Chris Jones: Green green grass of home

My father is a farmer, or he was until a cow kicked him and broke his hip aged 85. Having recovered at 87, he is deciding whether to go back to the farm or retire. Yet I suppose his identity will always be as a farmer.

With farming or mining and other physical jobs, retirement is necessary when you can no longer physically do it. That isn’t the same if you are a financial planner or a proposition director, where all you actually have to do is talk to people, look at a screen and play with your computer. It’s unlikely that our clients will kick us and break our hips.

Of course, technology helps in all sectors. My dad relied upon his 500cc quad bike, known locally as a Welsh mobility scooter, and you should check out robotic milking machines – just don’t get too close. Nonetheless, there remains quite a difference between the need to retire between us and manual workers. 

At the moment, the emails and phone calls keep coming in and the diary is full of meetings. Sometimes you might wish that you had a minute to yourself or that people would leave you alone. However, if you’ve ever changed job or firm, it suddenly stops for a while. You begin to miss the attention and people needing you. You don’t feel as important and you think about what is going on that you are no longer involved in. Then it all gets going again and those feelings are quickly forgotten.

The sound of silence

When you retire, that silence is something you should be seeking or at least be ready for. On our days off and in our spare time we do find ourselves looking at screens, playing with the computer and talking to people. When we retire, we will probably spend a lot of time playing with a computer looking at screens and maybe wishing we had someone to talk to.

So, why do financial planners retire? It could be, in the words of Don Corleone (Marlon Brando), you are made an offer you can’t refuse. It could be that you genuinely have something better to do. Or often I hear that advisers have just had enough of the compliance.

The advisers I know are in fact compliant and want to comply with the regulations; what they really want to escape from is the bureaucracy. The etymology of the word bureaucracy comes from ‘desk rule’, but there is no longer any reason to be ruled by a desk: desks have been replaced by technology. Now advice is principle-based, client-focused and delivered through technology. You and your firm can escape bureaucracy, stay advising and stay compliant.

If it’s any consolation we aren’t the only regulated industry and probably not the most bureaucratic. My father still has to fill out countless online returns, and help Defra monitor what is happening on his land with satellites. There are rumoured to be four Defra employees for each farmer.

I don’t know what I would do if I retired, suggestions welcome, but I wouldn’t be buying the proverbial farm. I know many Dynamic Planner users who are already spending the summer in Ibiza, spending time on their yachts, on the golf course, with their families or driving their Ferraris. I know some who are taking long adventure holidays, volunteering, or being on committees or trusts. Because they already have the time.

Money Honey

Retirement planning has always been less about having the money, and much more about having the choice. Money just gives you choice. 

Once you are willing and have the means to retire and or sell your business, you also have the choice to give up some clients and turn away opportunities. You could say no to the insistent DB transfer client, the one who has a new stupid investment idea every time you see them, the one whose partner doesn’t trust you, the one that picks holes in everything. You could just see the clients you like and give the advice that you are comfortable with.

On the other hand, there are plenty of people who will currently make you an offer you can’t refuse. If you have worked hard for years building your business, why shouldn’t you be paid for it?

To some extent, it’s a bit like a DB transfer: the size of the capital payment is so appealing you discard the problem of how you turn it back into the income that you need but have sold.

However, this could be the right thing to do, and many consolidators are Dynamic Planner users.

Practically in such a transaction there are three concerns. You don’t want clients you know well, but no longer look after, calling you up unhappy about the new service. The new firm doesn’t want you starting up again and taking the client with you. And neither of you want the client to go elsewhere because they don’t like the change. 

It is worth remembering that while my dad can own cows and sheep, you cannot own clients. They have total freedom as to who they use for their financial planning and who they pay. You cannot demand their custom. You have to earn it and they have to want it.

The same, efficient, suitable and valued review and financial planning process that can enable you to keep working, also helps you when you come to pass on your clients. If the client understands and values your service, and you deliver it in an efficient, consistent and repeatable way, then you, your staff or whomever takes over your business can continue to keep the client happy with minimum disruption.

Organising your firm using efficient technology, therefore, gives you the option to make it as attractive as possible for potential acquirers, or to carry on farming your business for longer.  

Chris Jones is proposition director at Dynamic Planner