'The real competition for future advisers is Amazon'

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'The real competition for future advisers is Amazon'
Tim Mottram is director of Grey Parrot Financial Planning (Carmen Reichman/FT)

The next generation of financial advisers will need to be able to combine technology and technical expertise with "extremely well developed personal skills", says financial planner Tim Mottram.

The director of Grey Parrot Financial Planning, a recently launched advice business with an innovative way of training new recruits, says people miss the point when it comes to perceived threats to the industry, such as those posed by robo-advice.

If anything, he says, technology is here to help guard advisers from the real threat, which comes from tech giants the likes of Amazon.

Amazon has already entered wealth management services in India, though it is not offering such services in the UK currently. The online retailer has millions of customers that it knows very well and it is able to offer a near-instant service, which is where Mottram sees its appeal.

"Our competition is next day outcomes," says Mottram. "There's a lot of talk about AI, there's a lot of talk about robo-advice. And frankly, we think people miss the point when it comes to robo.

"The journey from first contact with a prospective client to onboarding them has got longer and longer. AI may well be a way of shortening that journey, and I think the adviser of the future, the younger people, are very well positioned to use robo-advice, to use technology, to shorten that journey.

"Because the reality is that our competition isn't the IFA down the road. Our competition is Amazon."

Grey Parrot Financial Planning was formed in late 2021 by Mottram and a small group of industry veterans who decided they wanted to do "something different". 

'I always used to think gosh, if only I could see somebody interact with their client and see what they did,' says Mottram (Carmen Reichman/FT)

Mottram had spent more than 20 years at a large national beforehand but started to see a different way of doing business.

"Ultimately, what we wanted to be was outcomes based and therefore do financial planning for people," he says. "We have a strong view on our investment proposition, we are evidence based and we've always believed for a long time that it shouldn't cost twice as much in fees to look after twice as much money. So we are fixed fee."

Grey Parrot has since taken on two trainees in a structured traineeship it calls 'academy'.

Mottram says the industry is facing two profound shakeups: the impending retirement of a large number of advisers, plus the rapid development of technology.

But he notes humans will always gravitate towards other humans when it comes to making decisions that matter.

So, while he says young people's first instinct "will always be 'how do we solve this using tech?'", they will still need to bring the qualities the previous generation of advisers had, including "extremely well developed personal skills".

Old world skills are going to be extremely important.

Grey Parrot's academy puts recruits through a six-month training schedule alongside their industry exams, blending practical on-the-job learning with classroom-based theory. This way they learn how to apply what they study in their professional exams to real-world contexts.

"The direction of travel from the regulator being technical expertise I think is an absolute. But secondly, the old world skills, being excellent at listening, being excellent at asking questions, understanding what people mean, the relationship between goal setting and behaviour around money, the psychology of money, are going to be extremely important," he says.

The course is structured using a mixture of role plays, open discussions, reflective writing and observations.

It also provides training on presentation skills, networking and marketing strategies, and teaches them how to approach and cultivate relationships with introducers.

Trainees are also trained in using cash flow software before they start building their client portfolios. But it is not all about the adviser role, they learn about back-office processes and paraplanning too.

"Teaching our trainees how different roles work will make them effective delegators in the future," says Mottram. "When they hand a case to a paraplanner or administrator, they will know what result to expect as they could competently do the work themselves."

Finally, they are put through an assessment day before they can graduate. This involves actors who play clients, and trainees must demonstrate the skills and competencies they have learned to pass.  

Valuing your people, training your people, remuneration matters, but also a strategy for the long term.

Following graduation, trainees remain self-employed with the firm and start working with clients under supervision.

"From my own perspective, I never got to shadow anybody. And the best that you could do, when I was in my 20s, was just sort of hope for some crumbs of knowledge and wisdom from more experienced practitioners," says Mottram.

"But I always used to think gosh, if only I could see somebody interact with their client and see what they did."

So far the academy has taken on two trainees, but if supply and demand warrants it, Grey Parrot will be ready to take on more.

Mottram has never considered the threat of his trainees leaving after their training is over, though he recognises the possibility.

"There are enough reasons to stay. So, you know, we've got a vision for our business, we've got a business model, and ultimately, some degree of equity participation is the thing that will keep people motivated to stay," he says.

"Valuing your people, training your people, remuneration matters, but also a strategy for the long term. It's not a failsafe approach, but it's likely to be one that will yield some fruit in the long term."

Taking on trainees is an opportunity for any adviser, as long as it fits the business model and longevity of the business, says Mottram. 

"It's all outcomes based. What is it that this person wants? They want to be well trained, they want to be valued, they want to be well remunerated, and they want a long term strategy.

"That gives them the standard of living that they seek. And if you reverse engineer it, it's not splitting the atom to put those things in place."

Besides, "if you have a long-term vision for your company you have to do it," he says.

carmen.reichman@ft.com