Adviser profile: Catherine Morgan and John Ward of Essendon Financial Planning

A chance meeting between Catherine Morgan and John Ward led to the pair setting up Essendon Financial Planning as an independent firm.

The CVs (pt.1)

Catherine Morgan

2018–present: Essendon Financial Planning, director

2016–present: Catherine Morgan Consultancy, director

2006–2016: HSBC, premier relationship manager IFA, various roles

Professional memberships/qualifications:

  • CeMAP
  • CEFA 1,2,3
  • DipFA
  • Certificate in pension transfer advice

The CVs (pt.1)

Catherine Morgan

2018–present: Essendon Financial Planning, director

2016–present: Catherine Morgan Consultancy, director

2006–2016: HSBC, premier relationship manager IFA, various roles

Professional memberships/qualifications:

  • CeMAP
  • CEFA 1,2,3
  • DipFA
  • Certificate in pension transfer advice

The CVs (pt.2)

John Ward

2015–present: Essendon Financial Planning, managing director

2012–2016: Connolly Gallen Financial Planning, financial planner

2002–2011: HSBC, sales manager, area sales manager

Professional memberships/qualifications:

  • Dip PFS CII Cert (MP) Diploma in financial advice
  • CeMAP

The 12-month goal...

Morgan and Ward's business goal for the next 12 months is:

To move to a total fixed fee model with the focus on financial planning and be more selective with the clients we want to engage with

A chance meeting

It was like a scene from a film. John Ward and Catherine Morgan had already crossed paths briefly while working for HSBC, where they helped each other lighten up an otherwise dreary training course. But it was over 10 years later that, chance would have it, they would meet again; this time the moment was ripe for an exciting business idea to be formed.

The pair ran into each other on the return train journey from the Personal Finance Society (PFS) Festival of Financial Planning last September. They found themselves in a meeting of minds: they were done with working in a restricted, and they say restrictive, model. They had a burning desire to run a financial planning business that focussed on clients and not products. Ward has just started a new business in Milton Keynes, Essendon Financial Planning, and Morgan was the perfect partner to bring it to life.

Ward had worked at HSBC for nine years and then joined a St James’s Place partner firm, Connolly Gallen Financial Planners, for four years.

At the point when Ward was considering whether the timing was right to strike out on his own, he got talking to the director of his village share club, Roger Eddowes. He ran local accountancy firm, Essendon Accounts & Tax.

This led to Ward to set up Essendon Financial Planning in 2015. It shared branding and an office with Eddowes’s firm, and received client referrals from the accountants.

Ward brought Essendon Financial Planning into the market as a restricted member of the Old Mutual Wealth-owned network Intrinsic. He built the client bank up from zero. Last October, he made the firm independent and directly authorised.

Making the move

It has been hard work making the switch to independent. But it has been well worth it, in Ward’s view.

'I felt a bit like a rabbit in the headlights at the beginning. From an investment perspective, when you are working from a restricted panel, you are almost working from a matrix,' he says. 'If someone is balanced and they want an actively managed fund, they have about three or four funds to choose from. So it is quite easy.

'When you become an IFA and you are directly authorised, you start looking at a universe of 6,000 to 9,000 funds. You must filter that down to the right one for the client, by looking at what is important to the client.'

He adds: 'I wanted to be independent to give my clients more choice. Being restricted, I did feel restricted. For example, an Intrinsic client came to me, wanting a life assurance policy with AIG. I agreed this was the most suitable solution.

'But it was not on the Intrinsic panel, so I had to put in a request with reasons I wanted to use it. It was a lot of paperwork and a week’s wait to get it approved, just to do that business for the client,' he says.

Eye-opening experiences

When Morgan and Ward met on the train, she was working as an IFA with Bedford-based Twigden Asset Management. Before that she had spent roughly 10 years at HSBC. This was until 2016, when she had fallen out of love with advice in the banking sector. 

'HSBC was one of the few banks to remain in the advice market. It found it a challenge to restructure its fee proposition to still engage with clients. It did not do it very well. We ended up being activity-driven and heavily targeted on the number of appointments you had every week.'

As an IFA at Twigden, Morgan had been asking herself if the advice sector was where she wanted to continue her career. But after discovering the commitment to true financial planning in the NextGen Planners community, run by Adam Carolan (director, Xentum) and Rohan Sivajoti (director, Postcard Planning), Morgan knew where she needed to be.

