Breakfast club: Why financial planners must speak with one voice

With large consolidators and national firms flexing their muscles, and banks upping their advice offerings, Matthew Parden says IFAs need to get better at showing their value

Matthew Parden, chief executive, Aspinalls

With large consolidators and national firms flexing their muscles, and banks upping their advice offerings, how are IFAs showing their value? It is a question Aspinalls chief executive Matthew Parden is keen to dig into when I meet him at London’s Ivy City Garden for breakfast near his offices in Bank.

‘There is an increase in private banks that are putting financial planning at the core of their proposition, quite rightly. It’s where the value is added,’ says Parden, referencing the multi-billion pound Schroders and Lloyds tie-up last October.

‘I just hope they are actually here to deliver good advice, not just to make money. I question to what extent these bigger firms can deliver true holistic financial planning. The challenge for smaller firms now is how we demonstrate and promote the value we are delivering.’

Matthew Parden, chief executive, Aspinalls

With large consolidators and national firms flexing their muscles, and banks upping their advice offerings, how are IFAs showing their value? It is a question Aspinalls chief executive Matthew Parden is keen to dig into when I meet him at London’s Ivy City Garden for breakfast near his offices in Bank.

‘There is an increase in private banks that are putting financial planning at the core of their proposition, quite rightly. It’s where the value is added,’ says Parden, referencing the multi-billion pound Schroders and Lloyds tie-up last October.

‘I just hope they are actually here to deliver good advice, not just to make money. I question to what extent these bigger firms can deliver true holistic financial planning. The challenge for smaller firms now is how we demonstrate and promote the value we are delivering.’

Client targets

Aspinalls calls itself a holistic financial planning firm. Parden says this means staff work with clients to discover their goals and life plan first, before delving into the investment process.

‘There is an opportunity for firms like us to show the quality we offer,’ he says. ‘The professional bodies are working hard, but it would be good for us to speak with one voice.

‘The regulator added a “find a financial adviser” button to its website but the regulator’s website isn’t a potential client’s first port of call. The profession needs to be known sooner.’

Ethical choices

Like many firms that emphasise life planning, Aspinalls uses an in-house passive investment approach, occasionally working with discretionary fund managers, including Quilter and Seven Investment Management.

But it is also in the process of building in-house ethical portfolios in response to growing demand. The first stage is to determine a clear definition of what constitutes a sustainable investment.

A further hurdle, Parden says, is it is impossible to offer an entirely passive ethical portfolio.

‘There has to be compromise somewhere,’ he says. ‘If we want a completely passive portfolio, 30% of the portfolio won’t meet our ethical criteria and vice versa.’

Gap in the market?

The terms ‘active’ and ‘passive’ may not be as clearly defined in the ethical space either. For example, if passive funds tracking the FTSE 350 use negative screening to filter out unethical companies, are they still passive?

Parden believes there is a gap in the market for passive ethical funds, particularly in the corporate bond sector. ‘What makes a government bond ethical?’ he asks. ‘Is the US classed as ethical?’

The firm does use some active investment where it benefits the client. ‘We take these two options to the clients and help them to choose which is more important: sticking with the portfolio or going completely ethical. Believe it or not, performance is pretty much the same for both. It comes down to client preference.’

Breakfast Breakdown

Tea or coffee?

Coffee (cappuccino)

Morning moan

The slow shuffle through Bank Underground Station.

Best breakfast

A Traditional Goan breakfast, eaten by the beach.

Best business decision

Not placing a substantial sum of money with an Icelandic Bank paying a premium interest rate.

Top tip

Be genuine and open, and therefore consistent.

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