The British Steel defined benefit transfer crisis is personal to Niche IFA director Ray Adams. With family in the steel industry, plus an office at the edge of the M4 motorway close to the steelworks, the workers’ plight struck close to home. As a pension specialist, he could not avoid becoming involved.
“The steelworkers had been put in an unfair situation by the firm’s management and pension trustees. They were forced to decide between the frying pan and the fire and needed help. It fell on the advice community to provide it,” he says.
“My phone rang red hot. I looked at how many clients I was assisting and multiplied that by the 25 hours the work would take. I looked at my staff, our existing clients and the hours in a day and said we can’t physically do any more.”
Adams wrote to the FCA expressing his concerns about a capacity problem in South Wales. With not enough advisers to deal with the demand for transfer advice, he was worried clients would grab the first person who said they could help rather than shop around, leading to poor outcomes.
“And that’s exactly what happened,” he says. “I sent emails and spoke to the FCA almost two months before anything was in the public domain about there being a problem. It didn’t get involved before the end of November and I’d already closed my door on 10 October.”
That decision turned out to be a good one for Niche, providing a big tick in the firm’s favour when its DB transfer business was investigated by the FCA.
“We were told it was important we took the business decision we did. The FCA said that if we’d just said yes to more clients, we’d have exposed ourselves to poor practice. It demonstrated our ethics and most advisers gave good advice, but some of my peers turned out to be rogues.”
Adams believes there is still more to come. He expects the wider impact will start to be felt next year, when advisers fail to get professional indemnity cover, resulting in less choice for clients.
“It hasn’t happened yet but we’ll see claims chasers pursuing British Steel and looking at DB transfers.”
Good client relationships are crucial for Adams, but he recognises getting on well with his employees is just as important for business.
He has created an environment where employees feel they matter as individuals, have choices and are allowed opinions, are financially rewarded when they progress through the business, go on work-funded social events and generally enjoy what they do. If they have all that, why would they look for a move elsewhere?
“The last member of staff we lost had a girlfriend in Exeter and moved there to be with her. We tried remote working, but it got to the point when I said to him: I don’t expect you to love this job more than you love your girlfriend, so off you go,” says Adams.
“We don’t lose many staff and we certainly don’t lose them because they’re unhappy. I wouldn’t say we’re the highest payers, but of course as people progress they do get pay rises.
“It’s about how they feel. My staff will never become family but I can make them feel they belong. I don’t run a dictatorship and I probably talk to them more about their personal lives than I do about work.”
Prior to becoming an adviser, Adams was a police officer.
We have close to 8,500 registered IFA users; at this rate it should be 10,000 by the end of the year
“People think it’s a completely different career but it’s not really. You speak to witnesses, establish the facts and evidence for guilt or innocence – 99 per cent of it is talking to people and that’s what advisers do,” he says.
Adams’ interest in finance grew after he profited from the property boom in the 1980s and by 1996 he had joined Wesleyan as a tied adviser. He stayed there for eight years but left to establish Niche as insurance companies were finding it difficult to sustain direct sales forces once regulation had come in.
Adams points to the old adage “where there’s muck there’s brass” to illustrate how someone could be shovelling a fair amount of it all day for a tidy sum but not really enjoying it, or earning slightly less doing something more enjoyable.
He is firmly in the latter camp and his enthusiasm for the job is evident even in his voicemail greeting. That enthusiasm is also the driver for business ideas aside from Niche. His passion for specialist fountain pens moved from a hobby to a business, which he passed on to his son. Then, in 2014, Adams created the cashflow planning tool CashCalc.
“CashCalc was developed out of the idea that if you do what you’ve always done, you get what you always get,” he says. “I’m constantly looking at things thinking ‘why can’t we do it easier than that?’ I thought ‘why is cashflow planning so complex?’ It’s only complex because we’re not building the software to make it easier.”
Realising that existing cashflow planning tools had some, but not all, of the features he wanted, Adams decided to create his own.
Four years on, he says it is going “phenomenally well”.
“On average, we get 200 to 300 new IFA users every month. Last month we had 366 new IFAs register. We are close to having 8,500 registered users and, on current growth rates, we should have 10,000 by the end of the year,” he says.
It is now being rolled out to advisers in other countries.
Adams currently does not charge advisers to feature in his other venture, Adviserbook, despite it costing him around £120,000 to create last year. His main priority is helping the public find regulated advisers who can assist them, so they do not fall prey to scammers.
From next year, however, he will ask advisers who would like to personalise their Adviserbook profile for a £10 a month contribution. “If we break even and make a small profit, it just might enable us to enhance public opinion of the financial planning industry, so we can send a positive message,” he says.
What is the best bit of advice you’ve received in your career?
Without clients you have no business, so look after them.
What keeps you awake at night?
I sleep soundly at night, knowing we apply the “dad test” – would you give this advice to your dad? – to every bit of advice we give.
What has had the most significant impact on financial advice in the past year?
The British Steel pension transfer saga.
If I was in charge of the FCA for a day I would…
Rewrite the Cobs rule book and replace it with the “dad test”.
Any advice for new advisers?
We help clients change their lives – join us.
2005-present: Director, Niche IFA and Niche Pens; director of CashCalc from 2014; founder of Adviserbook from 2017
1996-2004: Tied adviser, Wesleyan