'All the stuff these guys are doing around planning, lifestyle financial planning, and coaching people: that was inspirational for me. I thought this is what I had been wanting to do for years. It was a life-changing moment. I could work in this environment and feel like I was not just selling products.'

Last summer, Morgan read consultant Paul Armson’s book and went to his BACK2Y financial planning festival.

'I pieced all these things together. I knew if I was going to remain in this profession, I had to be in a financial planning business.'

Morgan says the opportunity to network in the more gender-diverse environment of the NextGen Planners was also what she needed, after years of feeling quite isolated in such a male-dominated sector. 

Guiding the way

In January 2018 she launched a business aimed at coaching and guiding clients at the beginning of their financial journeys, or 'the ordinary client', as Morgan calls them. Now her coaching business, called The Money Panel, could play a part in the future of Essendon’s modern and diverse business model.

Part of Morgan’s enthusiasm for helping people with their finances stems from a life hurdle she overcame when working for HSBC and living in Jersey. She was on maternity leave and was struggling with some deep-seated emotional issues.

Morgan initially hired an image consultant to help her establish more confidence with her appearance. But she unexpectedly found the consultant also helped her begin a much healthier relationship with money.

‘I was a real emotional spender. If I felt bad about something in my life, I would get emotional and overspend,’ she says.

The troubled relationship with money began in her teenage years, when Morgan had a lot of body confidence issues. She suffered from eating disorders and from bullying at school.

'The day [the image consultant] weeded out my wardrobe, I sat down on the couch that evening, surrounded by bin bags to get rid of. I cried my eyes out,' she said.

'It was like someone had given me permission to get rid of all the crap in my life I had been hoarding for so long, just because I felt bad about myself.'

Morgan soon launched her own image consultancy. She has a great interest in helping others, not only with their self-confidence, but with how this intersects with their general wellbeing and their finances.

'The Money Panel still exists as a separate business. The stuff I am trialling with the coaching proposition is very different to advising. But it could become a service within the Essendon brand,' she says.

At the moment Morgan offers blog posts and coaching workshops to clients to help people with budgeting and their relationship with money.

'When I met John, I had worked with him before and already trusted him. I could see where they were taking Essendon, and John was already doing financial planning without really knowing it. He was using the in-house product provider cashflow tools.

'We talked about how we could build a really decent financial planning business. Now we are excited to have the opportunity to do that together,' Morgan says, smiling.

The fee bit...

 

Essendon offers a free initial meeting with the client. This is followed by a financial planning meeting where cashflow modelling software will be used. Essendon uses CashCalc software because it is ideal for clients who are new to the process of cashflow modelling.

Creating a financial plan costs the client £995. But if they implement the plan, this will be absorbed into the minimum implementation fee of £1,775.

Implementation is charged at 3% on the first £100,000. Between £100,000 and £250,000 the fee is 2%. For anything over £250,000 the client pays 1%.

Morgan says the model means they can create a financial plan for anybody. For Ward, the ‘ideal’ is to charge fixed fees across the board. He is keen on the idea of allowing clients to spread the cost over time, if that helps with affordability.

Clients with a portfolio of £100,000 or more get one annual review and a face to face meeting, as well as a quarterly magazine through Simply Biz, which runs the Essendon website.

For a portfolio size of £250,000 or more, they get two meetings a year. There are six-month and 12- month reviews, with any additional meetings, switches or updates to fact-finds included.

Essendon sponsors a financial planning radio show. Hosted by Morgan, it is called Money Mindset and airs on Secklow 105.5 FM. Both planners want their clients to have access to this, because it covers day-to-day personal finance topics.

 

The investment bit...

At the point of choosing a fund, if a model portfolio is suitable for the client, it uses Simply Biz Investment Services’ approved model portfolio list. Verbatim is one of the model portfolio providers. Ward says he has started using its solution largely because it is Rayner Spencer Mills-rated.

For research tools, Essendon uses Dynamic Planner and Synaptics. But Ward and Morgan say the current research process is time-intensive, and they are aiming to streamline by developing in-house model portfolios.

'At the moment we are having to do a lot of manual research. An item on our business planning list is looking at the different service models and building some model portfolios around those client segments,' says Morgan.

Ward says it is not viable to research the whole universe of up to 9,000 different funds for every client. He would prefer model portfolios that were regularly reviewed to ensure client suitability.

Essendon will look at model portfolios for clients with £50,000 or less to invest. On the other hand, if the client is investing nearer £500,000, the firm will carry out research to find bespoke investment solutions.

Morgan says investments will always be secondary to quality financial planning.

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