Adviser Profile: Lucy Byrom, Casey Mills and Ian Jones from TFP Financial Planning

Lucy Byrom, Casey Mills and Ian Jones are pooling their cross-generational expertise to make TFP Financial Planning a forward-facing firm

Fees taken from financial products will be banned in the next 10 years, and those who remain wedded to percentages will get left behind or wiped out. At least these are the predictions of Casey Mills and Ian Jones, directors of TFP Financial Planning.

Their preparations for that day include adopting fixed fees for both initial and ongoing work. They are also ushering in a new generation of staff, led by 21-year-old office manager Lucy Byrom.

It is a far cry from the generalist IFA firm, initially called The Financial Practice, Jones started in 1995. After building a business with seven self-employed advisers, he realised the model was not working because his advisers wanted all the benefits of being employed and self-employed.

Fees taken from financial products will be banned in the next 10 years, and those who remain wedded to percentages will get left behind or wiped out. At least these are the predictions of Casey Mills and Ian Jones, directors of TFP Financial Planning.

Their preparations for that day include adopting fixed fees for both initial and ongoing work. They are also ushering in a new generation of staff, led by 21-year-old office manager Lucy Byrom.

It is a far cry from the generalist IFA firm, initially called The Financial Practice, Jones started in 1995. After building a business with seven self-employed advisers, he realised the model was not working because his advisers wanted all the benefits of being employed and self-employed.

Starting over

In a radical move, in 2007 Jones parted company with these advisers and went back to working on his own. Five years later, he looked to expand again and recruited Mills with a new vision for the firm that put less focus on advisers.

Around that time, they bought the client banks of three other IFAs who wanted to de-authorise from full advice ahead of the retail distribution review (RDR). Once fully migrated, the acquisitions more than doubled TFP’s existing £45 million under advice.

Jones and Mills then hired Byrom as a 16-year-old apprentice five years ago and quickly recognised her talents. As office manager she is now spearheading the growth of a young support team.

Alongside that, Byrom is heading a two-year project with Michelle Hoskins at Standards International to achieve the business accreditation BS 8577, the standard for internal financial planning processes. Byrom says the firm aims to build a structure of repeatable processes such that it does not rely on any individual and everyone is replaceable. Not satisfied with that, she is also studying for her own business management certificate.

Byrom says a feature of progressive financial life planning firms is the focus on the planners themselves is reduced. ‘Previously, the main person was the adviser, support staff were just in the background,’ she says. ‘In the future, the support team will be much more prominent and clients will want to see us as much as the adviser. Our team already attend many client meetings and have a much larger contribution.’

Starting a conversation

TFP first started moving towards life planning three years ago when it adopted cashflow modelling package Voyant.

‘We realised many of the better advisers in the profession were using life planning,’ says Jones. ‘When you start working with it closely, you see the conversation and the relationship with the client shift.

‘For example, you don’t talk about the portfolio as much, but rather their deeper goals and values.’

Life planners typically espouse the virtues of listening. And TFP financial planner Dan Haylett is studying neurolinguistic programming ‘to help us develop that listening process’.

‘We also spent two years looking at the entire client journey and making sure Voyant wasn’t the only focal point. The journey now works because it threads in our processes using [back-office system] Intelligent Office and the support team.’

Room to grow

Mills and Jones own TFP jointly and pay themselves a small salary plus undisclosed dividends. All other staff are employed on a salary plus bonus basis. The firm has run profit margins around 50% for several years, helped (until the current move to fixed fees) by an average client investment of over £750,000.

It also has a strong recurring income per active client of £4,600.

‘We target between 10% and 15% growth over the next three years, which will link to Lucy’s development and the fact that we recently hired our third planner Dan,’ says Mills.

However, TFP only works with 142 families, leaving it plenty of capacity. ‘We speak to advisers that are doing eight to 12 client meetings a week or more,’ says Jones. ‘The way we work with lifestyle planning [which involves long, in-depth meetings], we couldn’t do that.

‘But we do plan to grow clients. We have never done any marketing until this year when we rebranded and started working with Phil Bray of The Yardstick Agency as we liked his hands-on approach.

‘We shot some client videos to underline the reasons why people value our services. Now we want to start opening more relationships, for example, with local businesses.

‘Dan will start by conducting research interviews. He will explain we are developing a new financial planning service and ask for their input; find out about their business and challenges; and then once it’s developed, talk to them more if they are interested.’

Mills and Jones say they want to ‘live the life they promote’ to clients, so try to work a four-day week.

‘We’re happy to delegate responsibilities and decisions now,’ says Jones. ‘It’s been amazing to see Lucy transition to where she is now.

