A small financial planning firm that is part of a bigger organisation has the best of both worlds, according to Menzies Wealth Management chief executive Ben Simpson. Being a subsidiary of accountancy firm Menzies, which has a network of six offices across central London, Surrey, Hampshire and Cardiff, gives Menzies Wealth Management a number of advantages.
Simpson says: “Of course it assists with attracting clients but far more important is what it allows us to do for those clients. While our industry’s qualification standards have come a long way in recent years, it is fair to say we do some of our best work for clients when we collaborate with other specialist professionals. We are fortunate to sit among 400 professional staff and partners, with a wide range of technical expertise.”
Simpson finds being part of the Menzies group adds significant credibility and leverage to the wealth management division. He also points to in-house expertise in marketing and HR as an example of something it would not have access to as a standalone IFA practice.
Given that clients of the accountancy business often need advice on issues such as employee benefits and corporate protection, it makes sense for Menzies Wealth Management to provide corporate advice as well as personal financial planning. It does not shy away from advising in complicated areas such as defined benefit schemes.
So what are Simpson’s thoughts on the thorny issue of DB transfers and the way some advice firms have turned their backs on this particular part of the market?
“Most individuals have regular expenditure, which they will need to continue to fund once they have finished their working lives. Call me old-fashioned but a DB pension providing a regular secure index- linked income for life sounds like an excellent way to achieve this. That’s not to say that a DB pension should never be transferred. Depending on the individual’s particular circumstances a recommendation to do so may be appropriate.
“Each advice firm must take its own view on business risk and commerciality, but those that do give advice in this area will want to pay close attention to permissions, supervision, qualifications, PI requirements, charging structures and incentives.”
As for pensions in general, Simpson suspects many consumers have been largely apathetic for years. “Even those that have traditionally been more pension-minded are likely to have been frustrated by the repeated desire of governments to tinker with the rules. Demographics are a serious issue for state pensions and a 22-year-old might reasonably question quite what they are likely to receive in return for over 45 years of National Insurance contributions.
“The triple lock has always been more about political expediency than rational economics and I struggle to believe it will survive in the long term. Of course, a week is a long time in politics and perhaps that’s the underlying issue, with policy that impacts us 40 years in the future being determined by MPs with a five-year electoral cycle.”
Things that happen today do determine the path of the future and the financial advice industry is no exception. Simpson is confident in the staying power of independent advice but believes it is dependent on advisers continuing to add value.
“If we deliver advice that is specific to the needs, goals, objectives and circumstances of our clients, then we have a great future. However, if we ‘order-take’ using an advised-sales process, then perhaps we will be replaced by robo-advisers in the near future.”
The triple lock has always been more about political expediency than rational economics and I struggle to believe it will survive in the long term
Like many advisers, Simpson fell into the financial services industry. Finding an economics degree “actually qualified me for very little”, he took a temporary job at Standard Life before being offered a permanent role, first in sales support and then as a trainee broker consultant. “Standard Life still had a comparatively large sales team back then, with a lot of nice guys who were usually more than happy to share their and knowledge.”
After moving to Skandia in 2005, his focus shifted from pensions to investment platforms. So how did he find the transition from broker consultant to adviser? Did he need to develop new skills?
“As a broker consultant I was dealing with industry professionals who spoke the same technical language. But when we deal with clients, our use of language needs to be more considered and the nuance of the advice becomes so much more important.
“An often repeated comment at the FCA’s positive compliance workshops is ‘just because you can, doesn’t mean you should’. With this in mind, perhaps I can best explain the difference by saying that as a broker consultant I talked about what you can do, but as a firm of financial planners we talk to our clients about what they should do.
“A chief executive of an IFA practice is ultimately running a small business and has to deal with the plethora of issues that arise, from HR and marketing to RMAR returns and budgets. Time is always a challenge.”
Ask him what personal qualities and skills he has needed to zoom up the career ladder and he is keen to point out that he is the chief executive of a small IFA practice rather than of Standard Life or Old Mutual.
“One could list a number of clichés but, like any small business, it’s ultimately about sustained periods of very hard work. Five years sat on this side of the fence has further increased my respect for the individuals responsible for the management of small businesses, advisory or otherwise.”
So how is he making his mark as chief executive of Menzies Wealth Management? “I have much more work to do before indulging in self-aggrandising. But in terms of future plans, we’re seeking to further enhance our clients’ experience and, of course, to grow our profit meaningfully and sustainably.”
What’s the best bit of advice you’ve received in your career?
Challenge and be challenged.
What keeps you awake at night?
What has had the most significant impact on financial advice in the last year?
The aging population. Not simply the economic impact of the demographics but also how we engage with that population to meet their changing needs.
If I was in charge of the FCA for a day I would…
Re-iterate the importance of culture in financial services. If the culture of a business is bad, delivering good customer outcomes will be an uphill battle, irrespective of the compliance infrastructure.
Any advice for new advisers?
Being chartered is important but it’s not the defining characteristic of a good financial planner. Your ability to communicate effectively will be at least as important to the success of your career. Remember to do the basics well and find a good mentor.
2012-present: Chief operating officer then chief executive, Menzies Wealth Management
2005-2012: Executive business consultant, Skandia
2002-2004: Trainee consultant, Standard Life