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Adviser Profile: Mark Insley of Ascot Wealth Management

Adviser Profile: Mark Insley of Ascot Wealth Management

Learning from his initial mistake of pursuing rapid expansion, Mark Insley’s Ascot Wealth Management is facing the future with confidence.

Mark Insley, managing director of Ascot Wealth Management and keen tennis player, is putting a fresh spin on his business model, as after early growth he decided he was headed in the wrong direction.

Insley began the firm from scratch in 2011, following a career as an equity finance trader.

This makes him somewhat of a wildcard entry among advisers and is politely scathing about a range of practices he wants to change, in areas such as charging, technology and business structures and the use of self-employed advisers.

His views on this last area were a score for experience after he decided to scrap his self-employed advisers in favour of a fully employed model.

His next target is high upfront charges. ‘I have never charged 3% initial,’ he says. ‘If I had a pension, why would I give 3% away? Margins will come down in the industry and initial charges will disappear.’

Instead he charges a maximum of 1% initial and nothing for new business from existing clients.

Ascot has a detailed menu of services – each of which charge differently according to client needs. This ranges from a one-off advice service to a family office and a ‘premier service’ where there is no limit on the extent of advice given.

There are so many options, it looks slightly labyrinthine; is there a danger clients will lose the thread?

‘It can be viewed as complicated,’ says Insley. ‘But I want clients to understand what they are getting and why, so it takes time to explain that.

‘I also split my ongoing fees between the first year and subsequent years because I don’t think you can make a call on how you want to engage with a client until after a year, neither can they.

'After the first year, the retainer is a minimum 1% [and most will be in the] higher servicing tier.’

MARK INSLEY CV

CAREER

2011-present Ascot Wealth Management, director

2010-2011 Orchard House IFAs, adviser

2006-2010 Northern Trust Global Investments, equity securities lending trader

2005-2006 JP Morgan, OTC derivative collateral analyst

PROFESSIONAL MEMBERSHIPS/QUALIFICATIONS

DipCII

CeMap

Step Certificate and Diploma in Trusts and Estates

PERFORMANCE

ACTIVE FUNDS: 45%

PASSIVE FUNDS: 55%

Small beginnings

Insley left the City to set up on his own with next to no advice experience. ‘I had managed my family’s assets since I was quite young,’ he says. ‘When I left my previous role, I knew I had three or four decent clients and wouldn’t go hungry in the first six months.’

From the start, he had radical plans to grow and soon raised 15% equity from a private investor to support this. ‘That allowed me to invest in technology and hire a full-time quantitative analyst for two years – although he left six months ago,’ says Insley.

‘Building our proprietary system, called Phoenix, has allowed us to grow at the speed we have.’

Ascot uses True Potential back office system, and Phoenix for internal controls, analysis and data collection. ‘Eventually Phoenix will be our front and back office system because if I reach say £10 million income I don’t want to pay True Potential a significant percentage of that,’ says Insley.

‘I am project managing the Phoenix design to cater for [other areas such as] paraplanning and analysis.

‘It will also take live feeds from Asana, a system that manages workflow from a lead to submission. It is highly integrated. For example, if we do a whole of life analysis it can go on to Phoenix – that talks to the spreadsheet, saves a PDF and puts it into the client area.’

Investment – Active options keep portfolios perky

Since June 2011, Ascot has run five in-house model portfolios up to around £250,000. Some of them include some more rarefied products such as EISs; plus there is a sixth specialist portfolio for clients interested in investing in gold.

The firm uses FE Analytics and Crown Ratings to select active funds.

‘I am considering [resources that can help us grow] such as Financial Analytics’ Select 100. But I don’t want to use a discretionary fund manager because you will never develop an in-house investment culture if you do.’

The portfolios maintain a roughly 55/45 split of passive and active investments. ‘That is important for keeping the portfolios below 0.5% annual management charge,’ says Insley.

‘We sit down once a week to discuss markets. Changes in the portfolios tend to be more in asset classes than funds.

For example, we increased exposure to commercial property funds from 1% to 7.5% in February, because commercial property funds tend to do well following housing market booms.

Eastern promise

‘One call we got right was taking an active position in India over this year, increasing exposure over the last two switches from 2.5% to a maximum of 5% in portfolios.

'India has suffered over the last two years, but business owners view the recent election result [a landslide victory for prime minister Narendra Modi’s BJP] as positive. I have made several trips there; it is an entrepreneurial country with a buzz around it.

‘Where we have lost out was by missing a 4% to 5% upside, which we would have got by pulling longer duration for shorter duration bonds at the end of last year.

'But I am not going to change that. I waited until Woodford Equity Income was down about 3% and about six weeks ago moved all our UK equity to it based on our view of the manager.’

Ascot has used composite benchmarks but will start to use Wealth Management Association benchmarks following client feedback, according to Insley.

‘The only problem with that is my portfolio three is positioned more defensively than its balanced [WMA Stock Market Conservative] index,’ he says. ‘That is why the portfolio is slightly down against the WMA so far this year. However, year to date, portfolios are doing better now because of India’s outperformance.’

Teething problems

 

Insley says the biggest mistake he has made was growing rapidly by hiring self-employed advisers – five at their peak – before realising this was the wrong model.

‘Initially, I felt there was an opportunity to get up to about 25 self-employed advisers, taking 30% [for each],’ he says. ‘I realised that, even with five, there was a big difference between them in terms of volumes of business written and how they operated.

'I went to a Financial Conduct Authority roadshow, just after the retail distribution review, where the risk was pointed out to me.'

