Finding financial advice for your clients...Finding the right financial adviser 9 Your next step...

Finding financial advice for your clients

For more information call 0333 323 9060 www.theprivateoffice.com 1

Finding financial advice for your clientsA guide to referring in professional services.


www.theprivateoffice.com For more information call 0333 323 90602

Introduction 3

The risks 4

The rewards 5

When should you refer? 6

Finding the right financial adviser 9

Your next step check list 14

Contents



We understand that referring a client to another adviser can be a daunting task and is not without risk. You may worry that our professional standards do not match your own or have concerns about us referring your clients elsewhere. At The Private Office, we fully acknowledge that the risks of recommending a financial adviser are significant but so are the potential rewards. We understand how critical client relationships are and we ensure that our service standards match your own whilst doing all we can to enhance your relationship with your client.

We have a long history of successful and enduring working relationships with accountants, solicitors and other advisers alike. Bringing together our collective experience, we have produced this guide to help you identify ways we feel this process can strengthen and develop your existing relationship with those clients.

This guide is designed to help you identify the risks and rewards of referring, looks at when clients may benefit from further support and highlights the positive, client-specific implications. We have also created a useful checklist of factors to help you select the right advisory firm for your clients.

We have included some peer-to-peer examples from some of these professionals in order to show you how this relationship can and has worked in the past.

We hope you enjoy reading our guide to finding a financial adviser for you and your client and would welcome any feedback you may have. We would be delighted to meet with you either at our office or yours to discuss how we may work together.

Best wishes

Stuart Philips Alistair Callander CEO CEO

Introduction

Stuart PhillipsAlistair Callander



There may be other associated risks that you will need to assess on a case-by-case basis; however, addressing these 4 as a starting point will help to ensure that your referral relationships are successful.

Trust is a vital factor in any referral relationship. We’re all familiar with the horror stories of professional relationships gone wrong, where clients are stolen or dissuaded away from their current adviser. You should feel that your best interests, as well as your clients’, are safe in the hands of the financial professional you choose to refer to.

A referral should be an extension of your own service and, as such, it’s of vital importance that your referee’s service standards match your own. Addressing your service expectations before the commencement of any referral relationship can help to mitigate this reputational risk and guarantee that the adviser you’re working with continues to provide the high level of service your client has come to expect from you and your firm.

Referring clients also poses the risks that your referee may not do the right thing by your client. It is vitally important to find a financial adviser that understands the needs of your clients and has their best interests at heart as you do.

A lack of experience or a poor track record of success is also a risk when referring. Without the right experience or a good track record your contact may not be able to deliver the right results for you or your client.

The risks

Referring your clients to another professional is not without its risks. We have identified 4 risk categories that should be considered before each potential referral: trust, standards,

interests and experience.



A referral in a niche area where specialist knowledge is required can help to further your own experience and provide the client with another facet to your service.

The ability to offer a multi-faceted service can, in turn, also be rewarding; making a referral can allow you to offer a more well-rounded service to your client, increasing the quality and scope of your own proposition.

The rewards

Whilst the risks are substantial, the potential rewards from referring to another adviser are great and can reap a number of positive effects.

“Referring to another adviser can reinforce an existing client relationship, demonstrating a desire to do what’s best for your client.”

Susan TaitPARTNER



BirthHigh-net worth individuals should consider their financial planning ahead of a new arrival. The organisation and guidance of an adviser can add far more security to lifetime events, such as financing their child’s education, setting aside ‘nest-egg’ savings, planning for general family expenses and extending or purchasing a property.

Marriage and partnershipsMarriage, civil partnerships and cohabitation can also be triggers to seek financial advice. These are times when creating some financial structure and protection can benefit a client for the rest of their life.

Consider:

• prenuptial agreements;

• legacy and succession planning; and

• trust arrangements.

DivorceSeparations can be intricate, and sometimes acrimonious, affairs that require the guidance of a team of professionals. Some cases require highly specialised input to protect all of the involved parties and provide positive and tailored solutions for the family. Financial advice can make a huge difference to the outcome of divorce or separation proceedings for either or both parties.

Business eventsClients may need to seek financial counsel at business set-up or acquisition, depending on their end goal. Receiving advice at this point can help to make that journey far smoother.

Business exits or sales too are often complex, involving several advisers and innumerable options for the client and may require specialist knowledge.

