Case study: From Amazon to advice

Adviser name: Rory Albon

Firm name: Lyndhurst Financial Management

Firm size: 10

The problem: My clients were a young couple just starting out in their life. They had questions about their finances, pension savings and mortgage payments, and had very little exposure to financial advice, as well as very little in the way of liquid assets. 

Albon says: "I never wanted to be a sales person or to have to hit targets - this was a concern that I had, coming into the industry from Amazon.

I had been at Amazon for 10 years - it is people-oriented and solutions-based and it is about fitting the puzzle piece into the gap.

In that respect, advice is similar in terms of problem solving, but the people - the client - has to be paramount.

I knew almost immediately that I wanted to be independent rather than restricted - stepping away from the sales element and to be able to pick whatever puzzle piece fits that client perfectly.

Tell me about this particular couple

They were different to the normal clients that advisers have in that they had no assets to speak of. These were a young family in their early 30s. Not too dissimilar to me, in fact.

Back in the days of lower interest rates, they had taken out a hefty mortgage on their property.

The advice profession in the past may have done naff all for smaller clients or younger clients.

The husband had just started a new job on a good salary, while the wife - a part-time teacher - earned a lot less.

They initially wanted to see if they could reduce their mortgage now that interest rates were rising, but not wanting to hurt their long-term retirement plans. 

It was an interesting conversation to have. 

What were the challenges? 

The biggest red flag was that he had no income protection if he was unable to work.

So I had to do that. That's a hard conversation - they came to me in the hope of saving money and the first thing I did was tell them to spend more. 

But, using cashflow forecasting and scenario plans I could show the client not just their long-term savings and mortgage reductions, but also what might happen if he could no longer work. 

I could show them how quickly they could drift into the red. 

Try to speak with financial advisers. They are generally happy to talk with you.

The second step was going through his workplace benefits. He had a generous employer who was making a good payment into the pension, unrelated to what my client was putting in. 

Also, as he worked in sales, he was getting good commission payouts, so this gave us an opportunity to use the commission bonus as surplus income to save for the mortgage, and to make overpayments into the pension to save tax.

Overall, it was a big educational piece to help them understand their options. 

Cash management

The couple needed some short-term access to cash. We knew they had a fix (of 1.8 per cent) coming up for renewal in two years' time, and Lyndhurst has a cash management service. 

We put him into a fixed interest account for 6 per cent. Depending on what happens to interest rates by the time his fix is up, we hope the 6 per cent will at least soften the blow.

We also helped them set up some Junior Isas for their children, and checked the wife's national insurance contributions to make sure these were up to date with her going on maternity leave.

We're monitoring all their savings and plans. 

Future of advice

I feel the advice profession in the past may have done naff all for smaller clients or younger clients, as their savings and assets are so low.

If you look at the traditional model for most IFAs, helping clients overpay the mortgage isn't great for the adviser, right? I mean, there's no money in that. But it is the right thing for the client.

We found the right protection and cash management products for them to help them on the start of their journey.

For me, this is an ongoing relationship - I expect to be working with that client for decades to come and I hope we are at the start of a long-term relationship.

If they succeed, I succeed. In a way, I am treating them in the way that I would have wanted to be treated. 

They have given me VouchedFor and Google reviews which is really useful, and they have been a keen cheerleader in that way. 

I once heard an adviser say he doesn't have 100 clients; he has 100 friends. Is that how you feel?

Would I go to the pub with my clients? Maybe not - it's a professional relationship at the moment, but do I see it going that way? Yes, maybe in the future.

Sometimes, advisers know more about clients than GPs, so it is definitely the case that the longer you spend working with them, the more you get to know them and their goals become your goals.

What would be your top tip for someone starting out on their journey to become an adviser?

If I were to go it alone I would like to think I could take on these clients and to serve younger clients. I would not like to focus just on the 50+ or those approaching retirement.

So if you get approached by clients with low AUM, it helps to think outside the box as to how to help them meet their short-term as well as their long term needs.

Also, I would say 'swot up' about the profession.

You can do it the same way that I did - by listening to podcasts and asking around. You know you will have to do the RO exams from one to six, so read up on them, and see what is required.

The third thing is to try to speak with financial advisers. They are generally happy to talk with you about the soft skills that are required, and what they do day in, day out.

You never know, they might have an entry level or paraplanner role available, and you have your name in their ear.