An enforced office move has not knocked Fraser Wealth Management off its stride, as Iain Mackie strives to maintain the firm’s high standards with an empathetic approach.
Structural damage to the building meant Liverpool-based Fraser Wealth Management had 12 days to abandon the site that had been its home for eight years. ‘I thought, never mind 12 days, we need to get our staff out right away,’ managing director Iain Mackie says.
The sudden move came as a shock, but the smell of fresh paint and Mackie’s beaming expression as I enter Fraser’s new abode signal exciting times ahead. ‘What do you think?’ he asks as we pass some decorators and head towards the modern, glass-walled boardroom.
IAIN MACKIE CV
2011-present Fraser Wealth Management, managing director
2001-2011 Self-employed, sports analyst
1999-2001 Allied Dunbar Assurance, assistant to national sales director
1995-1999 Prudential Financial Planning, executive branch manager
1992-1995 Manulife, area development manager and branch manager
1989-1992 Allied Dunbar Assurance, manager
1987-1989 Legal & General, life inspector
- 1982-1987 Nationwide Building Society, trainee manager
Fraser has been in its new office for a week when I visit to find out what has changed since the firm was first featured on the New Model Adviser® cover in 2008. At the time, directors Paul Bocking and Kevin Gillibrand had been in business for four years. Managing director Mackie did not join until 2011, but in the subsequent five years he has helped transform the already successful business into a BS 8577 certified, Investors in People gold standard firm with a full house of chartered advisers.
‘It was tricky for Paul and Kevin early on.’ says Mackie. ‘They started from scratch, but got a break and never looked back.’ The most significant break came with some persistence from Bocking and the subsequent sale of a crane hire business.
‘The story is fantastic,’ Mackie says. It starts at financial services group Prudential, where Mackie managed Bocking and Gillibrand. One day Bocking made contact with a client, which did not initially result in business. ‘Most people in a sales environment would give up on that sort of situation,’ Mackie says. ‘Paul didn’t. He kept in touch and built a relationship with that person.’ By 2007 Bocking had started his own firm and that client sold their crane hire company, adding £41 million to its assets under management. ‘And that was the big break,’ says Mackie.
Fraser Wealth Management charges a 1% initial fee of a client’s investable assets, subject to a minimum of £5,000 and a maximum of £10,000.
‘We introduced the cap because we wanted to differentiate ourselves and pitch for higher end clients,’ says Mackie. The firm charges an ongoing fee of 0.75% with all clients receiving a minimum of one annual forward planning meeting where their cashflow model is updated.
The firm calculated it needed to earn over £2,000 a year per financial planning client for them to be profitable clients.
Having left the profession in 2001, Mackie was none the wiser to Bocking and Gillibrand’s breakthroughs, until a string of attempts to get him on board finally convinced Mackie to embark on the journey with them in 2011. ‘It was too good an opportunity to miss. I didn’t realise how good a business they had,’ he says.
Mackie’s role as a non-advising managing director allows Bocking and Gillibrand to service the firm’s growing client bank, much of which is made up of business owners and professionals. New clients typically have a minimum of £250,000 investable assets, are seeking pension and investment advice, and fall into one of four levels.
Silver clients will have in excess of approximately £250,000 to invest and will receive one annual forward planning meeting. Gold clients will have in excess of approximately £500,000 and receive two meetings a year. Platinum clients will invest in excess of approximately £1 million with three meetings a year, and diamond clients will have in excess of £10 million and get at least four annual meetings.
Fraser’s segmentation bandings have increased over time. In 2008 the diamond tier did not exist, so platinum topped the process and clients would need upwards of £500,000 compared with the £1 million required to fall into this category today.
In 2015 and 2016 income flattened off as a result of not generating as much in new client fees and lower investment returns. ‘Obviously it can be a risk if the markets go down but over time you expect the markets will go up and therefore your earnings will go up,’ says Mackie.
In 2016 it removed clients it was no longer servicing from the books.
Fraser was forced to prove its resilience in 2010 when concerns began to emerge around Arch Cru investments. The firm was introduced to Arch Cru while at SimplyBiz, which it was a member of at the time.
It was seen as an alternative to property and recommended the investments to some clients in 2007: in no case investing in excess of 20% of a client’s assets and in most cases investing less than 10%.
In 2010 the firm received a complaint, which was successfully defended and closed with the assistance of SimplyBiz. However, following the Financial Conduct Authority (FCA) redress scheme, announced in 2014, which called upon firms who had advised on Arch Cru investments to review all relevant cases, Fraser was required to pay out a total of £250,000 to affected clients.