‘We need to get more younger people in – the whole industry needs to do more. But in general, the future looks bright.’

The fee bit...

TFP is transitioning from percentage fees to fixed initial and ongoing fees depending on the complexity of the case.

Previously it charged between 1% and 3% initial; plus 1% ongoing. However, initial is now between £3,500 and £10,000. Ongoing is also between £3,500 and £10,000 per year, broken down into monthly payments. Most clients pay around £5,000.

For a client with £100,000, this would equate to a 5% ongoing charge. Clearly the service is not aimed at this bracket. But for a typical TFP client with £775,000, it equates to 0.65%.

‘For the ongoing fee, clients get at least one annual face-to-face meeting but most long-standing clients get two,’ says Mills. ‘They also get unlimited access to us and the team, quarterly investment reviews and access to the Intelligent Office portal.’

However, the value is in achieving outcomes, such as giving people peace of mind and confidence to retire, spend, and give; with a plan and support team to guide them through the challenges, he says.

‘We’re trying to communicate that our relationship is with the client not with their money,’ adds Jones. ‘The fixed price removes any incentive to implement or gather assets and means if they want to walk away after the planning work, they can.’

Communicating the change has been a ‘challenge’ he says as clients ‘compare it to what other local planners do’. ‘But clients who have been through the process say it is great value.’

If clients accept flat fees, why do more advisers not use them instead of a percentage of assets charge?

‘Why would advisers [move away from percentages] when no one is forcing them to?’ says Jones. ‘Surely it can’t be like this in 10 years. It must change, and we need to prepare for it.’

Where advisers do charge fixed fees, it is usually for the initial work only and they will still take a percentage for ongoing advice.

Byrom says they have not yet experienced any resistance to ongoing fixed fees though it is early in the transition. She advises any planners thinking of transitioning to fixed ongoing fees to thoroughly review the service they want to provide, and the potential costs involved.

‘Ensure this is communicated clearly throughout your business, emphasising why [you are doing it],’ adds Byrom. ‘Don’t dilute the service with any transactional work. And continually review and feed back internally on how you can improve the communication of your service and the fixed-fee payment method.’

She also recommends introducing fixed fees with new clients only to start with. This will provide an opportunity to work out any glitches before rolling out to existing clients.

 

TFP moves to index fund portfolios after decade of mixing and matching in client portfolios

Since 2009, TFP has been using blended active and passive funds in in-house model portfolios. However, it is currently transitioning to a new proposition based on index funds.

Three years ago, the firm started using Abraham Okusanya of FinalytiQ and his analysis team to enhance the investment decision-making process. TFP’s investment committee meets quarterly and comprises Mills, Jones, Haylett and the FinalytiQ team.

‘We wanted to simplify ongoing management of investments,’ says Jones. ‘Mostly, how you manage the money is not important to the client. Initially it might be, but not when you get beneath the surface.

‘For example, many of them don’t know how to spend their money and they need someone to tell them that they can, and that they should do it sooner. That has nothing to do with investment management.’

Mills adds: ‘Some asset allocation models that drive many centralised investment propositions don’t make much sense. For example, one recommends holding 30% to 50% in cash. That looks like a tactical approach which makes no sense for a long-term investor.

‘I don’t see how you can justify that to the client, especially as they hold a lot in their own cash already.

‘What we want is global diversification, as low-cost as possible, daily rebalanced, multi-asset portfolios that are easy to explain. We spent two years investigating the index investment market and Vanguard LifeStrategy came to the top in all those areas, so that is now our core proposition. We also use funds from Premier, Legal & General, Prudential and Royal London.

‘There can be ego in running your own portfolios. But you can’t build anything better than what Vanguard have already. Why reinvent the wheel when they have the money and technology to do it more efficiently?’

Ian Jones

1995-present: TFP Financial Planning (previously The Financial Practice), director/financial planner

Professional Memberships/Qualifications

Diploma for Financial Advisers
Financial Services Regulation & Ethics
Advanced Financial Advice
Certificate in Financial Planning

 

 

Casey Mills

2012-present: TFP Financial Planning, director/chartered financial planner
2008-2012: Skandia, business consultant
2000-2008: Friends Provident, IFA consultant

Professional Memberships/Qualifications

Fellowship Advanced Diploma in Financial Planning 

Chartered Financial Planner 
Certificate in Equity Release 
Award in Long Term Care Insurance

Lucy Byrom

2017-present: TFP Financial Planning, office manager
2014- 2017: TFP Financial Planning, client service administrator

Professional Memberships/Qualifications

Level 3 Award in Financial Administration – Pensions

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