This series of posts is aimed at Financial Advisers and Financial Planners in the relatively early stages of their financial services career, wanting to understand how they can systematically attract and retain more and better clients, add more value in their chosen market niche AND enjoy a more rewarding and fulfilling career in the process – by training to be a fee-based Wealth Manager.
Firstly, I’ll review the distinct roles and responsibilities of a Financial Adviser compared with a Financial Planner in the wealth management process.
I’ll then move onto a reviewing roles and responsibilities of a fee-based Wealth Manager providing hybrid and augmented client service propositions, such as a Wealth Management Coach or Wealth Management Programme Director.
Finally, I’ll explain why I believe a hybrid client service proposition that includes a collaborative and coaching-based Wealth Management Programme at its core could be the best path forward for Financial Advisers and Financial Planners with the right personality and mindset.
By the end of this series of posts, you will understand the range of specialist and hybrid service propositions you could choose or aspire to offer, thereby helping you determine which service proposition best matches your target market and ambitions, empowering you to make a more informed decision about the direction in which you plan to develop your financial services career and business.
About Me
Hi, I’m Mark Pritchard-Jeffs, a Wealth Management Coach with over 35 years experience as an IFA and Senior Partner at St. James’s Place. Together with my training and development business partner, Andrew Dodson, we have come together as the Wealth for Life Partnership and founded our Wealth Manager Academy.
Our Mission
We are dedicated to the training and development of Financial Advisers who are in the relatively early stage of their careers, and who want to transcend the professional limitations of Financial Advisers and Financial Planners to become professional Wealth Managers. We’re seeking ambitious and forward-thinking financial services professionals with the basic skills, personality traits and values needed to market and deliver a comprehensive coaching-based and relationship-driven wealth management process that attracts and retains higher-net-worth clients, delivers more client satisfaction, promotes more advocacy and creates more enduring value and job satisfaction in the process. If that sounds like it could be you, read on!
Our Vision
Our Wealth Manager Academy offers structured Business Development Programmes designed to teach people like you the value-adding wealth management skills, tools, processes and systems you’ll need to succeed as a professional Wealth Manager. Participants attend a foundation course to obtain a provisional licence to market themselves as Wealth Management Programme Directors and through a (typically three year) development programme will eventually achieve Hereditas® Legacy Planning Practitioner status. This will be achieved by following a structured and guided course of formal coaching, training, personal development and self-study to move you from “where you are now” into a competent Wealth Manager, confident in your ability to market and deliver a fee-based wealth management service that attracts and retains higher-quality clients, generates stronger demand for your FCA-regulated financial services (if you choose to offer that service) and which creates more enduring value and fulfilment for yourself and the stakeholders in your business in the process.
Financial Advisers
Anyone can style themselves as a “financial adviser,” but the term Financial Adviser (with capital F and A) has a regulatory definition in the UK, referring to someone who is authorised and regulated by the Financial Conduct Authority (FCA) to advise upon and arrange transactions in regulated financial products (basically a specified range of investment accounts, pension plans, insurance policies, and mortgages). To become an FCA-regulated Financial Adviser, you must have gained appropriate professional qualifications and regulatory approvals.
I see Financial Advisers as specialists in advising on and arranging FCA-regulated transactions into FCA-regulated financial products in order to address a particular financial challenge or opportunity for a client. Their services are aimed at people who lack the time, inclination, and/or expertise to identify, arrange and manage suitable products and related transactions themselves.
Financial Advisers are generally compensated through pre-agreed fees (or commissions in the case of certain insurances) that are typically proportional to the value of the contributions and/or benefits provided by the financial products they advise on and arrange. If a potential client does not require a regulated financial product, they have little to offer, and the adviser is usually not paid for any preliminary work done.
Status & Qualifications
Some FCA-regulated financial advice businesses are Independent of all product providers from a legal perspective and are directly responsible to the end client for their advice and related services in the event of a complaint, dispute, or claim. Others are Tied to representing one or more FCA-regulated product providers, limiting their advice to the specific product offerings from those providers. In these cases, the product providers are obliged to take legal responsibility for the advice and related services provided to clients. In my view, neither legal status is inherently “better” or “worse” than the other. The best status for an adviser to adopt will depend on the scope and nature of the services they wish to provide to their clients, the niche they wish to serve and the systems, processes, resources and backing they want/need to have available to them and their clients. Irrespective of status, all FCA-regulated financial advice firms are required to maintain minimum levels of Professional Indemnity Insurance to protect their clients’ interests. The status, qualifications and authorisations of FCA-regulated Financial Advisers can be readily checked and corroborated on the FCA’s website.
