Seven years ago Warren Shute slashed the number of employees at his advisory firm by 80 per cent. Today, he has never been happier.
Speaking to FTAdviser, Mr Shute explained that by shrinking the size of his company he was able to focus on what he enjoys most: providing comprehensive financial plans for clients.
Mr Shute founded Wiltshire-based Lexington Wealth Management in 2000 and went directly authorised in 2006. Around that same time he shed four-fifths of his staff.
“At one point we were about 25 or 30 in staff and I spent a lot of time training and looking after people and it wasn’t something I enjoyed. I really love helping people plan for the rest of their life.
“We took an assessment of the business. I did a financial plan on myself. What do I enjoy doing and what’s profitable? Managing people was very time-intensive but not very financially lucrative or enjoyable.”
Today, Lexington comprises Mr Shute, a paraplanner, a personal assistant and a marketing officer. Mr Shute’s wife does his Gabriel returns. The firm manages around 85 clients.
“Up until a week or so ago I had a financial planner, a mortgage adviser and a paraplanner. And then the financial planner recently moved down to Devon to be near his family so I’m holding the fort, but it’s hard to find good financial planners and not product pushers.
“There is a people skill and a coaching skill that isn’t taught in textbooks. We will probably take on a well-qualified inexperienced new entrant and coach them. Possibly someone who has trained as a paraplanner. There are over well qualified people who have very little practical experience working with clients.”
Working out of what Mr Shute refers to as “a shed next to my house”, he typically sees four clients a week, with no more than one meeting a day. While some advisers bemoan having too much to do in too little time, the way Mr Shute describes his schedule makes it sound downright easygoing.
“[We have] about a three hour meeting, and have a spot of lunch, and the rest of the day is spent writing up the minutes. The client comes in and the business is wrapped up in one day.”
So how does Mr Shute make this work? A meeting in the morning, paperwork in the afternoon, four days a week? That isn’t to say the fifth day is spent playing golf, but it is refreshing to hear about a thriving - and managable - business while other advisers claim to be overstretched due to the burden of regulation.
“We look at value to the firm and look at generating £2,500 to the firm, and we like that to be recurring. Clients are typically 55-plus, earning £100,000 to £200,000 per year and a net worth of a couple million pounds. They aren’t super rich people.