When should you refer?

There are many times in a person’s life when they may need the guidance of an independent financial adviser. However, some events tend to trigger action more often than others. We call these ‘big life events’:



RetirementRetirement often results in a substantial change in lifestyle for most people and such a change often requires financial advice. It is important to ensure that clients’ assets cover their living expenses and support their lifestyle and plans over the duration of their lifetime.

With frequent legislation changes and announcements, and the average life span increasing, the road to an easy retirement is becoming bumpy.

Consider:

• living expenses,

• care costs; and

• cash flow planning.

DeathA death in the family is a difficult time for all involved and seeking financial planning advice early can help to mitigate unwanted hassles and stresses. Without proper planning such stresses can lead to poor judgement and unfortunate outcomes.

Unforeseen circumstancesWinning the lottery, personal injury or any number of huge life changing situations can require expert financial advice to ensure the best possible outcome for the client through structural and financial planning.

The sudden or planned introduction of capital can be a stressful time for clients. Utilising the services of a financial adviser can facilitate the formation of a careful and measured approach to planning, looking at a client’s behaviour; balancing their objectives and attitude to risk and help them find the right investment solution to match it. It is important that your chosen advisers act without bias.

“The impact of their work was inestimable”Whilst working for a family going through a complicated separation, a family lawyer specialising in divorce mediation and proceedings sought the assistance of an independent financial adviser.

‘My client had extensive assets held in a complex corporate, pensions and trust structure. I brought independent financial advisers TPO into the team very early in the case, as soon as the client had instructed me and built a team in the office to include corporate and private client specialists. TPOs knowledge runs across the board not just in the areas of pensions, pension sharing or tax. They have astonishing financial erudition and understand all aspects of complex cases. TPO really helped to develop and structure a settlement package for the client which meant that companies and trusts were restructured but maintained. The impact of their work was inestimable and their inspired ideas really helped us. They worked exceptionally well as part of our team.



“I was unsure how much value a financial adviser could have in helping my client in a corporate restructuring case. Having worked with TPO on a number of cases I now know the value they can bring with the very broad perspective their advisers have of all aspects of corporate work and of wider family assets, trusts, pensions and borrowing capacity etc. This really adds a different dimension to the advice I am able to give my clients. The value they add to clients is immense.”

Corporate Lawyer, East Yorkshire




Finding the right financial adviser

The Private Office have a long history of working alongside other financial services professionals to deliver the best results for a range of clients across a breadth of sectors and services. Having maintained some of our own professional relationships for more than 20 years, we have created a checklist of 6 key factors you should consider before embarking on any referral relationship.




2. Assess their qualifications and experience

How are they qualified?

How long have they been advising?

If the client requires advice in an area of speciality – How long have they been advising in this area?

Every adviser must be qualified to a minimum standard before they can practice. The basic accreditation awarded by the Chartered Insurance Institute, or CII, is a Diploma, however, these qualifications also extend to Advanced Diploma, Chartered status and Fellowship status. Assessing your potential contact’s qualification level allows for a degree of quality control and can provide comfort that they have the right technical knowledge to support your client and deliver a service in line with your own.

The Private Office are a firm of Chartered Financial Planners, a distinguished title that is awarded by the Chartered Insurance Institute, or CII, to firms that meet their exacting and rigorous standards, however, other credible awarding bodies exist. As such, we are recognised by the CII as acting with the highest level of merit, integrity, capability and commitment to ethical practice, with our clients’ best interests at the heart of our corporate culture.

1. Understand their offering

Are they independent or restricted?

If restricted – What type of restriction do they operate under?

Financial advisers can offer two types of advice: independent or restricted.

The Financial Conduct Authority (FCA) defines these as:

Independent advice is based on whole of market research on all types of retail investment products appropriate to your objectives and requirements. Independent advice must be given without bias or restriction and must consider products from all providers or firms.

Restricted advice is exactly that, restricted. The restriction can be on the types of products an adviser or firm is able to recommend, the provider they can recommend, or both. For example:

• a restricted adviser may focus on one market, such as pensions, and can consider products from any provider in this market;

• a restricted adviser may only work with one provider and consider only their products when making a recommendation; or

• a restricted adviser may consider products from some, but not all, providers.

