Hayley North is growing business while staying true to Rose & North’s approachable image.
Hayley North, managing director of London-based Rose & North, is turning clients’ bitter experiences of financial services into sweet success. The Cambridge University graduate, French-speaking cupcake enthusiast is repairing the reputation of advice with some clients who have had their fingers burned by old model practices in the past.
‘I wanted to run my own business and I kept hearing from friends about terrible experiences with financial advisers,’ says North. ‘I was convinced there was a better way to do it.’
Having initially set up on her own, North briefly merged with another business before spinning off to go it alone once more. The current business has maintained her original vision, though.
By presenting a less formal, more approachable image, she says the firm attracts people who have felt alienated, either by the male-dominated profession or by a previous sales-driven approach.
‘One woman told me her former adviser was so pushy she felt as if he was trying to grab her as she tried to climb out of the window,’ she says. ‘There is a bit of therapy involved sometimes.’
This approach works particularly well with internet marketing, says North, which is how the firm acquires a large percentage of its clients.
The personal touch
One important source of growth for the firm has been Unbiased.co.uk.
‘That has been huge for us. We had eight or nine leads from there last week and may convert four or five,’ says North.
She says there are a number of likely reasons for this success. ‘Maybe there aren’t many advisers on the site in this area, it might be my qualifications [chartered and fellow of the Personal Finance Society] or the fact that I am a woman,’ says North. ‘Also our style: if someone wants gold-embossed cards, there are other firms that do that. It is not our approach.’
North says advice is a ‘very personal’ business, which can often be at odds with the corporate image some firms try to project.
‘Many advisers take their personality out of their business and it becomes very serious. But people look for someone who can understand them, and I try to bring as much of myself into the business as I can. Some will hate that, some will love it, but we are true to ourselves.’
From solo to merger and back again
North set up IFA firm North Financial in 2008, having previously worked in equity sales and as a hedge fund adviser.
Initially the firm was authorised under the network Burns Anderson and soon North was introduced to Wellers Wealth Management (owned by Wellers Accountants and part of Sage network), which invited her to join.
‘I merged my existing business into the firm, became managing director, took over the team and helped run and grow it, while also keeping the North Financial brand,’ says North.
It was a fated move, however. Two years later, Honister, which owned Sage, went into administration. The experience prompted Wellers Accountants to close its financial services arm, so North went solo again. She set up Rose & North as a limited company as part of the Financial Limited network and arranged to continue servicing all the ongoing clients from North Financial and Wellers.
‘The Honister collapse was a shock but it was OK for me because I was employed,’ says North. ‘But it was stressful in that it put me out of action from April to July 2012, and I had to focus on getting reauthorised and moving clients across as quickly as possible. I worked 15-hour days for some time to achieve that.’
Another shock came when North found that a discretionary fund manager (DFM) had been trying to poach her clients during this time. ‘It isn’t fair play when an adviser has given you a client,’ she says. ‘It made me a lot more cautious about building relationships with DFMs.’
Despite the disruption, North says many positives came out of the Wellers experience.
‘I got exposure to different clients, managed a different team of people, and I saw a different business model and how to bring in more structure,’ she says. ‘I also learned a lot about how accountants work with advisers, which was hugely valuable.’
HAYLEY NORTH CV
2012-present Rose & North, managing director
2010-2012 Wellers Wealth Management (WWM), managing director
2008-2012 North Financial (part of WWM from 2010), managing director
2007-2008 Alvine Capital Management, alternative investments adviser
2005-2007 Bank of America, US equity sales (London/New York)
2000-2005 Barclays Bank, relationship director (large corporates)
1999-2000 Capital One, project manager (London/Paris)
1998-1999 Andersen, trainee auditor
Fellow of Personal Finance Society
Member of Institute of Financial Planning
Chartered financial planner
Diploma in Marketing (Chartered Institute of Marketing)
Certs CII (MP & ER)
Cupcakes and roses
Rose & North operates in an office adjacent to North’s home in Hampstead, North London. Outside work, she enjoys socialising, particularly in the many cafés in the area. Primrose Bakers is a particular favourite of hers for its cakes. ‘Cupcakes get us through the week,’ says North.
The name of the company is also derived from her locale. ‘I just wanted a name that would grow with the business,’ she says. ‘I started with Primrose because of our location [Primrose Hill is nearby] and realised that rose has more good connotations. It’s a flower that we like and a colour [pink] in French.’
Rose & North does not limit its clients to a particular niche or category, and they range in age from 20s through to 90s.
North has grown the business cautiously and cost effectively by taking on administrative support and outsourcing the paraplanning, and has nearly doubled income from £93,000 to £182,000 since 2013.
Initial charges are between 0.75% and 3%; and ongoing is 0.5% a year. On average, clients have an annual review meeting, but it varies depending on the complexity of their needs. They also have unlimited access to the team and North, who is the sole adviser.
North thinks 0.5% is fair and sees no need to increase it. ‘We get paid fairly and we can deliver what we need to,’ she says. ‘Also we are becoming more efficient, by streamlining the back office and processes. Many advisers are doing a brilliant job and can justify higher charges. Many are not.’
