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Paul Chafer and Gareth Hope, Wren Sterling’s Chief Commercial Officer and Head of Research respectively, discuss how financial planning has been impacted by events of recent years, how it might evolve further, and the way Wren Sterling is setting clients up for the future.
Money Matters: In the face of so much global and domestic change, it’s important to think back to why we work with a financial adviser in the first place. So, in your mind, what is the primary objective of financial planning?
Gareth Hope: Lots of clients ask about investing and recent performance, understandably. They can focus on investment return as the be all and end all – but that’s not why we all go to work and earn money. Money is just a tool. We all have something in mind to use it for. It might be paying the bills when you no longer work, trips of a lifetime or helping your kids buy a house or go to uni.
That’s the ethos I have – that financial planning is helping clients achieve a means to an end. Your adviser is there to help you explore and articulate your objectives, so you can do the things you want to do, rather than leaving a long bucket list.
Paul Chafer: There’s an idea that your money should outlive you by a minimum of one day. Or more if you want to leave a legacy. But nobody – perhaps apart from people in the investment management sector – talks about “looking for a risk rated investment volatility return of xyz…”. That’s just not how people talk about money. We talk about our desire to own a house, to stop working at 56, or ensure grandchildren can get on the property ladder. We are pulled towards something we want to achieve, or pushed away from things we don’t want to happen – like not being able to pay the bills in retirement.You’d want to know your doctor was keeping up with the latest knowledge and research. And it’s the same here. We’ve been working hard behind the scenes…
MM: We’ve been through a very buoyant phase in the market for the last 10 years, but the here and now looks choppy. How important is investment performance is for client satisfaction?
GH: If a client sees poor performance in their investments – or less than they think it should be (because they’re watching a benchmark) it’s bound to lead to some unhappiness. I think the industry needs to be better at setting out what it can do for its clients. If we say “we help you pick better investments” then it’s not surprising that that’s what clients expect!
Our job is to help them articulate what they want and plan for how to get there. It’s an emotive conversation to draw out what’s important to them, and until we articulate that better as an industry, we will always be chasing last year’s numbers.
PC: Financial plans are often part of a 10-year plus journey, and it’s a fact that there will be some ups and downs. It’s about being on track – on track to leave work at 56, to go on a cruise twice a year, mortgage paid off. That’s why we have financial reviews. To make sure everything is working as it should, towards that long term plan.
MM: How do you think the demands of clients are changing?
PC: I don’t believe the fundamentals of financial advice are changing, but I think the way that people interact with financial planning is. Our client surveys tell us people want regular contact and not necessarily in a formal context. It needs to be convenient and emotionally reassuring.
What we’re concerned with is whether their objectives have changed. I don’t want to run out of money, I don’t want to live a life where I can’t afford to do what I want to do.
GH: In a more connected digital world, clients expect things faster. In a world where I can login to my savings account and move money into my current account in 5 minutes, that’s the expectation that’s being built in the financial planning space. But this is an important point – it’s not currently possible with most products and plans that we use with our clients. investments have to be sold which will typically take 3 or 4 days to land as cash. That cash is then sent to the client, which may take another day or so. Sadly, you’re not talking 5 minutes, you’re maybe looking at a minimum of 5 working days. It’s a really difficult place where expectations run ahead of capability and I think as an industry we need to be better at managing those expectations.
The providers we work with want to improve that when I speak to them. But that change always seems to take longer than any of us would like.
MM: So, what are we doing to make things quicker and easier?
PC: We’ve digitised some areas before and during the pandemic. Let’s start with the most obvious changes, like online initial advice calls. Whole families have been able to sit in and ask questions about the reasons behind our recommendations, which has really benefited everyone – not least the time saved.
Behind the scenes, we’ve been reviewing our service programmes and investing in further operational support to help us process client reviews faster where we recommend no change to their existing investment strategy.
We’ve also been investing in technology and digitising processes to use human resource more efficiently – the upcoming use of Docusign to capture signatures online which reduces the need for paper (and also delays), plus helping more of our clients sign up for our PF portal where they can access live valuations for the majority of assets.
We’re eagerly awaiting improvements elsewhere in the industry, like the much-vaunted Pensions Dashboard. It should make the visibility of pensions much easier for everyone, but it’s been delayed for some time, and I think many in the industry have made plans without relying on it.
Financial plans are often part of a 10-year plus journey, and it’s a fact that there will be some ups and downs.
