow analysis. Ten years ago that wasn’t around, or was prohibitively expensive, but it’s now a fixed cost for us so I know what it will be,” he says.
Granite is still relatively new, having launched when Gibson decided to leave Carbon Financial Partners in 2016. He initially resisted the idea of having office space as he liked the ability to work from anywhere. However, he realised an office would be a sensible move, and now sees how the firm could expand to another in the future.
“I do the client work but I may have more support staff to free up my time for a larger number of clients. The end game is taking someone on later to run the business or selling it. But I would do it my own way, not just sell to the highest bidder. I wouldn’t want to sell it to a consolidator,” he says.
Gibson started off in direct sales with General Accident in 1996, working for Carbon Financial Partners founder Barry O’Neill.
The two were reunited at Carbon in 2012. Gibson credits O’Neill with instilling in him the importance of always acting in the client’s best interests – values that appeared at odds with the “sausage factory of product sales” that characterised Gibson’s foray into bancassurance at RBS. He admits that experience left him “close to leaving the industry completely”. However, his move into independent financial advice with local accountancy firm Atholl Scott, and discovering financial planning as opposed to product sales, enabled him to leave the negativity behind.
It was at the end of his seven-year spell there that he decided to become chartered, having already become a certified financial planner. He then moved to London, spending five years with the financial planning arm of accountancy firm Carter Backer Winter before returning to Scotland to get married and rejoin O’Neill at Carbon.
“I take the view that I’m relatively young in the industry and I think it’s a good thing to get qualified. I’ve been good at exams because I’ve taken the time and effort to pass them. Am I a better adviser? Yes.
Do I know everything? No, because you can’t know what you don’t know,” he says.
“I disagree with advisers who say qualifications are not important – that’s probably the response from advisers who haven’t done exams.”
Gibson gets referrals from accountants and lawyers and believes that, as these professional connections are qualified to a specific level, they regard the higher qualifications as an indication that they can trust the adviser.
He recognises some advisers may say lawyers are hard work because they do not give them any business, but that has never been the case for Gibson, as his qualifications speak for themselves.
“The chartered qualification is an exam about technical knowledge, and certified is about the application of that knowledge – they are complementary,” he says.
What is the best bit of advice you’ve received in your career?
To do the right thing for clients.
What keeps you awake at night?
My three-year-old daughter. My nights are her mornings!
What has had the most significant impact on financial advice in the last year?
If I was in charge of the FCA for a day, I would…?
Introduce product levies to fund the Financial Services Compensation Scheme, instead of advisers writing cheques to bail out other companies that recommend esoteric products.
Any advice for new advisers?
Get as qualified as possible, but don’t ignore the networking and personal side of things, because that’s how you build your own client bank.
2016-present: Managing director, Granite Financial Planning
2012-2016: Chartered financial planner, Carbon Financial Partners
2008-2012: Chartered financial planner, Carter Backer Winter
2007: Certified financial planner, Grant Thornton
1999-2006: Financial planner/director, Atholl Scott Accountants
1996-1999: Tied sales at General Accident, then RBS