Service Propositions
The services provided by a Financial Adviser are transactional in nature and include:
- Initial Advice and Service: Assisting clients in choosing and setting up new FCA-regulated products and arranging new FCA-regulated transactions.
- Ongoing Advice and Service: Managing and administering FCA-regulated products, held under their servicing agency. This includes the reviewing and updating of regular contribution rates, investment mandates, and making adjustments to policy-defined premiums, benefits, and loan terms. They also assist with claims, further advances, one-off contributions, income distributions, and capital withdrawals.
All Financial Advisers have a legal obligation to “Treat their Customers Fairly” by being open and honest about their regulatory status and authorisations, the range of products and services they offer, and the likely costs and benefits of the regulated financial products and services they advise on and arrange. They also have a statutory duty to “Know Their Client” sufficiently well enough to prevent financial crime and ensure that any financial products and related transactions they advise on are “Suitable” for the needs and goals of the person or entity being advised and that any transactions are arranged effectively, efficiently and in a timely manner under a “Best Execution” policy.
Niche Markets
Some Financial Advisers specialise in particular types of regulated products, such as Pensions Consultants, Investment Advisers, Insurance Brokers and Mortgage Advisers. Others are more akin to General Practitioners in the medical profession, providing basic advice and services across multiple product categories and referring clients to specialists whenever the needs and solutions fall outside their areas of expertise. Additionally, some Financial Advisers develop specific expertise in niche target markets, typically based on understanding the needs of specific demographic groups, occupations, or life circumstances.
In Summary
An FCA-regulated Financial Adviser is a financial services professional providing personalised advice and related transactional services in respect of a predefined range of FCA-regulated financial products within a strict regulatory framework. Financial Advisers typically provide Initial and On-Going advice and services. There are currently around 28,227 FCA-regulated Financial Advisers working within approximately 16,098 FCA-regulated advice firms within the UK.
Personal financial planners are paid to review a client’s personal and financial circumstances and background/history and use those insights to help them develop financial models and devise financial plans and strategies that are a aligned with their life goals, priorities and/or vision.
Financial Planners
Specialist personal Financial Planners are paid to review a client’s personal and financial circumstances and background/history and use those insights to help them develop financial models and devise financial plans and strategies that are a aligned with their life goals, priorities and/or vision.
Services
A financial planning specialist will generally help their clients “take stock” and answer key questions such as, “Where am I now?“, “How did I get here?“, and “Where am I heading?” from a financial perspective, typically using visual financial planning software, along with related tools and processes to quantify personal expectations and financial consequences from various cashflow, liquidity, net worth and estate-planning perspectives based on a range of agreed or plausible assumptions, expectations and scenarios. Following a collaborative process that involves the building and testing of a “What-If” personal financial planning model, specialist financial planners and their clients gain a deep understanding of how sensitive desired outcomes and goals are to plausible and/or expected variations in key “Success Drivers” (typically things like lifestyle spending profiles, investment returns, career earnings, business performance, tax liabilities etc). This process informs and improves the lifestyle and financial decision-making process and encourages engaged clients to use the insights gained to solve anticipated problems by generating and testing new ideas, plans and strategies, motivating them to adopt the most effective and holistic solutions and helping them to seek out the personal and professional help and support they need to optimise the probability of achieving the most positive and successful outcomes over time.
Status & Qualifications
The process of “financial planning” (except where it involves specific advice on specific FCA-regulated financial products and related transactions) is not an FCA-regulated activity, so anyone can style themselves as a “financial planner”, however FCA-regulated financial planners (and planning firms) are able to demonstrate their professional credentials by achieving an exam and experience-based accreditation from a recognised professional body. The most highly regarded financial planning accreditation in the UK is that of Chartered Financial Planner, conferred by the Chartered Insurance Institute, followed closely by the Certified Financial Planner accreditation a slightly lower status qualification awarded by the Chartered Institute for Securities & Investment.