It is important to understand the type of advice offering you are referring your clients to as each one has its own advantages and limitations.



3. Consider their previous and existing professional relationships

Do they have a good track record of working with others?

What relationship styles have they adopted previously?

Do they prefer to work independently or collaboratively?

Working with a financial adviser should be beneficial to any professional who refers a client. The enhanced service from good quality advice will always enhance the reputation of the original referrer either with the referred client or future clients. As such it is important to choose an independent financial adviser (IFA) who will work closely with you when it is appropriate to ensure the highest quality of service for your client.

When choosing a financial adviser to refer it is important to choose one which works closely with their clients’ other professional advisers, including the original referrer, to help the client as much as possible. TPO see the advising of a client as very much a team effort and liaise closely with a client’s other professionals at all the relevant stages of the advice process.

The wealth of experience within TPO means that we can identify and provide assistance in all areas of wealth management; our expertise is not limited solely to the provision of investment advice. This can create numerous additional advice points for the referrer such as tax, trusts, off-shore holdings, inheritance planning and corporate structuring among other things as well as enhancing the reputation of the original referrer.



4. Research their fees

What is their fee structure?

How do they outline and communicate their services and costs to clients?

A good IFA will have a structured approach to fees. They should be clearly laid out and transparent across their services, outlining what their advice will cost your clients and what they will receive for their money.

Their fees should be independent of solution or products and not driven by either.

5. Determine their specialisms

Do they have any areas of speciality?

What qualifications do they hold to support this?

What experience do they have in this area?

Specialist advisers bring a depth of knowledge to our partnership allowing us to create a more detailed, bespoke service for each client. Far more than would be possible without specialisation.

By having a team of advisers who have specialisms across the spectrum of financial advice we are able to draw on the expertise of the individual to add to the experience of the partnership. For our advisers being exposed to each other’s cases in order to help guide the client to the best possible outcome means being able to offer a truly bespoke and holistic service.

Specialist advice becomes increasingly important the more complicated the case is. Specialist advisers are able to draw on more in depth knowledge within their area of financial expertise and so are able to deliver a more effective solution to the client. As well as creating a more efficient business model, delivering the same level of service more efficiently and effectively.



6. Cash management

Can the firm offer independent whole of market cash advice?

Do they have expertise in this specific area?

Do they specialise in cash deposit advice?

One of the key benefits to our clients is our relationship with our sister company Savings Champion.

Savings Champion’s Concierge Service is a cash management service for individuals with more than £100,000 in savings. The Concierge Service is designed to increase the effective interest rate of your savings by moving it from bank to bank to get the best interest rates. This means that your investments become more profitable without any direct administration.

As one of the few financial advisors who offer such a service TPO aims to give a more effective service to its clients and manage their money in the most productive way possibly leading to better portfolio growth outcomes.

“Clients are often worried about what will happen if they divorce or if they pass assets to their children who subsequently divorce. I have worked with TPO on many cases where we have discussed the client’s aims and concerns in detail and developed a protection strategy which reflects the client’s needs. The results have been inspired and effective. They make a brilliant part of any client advice team.” Private Client, Tax Specialist, Leeds



Your next step check list

OneAre they fully independent?

TwoAre they a Chartered Firm?

ThreeHow long has the firm been in business?

FourWhat is their approach to fees?

FiveDo their service standards match your own?

Six Do they have the best interests of a client at heart?

SevenDo they have specialist cash management expertise?

EightDo you trust them?

15For more information call 0333 323 9060 www.theprivateoffice.com

We hope you found our guide useful and informative and would welcome any feedback you may have. We would be delighted to meet with you either at our office or yours to discuss how we may work together.

Please call us on 0333 323 9060 or visit www.theprivateoffice.com

Contact us




Leeds | London | Bath

Head Office

No 2 The Bourse, Leeds LS1 5DE

T: 0333 323 9060E: [email protected]: theprivateoffice.com

The Private Office and TPO are trading names of The Private Office Limited, authorised and regulated by the Financial Conduct Authority, firm reference number 789482. Registered in England and Wales at 2 The Bourse, Leeds LS1 5DE, company number 10226899.

The Financial Conduct Authority does not regulate tax advice or Trusts.

The entry may be checked on the Financial Services Register by visiting www.fca.org.uk/register.

© 2018 The Private Office.

11/2018

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