Ruth Whitehead Associates managing director on 25 years attempting to right the wrongs of the industry
When Ruth Whitehead Associates managing director Ruth Whitehead says she is “proud to be anti-establishment, especially the financial services establishment” you can sense there is a story to be told. Something that runs deeper than the usual dissatisfaction with regulation or Financial Services Compensation Scheme levies.
Whitehead set up her own IFA firm 25 years ago, almost as a mission to right the wrongs she had suffered at the hands of the financial services industry in 1989. A classically trained musician who had built a career as a professional bassoonist, she had the misfortune of being “advised to take out the mortgage from hell” by an unscrupulous broker, with devastating results.
“I wanted a fixed-rate repayment mortgage but ended up with a variable-rate endowment mortgage. A man in a suit said ‘just sign here, as you wouldn’t understand it’ and to my eternal chagrin, I did. In my professional sphere, I was interpreting complex works of composers but in financial services I was deemed an idiot.”
In 1992, when the base rate was 15 per cent, Whitehead’s mortgage was a crippling 16.4 per cent.
“I nearly got repossessed. I spent three or four years with every penny trying to pay the mortgage. It was the worst time of my life,” she says.
When the property market collapsed, many people – Whitehead included – had to sell at a loss.
“I never forgot the mortgage broker who didn’t give me the fixed-rate mortgage I asked for. I still feel angry about it,” she says.
It has coloured her view of the industry as disempowering, misogynistic and patronising.
“Financial services is a male-dominated industry where men need to feel good about themselves by operating in mysterious ways. They don’t want clients to feel empowered, as they find that threatening. My business model is to be the complete opposite.”
1993-present: Managing director, Ruth Whitehead Associates
1990-1993: Self-employed adviser, Teacher’s Association
Her business is well-known as an ethical investment specialist, an area Whitehead says is of great interest to her clients.
“I do have the occasional client that doesn’t care but most people see ethical investing as positive, as long as it doesn’t compromise on
For Whitehead, doing a good job for clients means showing ethics in action – running the business in an open and accountable way, not just advising on ethical investments.
In her quest to build a firm that operates ethically, she has embraced transparency, equality, accountability and giving back to the community. Her doors are open to everyone and she has strong views around how client banks should not be clones of the adviser.
“Every single client we see is equally deserving of good financial advice and I think we exercise a non-discriminatory environment far more than many IFAs. My practice is in Stoke Newington in London. It’s a diverse area and I am very proud that my client base accurately reflects the diversity of people who live in it. I’m also accountable – I live and work in the area, so if people are not happy with my advice they can punch me on the nose in the farmers’ market,” she jokes.
“Making sure your client base is diverse is important because if you’re not careful you will tend to have a client base that looks like you. If you are a 60-year-old IFA and your clients are 60-odd too, there will come a time when they’re all dead.
“And if you are a 40-year-old male IFA with a client bank that has lots of 40-odd male clients, what you’re exercising is discrimination. New blood – as diverse as possible – makes a good business.”
Some things in the industry, however well-intended, are divisive in Whitehead’s view. Providers of “gay-friendly” financial products and services get short shrift for pigeonholing gay people and promoting the idea of difference; that people need non-mainstream products and services just because of their sexuality. Whitehead feels this is ridiculous just as much as it is offensive. “I’m gay myself, so I should know,” she says.
She is not impressed by women-only events and awards either, as she thinks the whole point of equality is to compete on a level playing field: “Female-only events and awards don’t even things up; they are divisive. What the industry needs is to be less divisive and more open to anyone from all walks of life.”
Ruth Whitehead Associates may be a small business but it does have a high profile. Whitehead attributes this to people picking up on the way the business is run and how it is doing a good job for clients.
She says: “When the call came for the first ethical investment award that I was shortlisted for, I thought it was a hoax. A colleague forced me to go to the awards ceremony and I went there with all the men in suits chatting to each other – I didn’t know anyone. I went up to collect the award and my proudest moment was looking at the industry in front of me, all clapping dutifully and looking at each other asking ‘who’s she?’. My stepson said, ‘at last, people have noticed you’re doing a good job’.”
Whitehead says there was no plan or marketing strategy to raise the firm’s profile. “What has happened is that people have noticed we are open and ethical as a business. Clients like that, and the fact that we’re not patronising. We seek to be non-discriminatory and we do a fair amount of pro bono work,” she says.
Whitehead also uses her business to sponsor music in the community. As well as being an IFA, she founded and conducts Stoke Newington’s community choir, youth choir and professional orchestra. Funding the orchestra and heavily subsidising tickets is a driving force, as Whitehead wants everyone to have access to music, just as she wants everyone to have access to advice.
She says: “There’s a lot going on but bringing my expertise in two very different areas to the community brings a circularity to my life. I feel very fortunate.”
What is the best bit of advice you’ve received in your career?
Carry on doing what you are doing.
What keeps you awake at night?
Brexit. It’s a pig’s breakfast and all the politicians are really doing is putting lipstick on a pig.
What has had the most significant impact on financial advice in the last year?
Brexit again. It has put so many question marks around the UK economy, which is expected to chug along steadily but it’s had the brakes taken off and we don’t know where we’re going.
If I was in charge of the FCA for a day I would…
Get everything rewritten in plain English as everything is explained in a really convoluted way. I have no time for the FCA.
Any advice for new advisers?
Listen to what clients say – and to what they don’t – so you can understand what they need and the best way to deliver it with integrity.