Insley initially proposed set retainers and one-off fee work: ‘It caused a big split among the advisers. So a year ago, I decided to wind up the self-employed model. It was hard – you are dealing with human beings - but I was transparent.

'I had about three times as much business as the five combined. I had introduced a placement programme for students and trainee graduates and could see these people were more valuable to me after three months than people who had been in the profession so long.’

By February, all five self-employed advisers had left and now all staff are employed. Assets under advice fell after the move but only by about £1.5 million, says Insley, because most of the advisers were not doing much investment business.

It would have been more had he not bought around £3.6 million worth of assets from one of the advisers who had got closest to his model. ‘That adviser moved to Brazil but would be welcome back to the business in the future,’ says Insley.

The move left Insley as the sole adviser, supported by three full-time and one part-time trainee advisers. Though the situation has created a huge short-term workload for him, Insley anticipates that all the trainees will become qualified within six months and be able to take around 70% of client work off him.

Grape vine

Many of Insley’s clients have come through word of mouth referrals. However, he has also used lead generators Oportura and VouchedFor and is particularly enthusiastic about the latter.

‘I’ve been on VouchedFor for two years,’ he says. ‘We have received 15 leads from it and have or will convert 14 into clients. VouchedFor is so much better than the rest. It attracts serious people and it gives them control over who they work with.’

Insley is a fan of tax planning and of using enterprise investment schemes (EISs) and Seed EISs in particular. He says although here are risks involved, it is an attractive scheme for the right kind of investor.

Pre-funding two seed EISs himself sparked the idea for a platform that matches investors with schemes, and he set this up under the name Seed EIS Platform (SEP).

One of his own Seed EISs is called Model Your Cashflow. Insley set it up as a separate company to segregate the cashflow modelling part of Ascot’s service from regulated advice.

This creates various efficiencies but also opens ‘a huge opportunity’ to outsource the service to other advisers in the future.

Insley has trained a graduate who now carries out the modelling service for clients and runs the Model Your Cashflow business.

Insley also plans to create a specialist estate planning part of his business and split that out. ‘That is because it is more common for us to do wills and trusts before we start doing investments and is an important part of early client engagement.’

Insley’s investment in technology added to company costs until this year when projects finished and the full-time quantitative analyst left.

 

Linking up

He also has a joint venture with Alexander Taylor Accountants, and is enthusiastic about the potential for this partnership. The joint venture is a way of helping clients with their tax returns and company accounts.

‘The other party in the joint venture has realised that they do not need to search for clients if they stick with me; they can grow a bigger business that way,’ he says.

‘I would like to see accountants and solicitors working for advisers. Most solicitors don’t even consider how what they do affects the client’s tax position.’

Insley appears unconcerned by the complexity of his structure, saying: ‘I have put much thought into the proposition and how these separate businesses and functions can help me grow and support the core business.’

However, he admits that a year ago, he had too much on his plate with all these subsidiaries. ‘I recognised I couldn’t run the SEP platform and a wealth management company together,’ he says.

‘But one of SEP’s investors is running it, so I only spend about 5% of my time on the platform, which is more comfortable.

'Also I have separated myself from it [because Ascot is my core business] and I have to avoid any conflicts – so it is only one of a stable of EIS and Seed EIS providers that Ascot uses.

‘My knowledge in this niche area wins me high net worth clients because there are so few people that advise on it. It has got me at least four or five clients with £1 million plus because it was the first thing I spoke to them about.

‘We have just launched version two of SEP – that extra spend means it is not making profit currently. Model Your Cashflow is making a profit because it is such a low cost operation.’

Watershed moment

Insley says that next year he hopes the firm will ‘break through from a small lifestyle business to the next level’. In August, the firm moved to its current office in a modern building in the centre of Sunningdale, near Ascot, which Insley thinks should help it acquire more local clients.

By continuing to bring graduates through, he is confident of reaching £50 million under advice by December 2015, after which client book acquisition will yield the next leaps in growth.

‘Once I get there, I know of two or three firms with £100 million to £200 million that I could incorporate with. I already [beat several larger companies] to acquire a client base of £55 million but I turned it down.

‘Eventually I want £1 billion under advice; I am not scared of that. To achieve that I would have to make acquisitions, unless the technology developments alter the landscape in some way. I have age on my side.’

Insley usually works 12 hours a day. ‘My girlfriend Nikki gets why I do it and is supportive,’ he says. ‘I try and have one day on the weekend where I don’t look at the iPad and we go to the cinema or go to Foxhills sports club. This workload won’t go on for ever, but it will continue next year while I train up our advisers.

‘The best thing about the job is feeling like I am helping people, saving them huge amounts of money. The worst part is everything falls on my shoulders. I was up until 3.30am recently getting meeting packs the way I wanted them.’

Reflecting on the last three years, Insley says every new business owner makes mistakes. ‘I learned a lot about processes and controls from having had self-employed advisers,’ he says.

‘I am driven and ambitious, perhaps controlling at times, and have definitely turned into a perfectionist since working for myself.

‘I was at the Ryder Cup in September, buying champagne at 2am. One of my friends persuaded the barman to add a £25 tip, saying I wouldn’t notice. I did. It’s all about attention to detail.’

Five top tips

  • Always challenge the norm and aim to better it.
  • Ensure you know the financial numbers of your business.
  • Continue to educate yourself and build knowledge year on year.
  • Don’t be afraid of doing things differently.
  • Build a core team of people you can trust and rely on around you.

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