‘Challenge is money conversation’: Yellowtail’s RDR plans
RDR will not herald a massive change for Yellowtail because it has been planning for almost a decade, says MD.
While some companies look to expand their business offering to include a non-advised option and others brace themselves to take a hit to profits rather than cut loose lower-value clients, Dennis Hall’s Yellowtail Financial Planning is simply focusing on a narrower, higher-value client type.
According to Mr Hall the post-Retail Distribution Review IFA will not be able to handle lower value clients and should instead seek a niche client demographic to distinguish themselves from their competitors.
In an interview with FTAdviser as part of an ongoing series on advisers’ RDR preparedness, Mr Hall says: “Some people cater for dentists or entrepreneurs but we cater for people who are 50-plus.
“Half our clients are widows or single women and half are married couples. It effects the approach we take. It’s financial planning-led and not everybody wants that.”
They didn’t necessarily want to have a fees conversation - in the eyes of a client commission wasn’t such a bad thing it was just presented in a bad way
He explains that when he says Yellowtail’s service is “financial planning-led” he means that they take a more holistic approach to client needs. If a client walks in the door demanding a pension they sit them down to talk about their long-term goals and evaluate if a pension is actually what the client needs to meet those goals.
“We aren’t going to be instructed by you to buy a pension. If it is then what sort of pension and what will it do for you?”
Qualifications and fees
The company consists of three advisers in total, two of which are chartered. The company places high importance on not only meeting RDR standards but becoming qualified beyond what is required.
“We were RDR ready from day one. When we started the business six years ago we were RDR ready.
“It was being talked about but we didn’t know the detail at that point. We knew fees were coming in one form or another and that there would be a new minimum for qualification. Those were the two big areas people were talking about.”
According to Mr Hall there is a not-so-vocal group of advisers who are quietly excelling in their qualifications and preparing for the new world of non-commission remunerated advice. For them, the challenge lies in perfecting that awkward money conversation with clients.
“I think for the kind of adviser that I talk to qualifications aren’t the issue. The issue is packaging what it is you do and presenting it in such a way that people see the value in paying fees. That takes a lot of trial and error.
“We weren’t charging the right level of fees on day one. We had disjointed conversations about how we were charging and what we were charging for. Clients seemed not to like hourly rates. We started out getting people to write cheques and they didn’t like that and they didn’t like direct debit either.