The financial services industry is always bickering about something or another, according to Anthony Villis, managing director at First Wealth.
Speaking to FTAdviser as part of our Coffee Corner series, Villis said there were quite a few areas the industry could improve on such as diversity and inclusion.
What is the key thing the industry needs to change?
“We need to stop squabbling amongst ourselves,” he said.
“I just get bored of tied or independent fixed fees against ad valorem or evidence-based against active management.
“There are really good advisers operating in all those different models and they are also really bad advisers operating in all those models so rather than this sort of entrenched 'my way is the best way', I wish sometimes people thought there were bigger problems to solve here such as diversity and inclusion and climate change.”
Villis said the industry would be in a better place if people put their energy towards that rather than “squabbling over something that has been done to death”.
Well, where do you think we are at as an industry with diversity and inclusion?
“Pretty terrible,” he said. “Everyone knows that financial services has a sort of white middle aged man problem.
“Is it getting any better? I think it is gradually getting better, but very, very slowly. We haven't got enough females in financial services.”
Villis explained there are also not enough people from ethnic backgrounds in financial services.
At First Wealth, he said the firm board is 50 per cent male and female, and is the same in the senior leadership team.
“With advisers, we've got six male advisers to three females which is still not good enough, but it's getting better than where it was,” he said.
“The challenge we all have is it's about bringing these people into the profession to start with because it's difficult when you're hiring people and often there is a need for hiring and there aren't the number of people there to choose from.”
Anthony, how did you enter into the financial advice space to begin with?
Villis said he studied economics at the University of Bath and tried to get a job there because all his friends were there.
“I wrote to a few companies and didn't hear much from many and then had two interviews - one with an accountancy firm one and one with Chase De Vere.
“Chase offered me a job - subject to sitting some exams - so that was the start when I was 21.”
He explained that upon starting out, he didn't really have a clue what he was doing.
“I didn't have any real inclination what financial advice was to start with, but it was just a great group of people,” he said.
“I enjoyed the work hard, play hard ethic. There were some really good times there.”
Since starting out, what has been the biggest change you’ve witnessed?
“Well, personally speaking, in terms of the way ours is very much more focused around clients' lives and the whole movement away from transaction business,” he said.
“When we started, it's always the question of how much you've got to invest. It was always an investment question rather than a financial planning question and that's probably just where the profession was at the time or the industry at the time.”
Now, he explained that so much of the advice he gives is centred around business, people's personal lives, family and intergenerational planning.
“It’s almost more of a sounding board coaching type of environment rather than someone who is selling something.
“It's more enjoyable because you end up finding out much more about the client's life, who they are, what makes them tick, what makes them worry so I think it's a much more enjoyable value add from where we were.
“It’s changed a lot and it's changing in a really good way.”
He explained that for those starting out today, the key thing is building trust and building your reputation.
“When you start you have no reputation hopefully, good or bad. But as you get clients, they will refer if you do good work, so it’s the compounding of good work and it's the same with professional introductions as well that you build a reputation hopefully as someone who does good work with clients and clients get good outcomes.
“Anyone starting a new business now that's the hard thing to do, because you are starting with a blank piece of paper.”
Villis said the issue now is that the world has changed a lot.
The last 15 years had low interest rates, cheap money but the world has changed, he explained.
“We have inflation, we have interest rates that are higher so there's a much more sensible conversation around people wanting to pay off their mortgage rather than invest.
“People wanting to keep cash reserves rather than invest potentially low risk, which again, hasn't been a conversation for the last 15 years. I don't see that reverting back anytime soon. I don't think it will revert back at all.”
He said it was important for new business owners to be comfortable with new clients and be able to give solid advice.
“Often, maybe in an environment where you're not getting paid for that advice, which is pay down debt, keep cash reserves, how do you square that as a way as someone who's got a business to run so make sure you've got a fee model that can handle that,” he said.
For those just joining, what clients are available now?
Villis explained the interesting thing people may get wrong is when they talk about the next generation of wealth.
“This concept of someone getting to 70 and passing all their assets to somebody who's 35,” he said. “It's actually completely nonsense because most people don't pass their assets at 75.
“Life expectancy is 85 so people are chasing clients who are 35 but if you're an 85 year old client, your next generation can begin to be more like 50 so they are hopefully they're already your clients.
“It's not that intergenerational transfer isn’t happening, but people just misunderstand where that wealth is going to this idea that we're gonna get loads of 20-year-olds running around with all of the money in the next five years.”
He argued that that's necessarily right and although it will happen - those 20-year-olds will then be 40-year-olds so there is “a misunderstood calculation”.
If you own your own advice firm and would like to get involved with the Coffee Corner interview series, contact deputy news editor Sonia Rach via email at sonia.rach@ft.com