It’s about being on track – on track to leave work at 56, to go on a cruise twice a year, mortgage paid off. That’s why we have financial reviews. To make sure everything is working as it should, towards that long term plan.
MM: So, what are we doing to make things quicker and easier?
PC: We’ve digitised some areas before and during the pandemic. Let’s start with the most obvious changes, like online initial advice calls. Whole families have been able to sit in and ask questions about the reasons behind our recommendations, which has really benefited everyone – not least the time saved.
Behind the scenes, we’ve been reviewing our service programmes and investing in further operational support to help us process client reviews faster where we recommend no change to their existing investment strategy.
We’ve also been investing in technology and digitising processes to use human resource more efficiently – the upcoming use of Docusign to capture signatures online which reduces the need for paper (and also delays), plus helping more of our clients sign up for our PF portal where they can access live valuations for the majority of assets.
We’re eagerly awaiting improvements elsewhere in the industry, like the much-vaunted Pensions Dashboard. It should make the visibility of pensions much easier for everyone, but it’s been delayed for some time, and I think many in the industry have made plans without relying on it.
MM: As part of the provider selection process do we consider how easy it is to work with them? How long it takes to return information? That type of thing?
GH: Yes, as much as we can, we look at how easy they are to work with. If they make mistakes, or are slow to get hold of information, then we factor that into our decisions. All these things contribute to the client’s experience with us, and it’s important we give them the best outcome we can.
MM: Do you think the days of the once-a-year annual review with tea and biscuits are numbered?
PC: Yes, and I’ll certainly miss the biscuits. But it’s clear from feedback that clients don’t always need or want a yearly review – but they do want contact from their adviser. Others might need to talk to their advisers twice a year. It comes down to the client. Have they had a change of circumstances? Do they have a complex plan? The ‘one size fits all’ approach is certainly gone. And I think the pandemic has helped us all to think about this differently.
MM: What’s in our advice tool bag when clients come for a review?
PC: As a business we’re always keeping an eye on market developments. As things change in the market, we refresh the solutions we offer, and we also develop relationships with providers and partners who can help deliver services that we’re not licensed to offer. You’d want to know your doctor was keeping up with the latest knowledge and research. And it’s the same here. We’ve been working hard behind the scenes, on our clients’ behalf.
For those who haven’t spoken to their adviser in a while, they most likely will not know about the work we’ve done on our ethical investing or intergenerational wealth offering.
GH: Yes, and we’ve also been training our advisers on supplementary services. For example, estate planning, so they know when to identify needs and where a third party is needed to fulfil it. For example, Will writing falls under that, but we’re not solicitors. Our advisers will know who to contact on our clients’ behalf.
PC: No one can be an expert in everything. But if you’ve got a complex situation, how do you know if you need a financial adviser, tax adviser or accountant? That’s why we have these relationships. We’ve done the leg work so our clients have access to a trusted professional, at their point of need. The advantage of going through us is that your adviser remains in the conversation and will have factored it in to your financial plans. Sometimes things don’t work out as well, so having your adviser there to give things a nudge is also to your advantage.
MM: What can clients do if they require a service that we don’t already offer?
PC: Recently a client asked me for help locating their pensions as they were having trouble locating their benefits. We don’t provide a pension tracing service, but we did point them towards the resources they needed. If these requests are a one-off – it’s a sign posting job. If it’s a regular occurrence, then we’d see there was a need among our clients and a need for a more formal solution, which we would put in place.
In some cases, we get there first. We launched our ESG investing offering prior to the explosion of interest in 2020 and we’ve had relationships with other professionals for many years – we probably haven’t been effective enough at communicating that to be honest. Our training will make our advisers better at picking up those needs too.
What we’re seeing now is more of a focus on estate planning. The pandemic has focused minds and given people time, so we’ve had a lot of enquiries for Will writing services and creating Trusts and we’ve provided training accordingly. My advice to a client is; if you’ve got a requirement that your adviser doesn’t know about but you’re not sure whether we can help, just ask the question. We might not be able to meet it ourselves, but there’s a good chance we can recommend a professional that we’re confident in who understands our client service ethos. Please speak to your adviser in the first instance and they can refer you to one of our trusted third parties, if required. If you can’t see a service you require on our list, please raise it with your adviser or you can contact Wren Sterling’s Commercial team directly at commercial@wrensterling.com