‘There was a set spreadsheet of questions from the FCA that had to be followed for each case, and it became obvious that even the case we successfully defended was one we would have to pay out on under the FCA redress guidelines,’ says Mackie.
‘We thought the insurers who helped us defend the claim would pay out, but that wasn’t the case. When the redress scheme came out we were given the process to follow, but insurers believed we should have approached them before admitting liability to clients. The scheme was so prescriptive that we didn’t have a choice. After seeking legal advice we decided to avoid further costs and made the payments single-handedly.
‘That’s the positive in this, we were so financially prudent, and doing well, we had enough money in the bank to pay out. A lot of firms didn’t,’ says Mackie.
Mackie says the team are more cautious and thorough since the incident, in terms of investment due diligence.
Tech helps Fraser plot portfolios and pick top tiers’ DFMs
Fraser Wealth Management runs 10 risk-rated model portfolios using Distribution Technology’s Dynamic Planner to determine broad asset allocation in each portfolio.
Mackie carries out statistical analysis of each sector to determine exact asset allocation. For example, if Dynamic Planner advises a 20% investment in UK sectors, Fraser may choose 10% in UK smaller companies and 10% in UK equity income.
To select specific funds within an asset class, Fraser uses CleverAdviser Technology, which measures funds against nine criteria and places the top performing fund into the portfolio until it falls below a certain threshold and is replaced.
Mackie carries out investment performance monitoring on portfolios on a monthly basis, measuring against the Asset Risk Consultants benchmark. ‘We have been using CleverAdviser since 2010 but had no way of knowing whether it was delivering,’ he says. ‘I spent months plotting different model portfolios against our own and hardly any were stacking up as well.’
This process helped Fraser select discretionary fund managers, used typically for platinum and diamond clients to add diversification, including Vanguard Asset Management, PruFund and Brewin Dolphin. For risk profiling the firm uses FinaMetrica.
Mackie says the firm did not lose a single client as a result of Arch Cru and that the episode did not affect subsequent business for Fraser, which was able to continue building on its ‘lifestyle financial planning’ proposition. ‘We were introduced to financial planning at Prudential and thought it was a great process, being not just product driven. Paul and Kevin brought that concept with them,’ says Mackie.
An additional lifestyle angle was inspired by financial planning coach Paul Armson, and Fraser aims to give clients confidence to spend their money on a fulfilling lifestyle, with the help of Voyant’s cashflow modelling software, reflected in the firm’s strapline: ‘For the life you want to live.’
‘People really like that, it resonates with them,’ Mackie says. Fraser’s online lifestyle hub further embodies this principle, turning what Mackie calls the old ‘boring, typical IFA website, which focuses on products’, into a blog that features lifestyle-related content, such as holiday destination ideas and top restaurant listings.
Mackie is an outwardly enthusiastic and sprightly character, and at 56 enjoys playing football every Saturday. His energy feeds into the firm and he is clearly passionate about his staff. ‘I really care about people,’ he says. ‘I have regular one-to-ones with staff to find out what’s going on in their lives as well as in work, [in order] to empathise with them.’ Mackie has helped the firm achieve the gold Investors in People accreditation, recognising an organisation’s outstanding staff support and people management.
Top of their game
Fraser has not lost a member of staff in three years, so Mackie’s caring nature is paying off. However, he says he is no soft touch and sets high standards for the firm’s processes and procedures. All advisers at Fraser are chartered, the minimum for any new advisers coming through the firm, which has an ISO 22222 accreditation. The firm has met the BS 8577 framework for the provision of financial advice and planning services, which covers the management of an adviser firm and its delivery of efficient advice and client processes.
Having ticked the organisation, qualification and staff satisfaction boxes, this year Mackie will focus on strengthening the firm’s relationships with professional connections to provide client leads to Lisa Selwyn-Shepherd and Jonathan Murphy, who will be making the transition from paraplanners to chartered financial planners. ‘We have the business as good as we can get it. Now I want to focus more on getting out, marketing the business and telling people how wonderful we are,’ Mackie says.
FIVE TOP TIPS
Be the best you can be in everything you do.
Know your business inside out. It helps you make the right decisions.
Look after your staff: continuity is vital for your relationship with clients and professional connections.
Give people responsibility, trust them and listen to their opinions.
- Focus on what you can control and what you do well.