Tailoring portfolios to clients’ financial plans
Rose & North runs bespoke in-house portfolios. North says she tailors so she can tweak allocations if necessary based on discussions with the clients.
‘For example, [I can tweak] if the allocation is telling me to hold a lot in cash, but I know [the client is] holding that separately,’ she says. ‘It is the same for government bonds, which are not necessarily as effective as they could be in a portfolio at the moment.’
North’s investment philosophy is similar to that of Carl Richards, author of The Behavior Gap: ‘Set the asset allocation according to the financial plan, choose the investments using a structured process, then leave it.’
She says the approach is not aimed at making decisions based on market developments. ‘If [forecasting tool] eValue changes its allocations, we will follow its suggestions. But there are a handful of people globally capable of effective market timing. It is too much risk for the client, so everyone remains invested.’
Despite the ‘leave alone’ strategy, 96% of the firms’ portfolios are active.
‘Fund choice is relevant but daily monitoring is not,’ says North. ‘I don’t only want market exposure; I want a mix of fund managers who will get me market return and know what to do in [different market situations].’
Controversially, North takes this a step further by not rebalancing portfolios regularly. ‘Rebalancing means reducing units in the best-performing funds and investing in those that haven’t performed as well, which doesn’t make sense,’ she says. ‘Rebalancing takes away growth from the portfolio and costs the client by buying more units.
‘Also we compared a client’s DFM portfolio with ours at annual review. [The DFM] changed things daily and we didn’t. We outperformed theirs and we were cheaper.’
Rose & North’s typical bespoke portfolio with 60% equities has beaten the ARC Balanced Asset Private Client Indices benchmark in 2012, 2013 and the year to date.
North says the standout sectors in the portfolio have been US equities, commercial property and UK smaller companies. The funds that have performed well include BlackRock European Dynamic, managed by Citywire A-rated Alister Hibbert; Invesco Perpetual UK Strategic Income, managed by AAA-rated Mark Barnett; and AXA Framlington American Growth, managed by Stephen Kelly.
According to Citywire Discovery, Barnett has delivered a second-decile risk-adjusted performance over 10, seven, five, three and one year in the UK equity income sector. Kelly is in the second decile for one-year, eighth decile for three-year, and fifth decile for seven-year risk-adjusted returns.
‘These did well for some time then hit difficulties,’ says North. ‘But we do not crystallise losses. When we believe in the long-term story, we wait for them to recover.’
*Data net of charges except adviser charges. Dividends reinvested
North is improving the firm's service constantly. For example, in January she added a cash management service, from Deposit Sense, which is free for larger clients. She also plans to start using a client portal from back office system Intelligent Office next year.
‘This will provide an overall summary of clients’ plan values,’ she says. ‘They can update [their details] easily and we can send messages through the portal. It is not as intrusive as email.
‘Over time, we will embrace all the ways we can to interact with clients and deepen relationships. As well as the portal, I am thinking about different offerings for different clients: for example, portfolio structures that may suit clients with smaller budgets.’
The firm has benefited from tight cost controls. ‘In the first year I spent a lot on setting things up,’ says North. ‘The second year was much more controlled and costs went down. This year they are up again as I invest in more staff and growth. I also plan to take on a trainee adviser next year.’
Recurring income as a proportion of overall income is falling for the happy reason that the firm is taking on a lot of new business. It has also started to do more mortgage and insurance business recently to meet the needs of its younger clients.
‘We are not trying to build 100% recurring income with no new clients,’ says North. ‘As well as lots of enquiries from Unbiased, we have increasing numbers of client referrals, including via LinkedIn, which is a powerful and productive tool for us.
‘I network constantly and connect clients with other relevant contacts. That really helps because they do it for me in return. Also we have hosted educational dinners for clients and want to do more events like that.’
North has a master’s degree in French, German and social and political science from Cambridge. She hopes to use her French in the business.
‘We work in a multi-cultural location and want to build contacts with the French expatriate community through a contact,’ she says. ‘There is a French school at Kentish Town, nearby, which could help provide a pool of French clients.
‘For me it’s important to do something that adds value, is fun and is growing. This is such an exciting time as we are growing the team. I can feel that things are about to turn, so we are preparing for the next phase.’
North says she has high expectations of herself and others. ‘I am enthusiastic, full of ideas and sometimes get overwhelmed by the excitement of all the things I want to do,’ she says.
‘I can be volatile but I am fair. I need to be surrounded by people who also have the right bounces of energy – when someone’s energy is low, the others dive in.’
Although the business has settled into its stride, North is taking care not to lose the fighting spirit that carried her through the difficult early days.
‘I try not to forget how intense it was when I started. It was exciting but almost crippling,’ she says. ‘Now I am strict: I know I am unproductive if I don’t have time to refresh.’
Handy then that there is another local business where she can recharge her batteries and with which she is simpatico. ‘Primrose Bakery also has a story that I can relate to: a small business with a strong personality. Plus I really like their cakes.’
Five top tips
Surround yourself with positive, capable people; it makes hard work much more fun.
Dare to be different. Just because no-one else is doing it doesn’t mean you can’t.
Keep moving: there is always room for improvement and growth.
Take risks. If you fail, you have still learned something. If you succeed, all the better.
- Believe in yourself and your business. Your staff and clients will feed off your energy.