Choosing the right exit strategy is probably the biggest decision an IFA will ever have to make. IFA Magazine, Gunner & Co.’s sister company, looks at what some leading firms are offering advisers who want to retire. Neil Martin talks to Graham Cross, Managing Director and CEO at Helm Godfrey.
It would be fair to say that Helm Godfrey is a great believer in nurturing its own people, which is why when the firm takes on IFAs looking for an exit, they look for advisers with very similar client bases to their own.
London-based Helm Godfrey is a specialist provider of holistic, independent advice on wealth management, employee benefits and financial planning for businesses and individuals. From offices near Fenchurch Station, managing director Graham Cross and his large team of advisers, paraplanners and administrative staff look after clients who are mostly based in London, or the home counties.
When it does take on an IFA’s client base, it doesn’t see it as a quick process. Cross explained: “Our process is very much that we don’t believe that any transition from one adviser to another works with a single meeting handover. Ideally it needs to have a handover that probably lasts anywhere between 12 and 24 months, so we would expect the retiring adviser to be actively involved in the handover relationship.”
Firm’s Client Base
The type of IFA Helm Godfrey prefers is also dictated by the firm’s client base. The typical client, said Cross, is one that sees the value in getting advice.
“Just because a client might have an investment portfolio of five million for example,” said Cross “doesn’t necessarily mean they are going to be an ideal client. If their focus is chasing returns, then we’re probably not in the position to add value, so what we are seeking are those clients that see benefit from a firm providing a good advice process, where advice adds value.”
Which begs the question, are there clients that are willing to pay for that advice? Cross replied: “Indeed, absolutely, so that they actually see a real value in the actual advice process, rather than necessarily in things such as selecting individual funds, because that’s very much not where our focus is at all.”
As for the model that the firm can offer an IFA, Helm Godfrey would base this on a detailed analysis of their relationship they have with their clients. This would include the demographics of the client and where the income is coming from. What Cross and the firm look for is a very clear client agreement and one which shows that there is a need for an on-going service.
“Where a service is actually taking place,” said Cross, “that would be given a different value to one where there may be legacy trail income, or passive income, which might be coming in with no adviser engagement. There are two very different structures that would apply to clients that fall in between the particular groups.
“Very typically for most advisers, they have clients that sit in both sides, so we would look at each individual case on an individual basis. We would asses it, based on a very clear understanding of the advisor’s clients and the relationship that exists between them.”
Nor would Helm Godfrey see it as an advantage for the retiring IFA to head straight for the beach. According to Cross: “It’s very clear that the relationship pretty much immediately passes from old adviser to new adviser straight away, because obviously the new adviser needs to be motivated to develop the relationship with the client on an ongoing basis, but we wouldn’t have a situation whereby we would just say take a client base and say goodbye to the adviser, we would expect there to be an on-going relationship for a 12 to 24 month period.”
Also, as Cross stresses, that they are only interested in talking to IFAs that are genuinely retiring.
But how active is Helm Godfrey in seeking advisers who might be looking to close up the shop? Cross admits that it’s a real mixture. They have their own advisers who are looking to exit in five to ten years, and their own strategy to cope with that is to develop their own organic adviser base. They have started a programme which sees the firm developing certain paraplanners into advisers.
Cross said: “All our paraplanners for example come in as level four, so technically they are able to give advice, but they may not necessarily have the people relationship skills needed to do the advisory role, so we’re currently this year taking three advisers through that process. We very much hope they will be advisers from 2016. A new intake of paraplanners are coming in to replace the ones becoming advisers.”
Furthermore explained Cross, they have created an academy for their administrative staff who wish to become advisers. So this organic, self-regeneration process is very important for Helm Godfrey, and bringing in external resources from people retiring is just one way in which they will build their business. However, as Cross pointed out, it is difficult finding advisers who have the right client portfolio and ones that are located in the right place.
The last word goes to Cross: “We are also bringing in advisers who are self-employed, who are bringing in their clients, and also want to continue working, and that’s fine too, that’s an area of growth.
“We’re also bringing in new employed advisers who will work particularly very closely with our employed benefits department. We have a number of substantial corporate schemes whereby we have employees who require wealth management advice, and we are trying to grow and develop that particular part of the business as well.”
Helm Godfrey IFA Retirement Offer – At a Glance
- must have similar client base
- clients need to be those that value advice
- various business models available depending on the client’s needs
- interested in IFAs at differing levels
- likes to promote home-grown talent
If you’re looking at retirement options, Gunner & Co. can help you understand what options exist, and which might be best suited to you. Contact Louise for an open conversation, wherever you are in that journey. : firstname.lastname@example.org