On the face of it, the current economic climate might not be the best time for an adviser business specialising in offering advice to small and medium-sized businesses but Jobson James deputy managing director Miles Goodworth could not disagree more.
He says: “It is a fascinating time to be working in the corporate area right now because there are so many different aspects presenting themselves to us as IFAs thanks to the state of the economy.”
As well as offering a wealth management division and financial advice for individuals, Jobson James specialises in offering pension advice to both employers and employees of SMEs in the West Midlands area. Goodworth says that far from businesses looking to cut back their employee benefits, the recent need for firms to reassess their finances has meant that pension provisioning has come to the fore.
He says: “In terms of owners and directors of businesses, one of the things that the last 18 months has taught them is that the reliance upon your business to be the traditional ‘pension’ is a pretty foolhardy way of constructing your finances and your future plans.
“They now know you can’t rely on your firm to keep yourself in clover when it comes to retire so you have to build up your own personal wealth. That’s giving us an opportunity, ironically, to talk personally to directors within SME firms.”
Goodworth also says the state of the economy has put employee benefits and their mandate under the microscope. “More often than not, most owners and directors do not understand what benefits they have and what they provide, less still an idea of what they are spending on. We are doing a lot of work with employers about that right now.”
Jobson James has 12 advisers and 18 support staff and says it is one of the biggest IFAs in the West Midlands. Goodworth joined four years ago after leaving a partnership with another adviser. He wanted to move into the corporate advice space because he saw a lot of opportunity in not just finding business with affluent businessowners and directors but with their staff too. The firm splits its operations between personal and group business, which means it can find business within businesses themselves.
Goodworth: Some employees think pensions are a waste of time and a load of rubbish because they do not understand them
Goodworth says: “The backlash of the demise of defined benefit is a general malaise where pensions are concerned. I have experienced employees who think pensions are a waste of time and a load of rubbish because they do not understand them. Employers have a massive job on their hands and I believe a responsibility in facilitating more effective communication of employee benefits and particularly pensions.”
He says this service could come in the form of semin-ars or onsite surgeries but Jobson James has found that the best way to educate emp-loyees and to advise on their finances is through one-to-one sessions.
Goodworth admits the retail distribution review may mean lower-paid people do not choose to pay for advice but says that simply means the onus is on the employer to provide a service and help its employees understand their pensions, particularly after personal accounts are introduced, and employers are required by law to enrol employees in a pension.
He says: “Employers are going to have to start factoring in the adviser fee into their employee benefit spend. This all goes hand in hand with personal accounts. Those who think personal accounts are a form of compulsion can wait for the legislation to be forced upon them or they can be proactive about it and put in place a personal account qualifying arrangement and begin to help their employees now.”
Goodworth says personal accounts are a huge opportunity for IFAs in the corporate space. He says the “huge journey of education” that must be taken by employers before 2012 to understanding the new legislation will help employers and employees wake up to their pension responsibility.
He says: “Many employers would not know a personal account if it bit them on the backside, some of them are not even familiar with the terminology. We have three years to change that. Jobson James is about to embark on an education programme with West Midlands employers as a part of our marketing, giving advice on how employers can be geared up for personal accounts.”
Although Goodworth pred- icts that the RDR and personal accounts will offer a lot of opportunity to corporate IFAs, he admits advisers, including Jobson James, also have to change if they are to take advantage of this brave new world.
He says: “We can’t be all things to all people, the world we live in is too complicated now – we will all have to have specialisms. Jobson James is trying to develop a multi-faceted practice with specialists in individual areas. If we go into an SME, we can gear them up to personal accounts. We have a specialist to help and then if the owner wants to discuss their personal pension, we have a specialist to deal with that too. IFAs have to evolve.
“Personal accounts and the RDR is a big opportunity and hopefully we can be in prime position to build from that.” Goodworth: Some employees think pensions are a waste of time and a load of rubbish because they do not understand them