Adviser success story: Taking the long-term view
We asked Gary Bodle from wealth management firm Investment Choices for his top practice management tips. Learn what’s driving his firm’s success and why he isn’t worried about robo-advisers.
Gary Bodle, Investment Choices
When your mature clients come to you for real long-term growth, without taking undue risk, where do you turn? Gary Bodle, Investment Choices, faced this dilemma in addition to growing his firm. He shares the top practice management tips driving his firm’s success and reveals why he isn’t worried about robo-advisers.
Investment Choices fact file
• Firm established in 1999
• Based in Tenterden – a leafy town in Kent
• £70m under advice
• Most clients are retired with an average age of 68. They are typically married with no debt and have roughly £350k invested
What keeps your clients up at night?
“Other than a nuclear strike, I don’t think there’s much that keeps the clients up at night. Most of them are wondering what to do with their capital, i.e. how much do we spend, and how much are we going to need for possible later care?” says Gary. His clients let him pay attention to market trends and volatility.
“Once technology funds start becoming the best performers, then sometimes we have to start worrying the market might be getting a bit too high,” he observes. But, like his clients, Gary is pragmatic about short-term market movements, instead seeking the long-term, steady returns they need.
Investment Choices specialises in helping older clients with well-established savings and investment portfolios. The adviser’s philosophy centres on delivering consistent investment outcomes, providing the potential for less fluctuation and real growth over the long term. Clients need to beat inflation, but not at the risk of catastrophic losses they don’t have time to make good. They don’t need investments with great upside potential and downside risk to match, but strategies that provide some certainty that their money will last for the rest of their lives.
Multi-asset strategies and diversification deliver long-term returns
Wherever we are in the investment cycle, the same rules apply: well-researched diversification remains the key to those more reliable, long-term returns his clients prioritise. As Gary says, “Having a team of 40 or 50 analysts, strategists and economists at Russell Investments who adjust the portfolios internally to match with their views really helps.” Multi-asset funds allow the portfolio manager to take some risk off the table to bank on potential drawdowns in the value of our clients’ assets, within parameters, because the client is investing for the long term. So, it’s not all risk on or risk off. It is widely spread.”
Shared adviser views on ‘regulatory overload’
Multi-asset strategies may protect Investment Choices’ clients from volatility concerns, but nothing can shield small firms like Gary’s from the regulatory burden many feel is too heavy.
In fact, ‘regulatory overload’ was a key theme across the Financial Conduct Authority (FCA) advisory panels’ 2017 annual reports. The panel representing smaller businesses highlighted too many data requests as just one of the issues facing firms. Echoing the sentiment in the report, Gary says of the FCA, “While doing good work catching out unscrupulous advisers, the bureaucracy can be burdensome.”
Preparing for the future
As a business owner in his 50s, Gary recognises retirement is on the horizon for him, as well as his clients. Many firms of Investment Choices’ size are being bought by larger businesses. While Gary says he might consider a merger with another firm of quality financial advisers in the future, for the time being, he remains focused on growing the business in its current form.
Growth plans emphasise replacing his ageing client base and scaling up without recruiting additional advisers, “That’s always a challenge, and something we’re working very hard on, at the moment,” Gary says.
While recognising the rise of robo-advice, Gary doesn’t see it as much of a threat to his firm. “Will robo-advice come into it more in future? Well, my view on that is yes, for those who have the know-how to use it.” He adds, “I think 20 and 30-year-olds just can’t do anything without a smartphone in front of them. But we’re not dealing with that client base. Also, people will still want to sit down and see the colour of my eyes as an adviser – someone they can trust, who’s highly qualified and highly experienced in making sure that their assets are all in the right areas at the right time, to produce the right results for them.”
Gary Bodle’s top three practice management tips
1. Get back to basics
“I’ve had some client meetings where I’ve just said ‘Tell me your story’ that have gone on for about 30 or 40 minutes. We’ve been able to think a bit more deeply about what our clients are actually trying to achieve.”
2. Disengage unprofitable clients
“Get rid of those that are stealing your time and are not profitable. This is a hard one to do as some are your friends.”
3. Don’t underestimate the impact of good practice management
Gary sees effective practice management as central to the continued success of Investment Choices, having already helped take his firm’s fee-based practice to the next level.
Delivering on investor expectations
Retired or soon-to-retire clients need real returns but cannot tolerate dramatic volatility to achieve them. By continuing to pursue carefully-researched diversification strategies, coupled with a detailed understanding of clients’ individual objectives and a tight focus on practice management, Investment Choices ought to deliver on investors’ expectations and thrive until Gary himself is ready to retire.