CompaniesMay 24 2013

Culling the adviser herd: No routes for new blood

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ByMichael Trudeau

When Trevor Phelps founded his company he had a clever plan: Get to the front of the phonebook and let the business flow in. Thus, his company, A Finance was born.

However things didn’t quite work out for Trevor in the way he expected. Sure, he recieved a lot of phone calls, but not from the kind of people he was hoping for.

“When I became independent and started on my own I thought advisertising would be the main thing. I called myself A Finance and bought a website. I bought it and put my name in the Yellow Pages and have never advertised since.

“We got the wrong sort of people. They were trawling. Unfortunately that isn’t what our industry is really about. It was a good idea at the time.”

Maturing along with clients

Mr Phelps is a generalist but since the advent of the Retail Distribution Review (RDR) his business has changed over to mainly investments and the occasional vesting of pensions.

“When I started you wanted to do most things for most people but as the clients I have got matured along with me, I find I am mainly managing investments for people.

“It is like having a plumber. I have had them for a long time. When there is water coming through the ceiling they don’t go to the Yellow Pages.

“Before I changed to an RDR way of working in 2010 I looked after around 150 clients. Now I have got about 40 clients that I deal with on a regular one to one basis. Any initial charge for new money is 1 per cent and the ongoing adviser fee is 1 per cent.

Culling the herd

As reported earlier, Mr Phelps’ income has actually grown despite having to trim his client bank.

“If anything it has increased my level of income because before I was working on an arrangement where half a per cent trail was in place.

“Now, in some cases where I don’t see the client at all, I am writing to the company and saying can you take them off my agency. Whereas before I would try and go back to see them now I need to go and see them once a year.”

Demonstrating added value is a challenge for Mr Phelps, not he insists because of any lack of ability on his part but due to a lack of education in his clients.

“You can do things they don’t see as any value and you can do smaller things they see as great value. For example, giving a suitability report to a client. Often they do