Profile: ‘A DB transfer isn’t a new toy advisers are just starting to play with’

Trentham Invest director on not tarring all DB transfers with the same brush and how Lego helps her clients

We have all played with Lego bricks. We have built cars and houses, then taken them apart to construct something new. The beauty of it lies in how the only limits are your creativity and imagination in using your finite number of bricks. However, if you want to build something specific – a spaceship from Star Wars, for example – a different approach can be taken. Rather than struggling to work it out yourself, you can buy a Star Wars Lego set that provides you with the right pieces.

For Trentham Invest managing director Nicola Downs, Lego is not only a metaphor for financial planning, but also a tool she uses to help tease out what clients want from life and how to go about achieving those goals. She admits that some might find it unusual, but she likes to do things differently, noting: “A client arrives with some Lego bricks and says, what can I do with these? I then say something like, this is where you are, and this is where you are going – you need a boat. Then I’ll build a boat.

Phil Wickenden: Financial planning is about more than what you know

“Everyone’s pieces are different and sometimes people don’t understand what they need, so I’ll help them understand their game and build what they need.”

Expanding on the metaphor, Downs says the Lego pieces clients have can be traded for other pieces that are more useful – just as people can transfer their Isas or pensions to something better and simpler, or just move to a better rate.

“The nice thing about Lego is that if we build a model, we can remodel that when life changes. There is a lot of flexibility,” she says.

Downs, who also draws pictures to illustrate clients’ financial plans, does not have much time for the industry jargon she felt was “excruciatingly complex” when she started out in financial services back in the 1990s.

CV 

2003-present: Managing director, Trentham Invest

2000-2002: IFA consultant, Arbuthnot Pension and Investment

1998-2000: IFA, Reeves Independent Options, then Giant Accountants and Financial Services

1995-1998: Business development consultant, MGM Advantage Assurance

1992-1995: Financial adviser, Norwich Union

1990-1992: Manager, private health club, Fitness for Industry

Over the years, she has been happy to help clients decipher policy wordings and, as an IFA, is willing to explore anything that helps people make sense of their financial circumstances and what it means for their everyday lives. She says: “When people understand they can achieve their life dreams early, their confidence goes through the roof.

“It takes a few years but when they get that vision, it is really powerful. They know where they are going and that gives them a purpose and values they’d been covering up for years.”

The seeds of Downs’ career were sown when she was a baby. At barely two months old, her father took his own life on Christmas Eve, leaving her mother to bring her, her twin sister and two daughters from her father’s first marriage up.

Growing up, Downs was used to her mother holding three jobs and worrying about finding the money to pay her life insurance premiums.

That made a huge impression on Downs and she wanted to alleviate her mother’s financial stress.

She recalls: “My mum made it her priority to pay the insurance as she didn’t want us to be a burden on anyone if anything happened to her.

“When I was 15, I took the reins and said, ‘cancel the policy, if anything happens to you I’ll get a job’. After an open conversation, where I replaced her emotion with my logic, she cancelled it. It was a strange concept – the thing that caused her so much anxiety in her life was the thing she didn’t want to get rid of.”

Downs spent three years with her first financial services employer, Norwich Union. But the “pushy” sales environment and “crude marketing methods” commonplace in the industry at the time did not sit well with the moral values she had been taught by her mother.

She eventually became an IFA and set up Trentham Invest in 2003. “My fiancé at the time and I wanted to build a better life and be a part of the local community. He was a business consultant and I was a financial adviser, so we said we would set up a business together,” she explains. The knowledge that someone else was taking that leap with her provided Downs with a sense of security. However, that was short-lived as within six months her partner lost focus and their relationship had broken down.

Some may have ducked out of carrying on with the plan but, like her mother, Downs says she has the strength to block out any fears and focus on what is required to turn things around.

Five questions 

What is the best bit of advice you’ve received in your career?

Believe in who you are, always do your best, write everything down and cherish what you have.

What keeps you awake at night?

The tweeting owls.

What has had the most significant impact on financial advice in the last year?

Drawing pictures or building Lego models so clients can see what their financial pieces look like.

If I was in charge of the FCA for a day I would…?

Introduce a policy where everyone works as a pair for a month, then finds three strengths in each other to present.

Any advice for new advisers?

Money is just a tool for the life your clients can have. It’s the trowel and fork you need to help them grow their garden; watering, feeding, nurturing, trimming, pruning.

Building the perfect financial adviser

“Lots of people have an idea about a Plan A but really it’s only an idea and not a plan at all. They focus so much on Plan B that Plan A never worked,” she says.

Downs built her business by breaking her tasks into bite-sized pieces, focusing on one step at a time. It has obviously worked, as Trentham Invest has just moved into a new office twice the size of the last one. She says: “At most companies, the boss is disenfranchised from the business rather than being part of the team. I prefer to be in the centre of things so everyone understands where we are going, what we are doing and why.”

Downs has previously attracted criticism from some advisers over her willingness to transfer clients from defined benefit to defined contribution schemes. In her view, pension freedoms have contributed to transfers becoming a fad over the past couple of years. She points out she has always assessed her clients’ circumstances thoroughly before signing off any transfer.

“A DB transfer is not a new toy that advisers are just starting to play with – I’ve been advising on transfers for many years,” she says.

Scale of DB transfers by folded firms revealed

Returning to the Lego analogy, she argues DB transfers are simply trading one brick that does not fit with what clients want to build with another that slots in perfectly.

She adds that plenty of advisers do this with other policies that clients no longer need, so why not DB schemes? “You can’t catch everyone with the same net. If someone has a portfolio of properties they have built or inherited and their income in retirement is going to be supported from other resources, why wouldn’t you transfer a final salary scheme that is surplus to requirements?”

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