Niche Markets
As can be the case with Financial Advisers, some financial planners specialise in niche target markets (Business Owners, Retirees, Parents, Divorcees, Bereaved etc) and some specialise in niche planning areas (career and retirement planning, business development and exit planning and/or contingency and estate planning) depending on their personal interests, professional skills and life experiences – but within these confines, the vast majority adopt a substantively “whole life” (i.e. Lifestyle, Contingency & Estate Planning) approach.
In Summary
Professional financial planners are paid to help their clients understand their current financial situation. They guide their clients through the process of defining a compelling vision of their future, based on achievable lifestyle, contingency and estate planning goals (all of which are underpinned by plans and implementation strategies that are aligned with their priorities). An effective financial planning process delivered by an appropriately experienced and qualified financial planner can help a client understand what decisions they need to make and what actions they can take to move them forward. Chartered Financial Planners and Certified Financial Planners can demonstrate advanced financial planning skills, knowledge and experience through accreditation from an FCA-recognised professional body and will have a sound understanding of how mainstream regulated financial products work. There are currently around 7,000 Chartered Financial Planners registered in the UK, plus approximately 1,000 Certified Financial Planners.
Wealth Managers
Wealth Managers deal with the management of wealth in all its forms and typically focus on offering a comprehensive and holistic Wealth Under Management service to groups of connected individuals (families, business partners etc). The key role of a typical wealth manager is to help connected stakeholders manage their individual and shared wealth in accordance with a mutually agreeable agenda and shared vision, promoting harmony and unity, preserving the wealth and creating a positive and lasting legacy across and down subsequent generations.
Status & Qualifications
Typically, Wealth Managers are strategic thinkers and natural problem solvers. They usually have excellent financial planning, business planning, and management skills, along with strong inter-personal, relationship-building and coaching skills. Anyone can style themselves a “wealth manager” (there is no single qualification or accreditation that reliably denotes a qualified wealth manager), but they are generally degree-educated and possess extensive professional, financial, coaching and management experience. They are likely to be accredited financial professionals and/or may have a formal management qualification from a recognised professional body. If they work across international boundaries, they may have achieved Certified International Wealth Manager status from the Chartered Institute for Securities & Investment. And since communication and relationship management skills are so essential to the Wealth Manager role, they may also have a professional coaching certification.
Service Propositions
Most wealth managers in the UK will be employed in a directorial role (often with a small support staff) by individual family investment companies, trusts or other “special purpose vehicles” (collectively referred to as Family Offices) established specifically to administer and manage the combined wealth of one or more particularly affluent and multi-generational families or otherwise connected or related entities.
A typical Family Office will be the main communication, administration and wealth management hub for shared assets and investment activities, bringing a shared vision and agenda to life through the administration of day-to-day lifestyle-based services (such as a Concierge service and a Private Client Banking service), plus the purposeful planning and management of more strategic group objectives (such as wealth protection and preservation, capital growth, family harmony and unity, social responsibility, philanthropy and related legacy planning and management).
A significant focus of attention and effort will be Relationships Under Management and in particular, the process of coordinating and facilitating the effective collaboration of a client’s Wealth Management Team that includes the clients themselves plus all their nominated stakeholders (including potential beneficiaries), all their personal representatives (e.g. attorneys, trustees, guardians, executors) and all the specialist third-party professional service providers (e.g. accountants, lawyers, tax advisers, private bankers, Financial Advisers, financial planners, corporate financiers and business advisers) working on retainer or contracted on an ad-hoc basis “as needed” to address the opportunities, challenges and needs of individuals and the group as a whole as they arise.
In Summary
A professional wealth manager provides a comprehensive and far-reaching wealth management experience, based on an agenda that incorporates lifestyle, legacy, contingency and estate planning and management for individuals, families and otherwise related groups of connected stakeholders. They effectively act as project managers, orchestrating the collaboration of contributors and stakeholders, much like a conductor directs an orchestra.
The role can be crucial for managing group dynamics and family unity, optimising the benefits of shared wealth. Most senior wealth management roles in the UK are filled by individual Family Office managers who are employed to serve very wealthy families, with a small minority (less than 10%) offering wealth management services on commercial basis outside of a Family Office structure. There are around 1,000 recognised professional wealth managers operating in the UK.
