2010-present: Future Asset Management, mortgage adviser
2011-present: Future Asset Management, IFA
2013-Future Asset Management, partner/adviser
Making his father's firm soar (pt.1)
When David Wingar appeared as a New Model Adviser® cover star in 2008, his son Graham was in the middle of an engineering degree at Cardiff University. Little did he know 10 years on, Graham would be his business partner and eventual successor at Bridgend-based Future Asset Management. Or that he would jump out of an aeroplane for another cover feature.
I meet with Graham on what I am told is a rare day of glorious sunshine in the heart of South Wales. His office is next to David’s, in which the original New Model Adviser® cover is displayed in a picture frame on the wall.
The daredevil pursuits of his personal life, which include the aforementioned skydiving and mountain biking, are distinct from his working approach. At Future, Wingar is focusing on stability and security as he begins preparations to make the move to the more spacious room next door. However, neither father nor son had anticipated they would be here in 2018.
‘There’s a natural objection to following in your father’s footsteps,’ says Wingar, who gained his degree in 2009. ‘But we are different in how we look at things. I’m quite cynical, and I ask “why” a lot. I don’t take things at face value.’
Making his father's firm soar (pt.2)
Upon graduation, Wingar progressed to the last stage of interviews for the graduate scheme at Triumph Motorcycles. But he fell at the final hurdle.
If it was not for that disappointment, things may have played out very differently. Wingar joined the family business in 2010, and quickly found working for his dad was not so bad after all. Now, Wingar is a partner and self-employed adviser.
‘There are parts of it I like. Other parts are a bit annoying,’ he says. ‘But I mostly enjoy the flexibility, especially now I have two daughters, aged three and five.’
Winds of change (pt. 1)
Future has maintained a steady seven or eight employees since 2015, while client numbers have grown consistently from 188 to a projected 254 in 2018. Funds under advice have risen steadily in the same period, from £25 million to a projected £36 million.
The business is not huge in terms of assets. But it is profit and efficiency Wingar hopes to streamline on taking the helm.
He says: ‘When my dad first discussed leaving, his goal was for me to replace him, someone to replace me, and so on. I said: “You’re looking at that wrongly.”
‘We need to look at the roles and the job tasks, and replace those. I wrote down all our staff and every single task that gets done in the company, and identified who does what.’
Instead of shuffling everybody up the ladder, Future can cut out simplistic administration tasks by getting somebody in to do those. As a result, there is no need to change the rest of the firm’s staffing.
‘That is important to me,’ says Wingar. ‘Being a small firm, the amount of time that goes into training someone is really significant.’
Wingar is content with the firm’s current advisers. He foresees it could turn over £800,000 to £1 million just by employing new support staff, who are much easier to train.
‘That is all you need; you can make £400,000-plus profit then,’ he says. ‘If we’re not looking to build up and sell, it’s profit, not funds under management, that really matters.
‘We have made £360,000 profit on this year’s turnover. But I would expect the profit to be around £400,000 to £500,000 next year.’
Winds of change (pt.2)
The firm’s total income has grown from £548,000 in 2015 to a projected £650,000 this year, while costs have reduced from £306,000 to a projected £280,000 over the same period. Wingar admitted trying to change his father’s mindset ahead of the transition has been a challenge.
‘I’ve been trying to get him on board with all this. But he’s had a completely different outlook all the way through, and I’ve only been here since 2010,’ he says. ‘The changes from 2010 to now aren’t as big as from 1990, when he started in financial services.
‘He likes seeing the clients and still writes most of the business. But the position I’ve been in, which has involved looking at a lot of other aspects of the business, has helped me see other ways of doing things.’
The firm also handles its compliance in house. A compliance officer oversees all regulatory and competency-related aspects of the business.
Future is based less than 15 miles from Port Talbot. Like many local firms, it fielded a deluge of interest from steelworkers looking to transfer out of the British Steel Pension Scheme (BSPS) towards the end of last year.
The firm saw 30 individuals and transferred eight. It did not charge the other 22, as Wingar said a simple triage meeting was enough for those steelworkers to realise transferring out would not be necessary for them.
This position is made more pointed after the Financial Conduct Authority (FCA) proposed banning contingent charging on defined benefit (DB) transfers. This would mean clients only paying for advice if a transfer goes ahead.
Wingar points out the sessions did not amount to full-blooded advice. He says most conversations were with people concerned BSPS2 would collapse. ‘We laid out the facts and said that really shouldn’t be the case,’ he says. ‘That’s not advice. That’s discussing the merits of BSPS2, what the Pension Protection Fund is about and so on.
‘Some said their transfer value was enhanced, and we would inform them it was actually reduced. Or they’d say the transfer value was really high and would never be higher, and we’d clarify their income was really high and would never be higher.
‘Once we laid out all the facts, a lot realised they didn’t have to transfer.’
Wingar said the firm’s approach to a unique situation such as British Steel was to ‘take it on the chin’ and not charge for those hour-long meetings. This was with the hope providing honest information would do more for the profile of Future in the long run.
Spelling it out
Returning to the issue of contingent charging, Wingar disagrees with the FCA’s analysis it has been a negative influence on firms or caused harm to clients.
‘When they talk about contingent charging, the issue is it creates a bias for an adviser to recommend a transfer,’ he says. ‘However, the FCA has missed the fact that, in our position, where both myself and my father are partners of the business, we don’t benefit from recommending a transfer.’
He says if they recommend a transfer that is not best for the client, it is more of a risk to the business than the fee is worth.
‘If you understand your client and learn they want a guaranteed pension; have no intention of doing anything other than having an income; only want to retire at their normal retirement day; have no health concerns; and have no need for death benefits, then you can ask why they are pointing in that direction in the first place,’ he says.
‘All of a sudden, they’re not. And that’s where that triage bit comes in. It was a bit annoying I had to explain that to the FCA,’ he says.
Future aims to help whomever it can, rather than targeting particular types of clients. ‘We will speak to anyone and deal with anyone,’ says Wingar.
‘There might be certain times where your charging structure makes it uneconomical to take a client on. But we will always have a phone call and point them in the right direction, even if we’re not getting paid for it. That, I think, has a good local feel to it.’
This means Future will often help clients’ children set up a £100 ISA. Wingar says: ‘It’s not a cross-subsidy thing, it’s a marketing thing.’
He adds: ‘That person is now with us if and when they inherit, if and when they come to earn more and save more, or want to buy a house, or their friend asks who they use. All of those things are important to us. We’re not here just for this year or next year.’
When asked to define his approach, Wingar says: ‘I’m a big fan of efficiency. If you can get something done more quickly by someone else doing it, make that call. My opinion is you can get 90% of the way there with half the time and effort.’ He says the most important thing is to focus your time and thought process on the things that are most important.
‘It’s about doing the right thing, and having the right people who are being paid the right amount,’ he says. ‘A big thing for me is protecting our staff. They work with us, so they should be paid properly.’
The fee bit...
Future Asset Management has three categories of ongoing service.
Option one relates to specific products in investment and pension planning. This comes with an ongoing charge of 75 basis points (bps), with no further retainer fee.
Option two, the full personal financial planning service, includes the 75 bps charge plus a £797 annual fixed fee. A corporate service, option three, carries a £1,267 annual fixed fee.
An initial meeting costs £297, while the implementation of either the personal or corporate financial plan (option two or three) costs £757.
Advice on pension benefits, such as annuity or drawdown, costs 2%. Cashflow modelling carries a charge of £397 and a DB transfer analysis report £497.
Advice for the arrangement of all investments, including pension investment and referral to a discretionary fund manager, costs 4% of funds invested on the first £50,000 and 2% thereafter.
Wingar says: ‘We are trying to be profitable for a broad range of wealth and clients. We want to provide a service to as many people as possible.’
The investment bit...
Future outsources its investment work, with a focus on active managers who can demonstrate extensive research behind their decisions.
Wingar says: ‘We do a lot of fund of funds, multi-asset, DFM and model portfolio work. In my eyes that’s outsourcing, because the ultimate decision for asset allocation and other holdings is down to firms.
‘Our active approach isn’t a slight against passive investments.’ He says there is no right or wrong way, but he struggles with the notion of only considering passive investments.
Future outsources to Margetts, which charges 0.7%. Wingar says the in-depth research offered by the firm is a key reason for the relationship.
‘Seeing Margetts’ level of investment research makes me realise it’s just not something a firm of our size can do,’ he says. ‘If we were a bigger firm doing our own investment, we’d charge separately for it anyway. I’d see the total cost being about the same, whether we do it or someone else does it.
‘You can’t do all of the investment research and financial planning properly and do it for one fee.’