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Adviser profile: Neil Jefferies of Adroit Financial Planning

For Adroit Financial Planning, taking on personal injury cases means giving a voice to the vulnerable and helping them reestablish their lives, says Neil Jefferies.

Neil's CV:

  • 2015–present: Adroit Financial Planning, head of financial planning
  • 2012–2015: Tees Financial, managing director
  • 2008–2012: Coutts Bank, senior financial planning specialist
  • 2004–2008: Coutts Bank, senior manager (sports and entertainment)
  • 2003–2004: Charcol Holden Meehan, sales manager
  • 2002–2003: Barclays Financial Planning, business development manager (secondment)
  • 2000–2002: Woolwich Independent Financial Advisory Services, regional sales manager

Professional memberships/qualifications:

  • Dip PFS (CII)
  • AFPC (CII)
  • Chartered Wealth Manager (CISI)
  • CF1, CF30

Neil's CV:

  • 2015–present: Adroit Financial Planning, head of financial planning
  • 2012–2015: Tees Financial, managing director
  • 2008–2012: Coutts Bank, senior financial planning specialist
  • 2004–2008: Coutts Bank, senior manager (sports and entertainment)
  • 2003–2004: Charcol Holden Meehan, sales manager
  • 2002–2003: Barclays Financial Planning, business development manager (secondment)
  • 2000–2002: Woolwich Independent Financial Advisory Services, regional sales manager

Professional memberships/qualifications:

  • Dip PFS (CII)
  • AFPC (CII)
  • Chartered Wealth Manager (CISI)
  • CF1, CF30

An atrocity 

On 22 May, Manchester will mark the first anniversary of the Arena concert bombing that claimed the lives of 22 people. That day, the worker bee, previously a symbol of Manchester’s industrial past, came to represent the city’s solidarity in the face of tragedy.

Adroit Financial Planning carries out personal injury claim work through its parent company, Australian law firm Slater & Gordon. So head of financial planning Neil Jefferies met some of those affected by the attack.

‘Slater & Gordon has been looking after some of the victims. As a result, we got involved with a few as well. I interviewed two girls who lost their parents. They were probably the toughest meetings I’ve done in 30 years,’ he says. ‘They were remarkably resilient and just trying to crack on, but it was difficult. In situations like that, you just want to chip in. All the advice given was free. You just want to do your bit really.’

I met with Jefferies on a gloomy Friday marked by familiar Manchester drizzle. As a recently returned native of the city myself, I asked him what it is like to be an honorary Manc. Currently, he is based in Suffolk and spends a lot of time on the road commuting. So what does he love about Manchester?

‘The people are really nice. I lived in [hipster neighbourhood] the Northern Quarter for a year. But I had to leave because I couldn’t grow a beard,’ he jokes.

In his spare time, he is a Spurs fan, a golfer, and a cricketer playing for Bury St Edmunds. ‘I bowl slow off-spins these days, but at the cricket club they call me The Wizard. I get a lot of wickets.’ 

Jefferies joined Adroit in 2015, having previously held roles at Tees Financial Planning and Coutts. He started out at Allied Dunbar in 1987 where he worked entirely on commission, with a side hustle labouring on building sites to pay the rent.

Today, he has 50 clients, mostly based in the north west. He is starting to hand over some of his client work to a colleague so he can focus on growing the business.

Helping those in need (pt.1)

Around 90% of Adroit’s business is personal injury and clinical negligence related. Referrals come through Slater & Gordon, which bought Manchester solicitor firm Pannone in 2013. Adroit had been Pannone’s financial planning arm before it spun off in 2012, with Pannone retaining a majority stake.  

There are a few different strands to the business, including pre- and post-settlement advice, benefits advice, expert witness work, pension loss calculations and financial planning.

The firm often deals with vulnerable clients, such as people with brain injuries caused by workplace or road traffic accidents, and its job is to ensure their money is invested effectively to meet their future needs. This requires taking a more cautious investment approach to preserve capital.

For example, a client might know they will have to spend £50,000 on a new set of prosthetic limbs in a few years’ time. Adroit’s discretionary fund manager (DFM) might put the money into a structured investment maturing in five years so it knows the money will be available when required, Jefferies explains.

‘As soon as the injury starts, we can help. Once the settlement is done, we advise on things like personal injury trusts. Then we help clients make sure the money lasts the rest of their lives,’ he says.

Helping people (pt.2)

Another string to Adroit’s bow is a divorce proposition, currently in development. For this, the firm will team up with a mortgage broker to offer property advice. It will also include cashflow modelling to work out how much divorcing couples need to live on, what share of each other’s pension they should get, and advice on critical illness cover to protect maintenance payments. 

Jefferies says the firm is on track to hit nearly £200 million by the end of this year. His ambition is to have £500 million under advice and 1,000 clients by 2021.

Where will the growth come from? It will mainly come through referrals from Slater & Gordon and other law firms Adroit has relationships with. Expert witness work today will turn into investment business in a few years’ time, Jefferies suggests.

Growth also comes through recruitment. Adroit has 13 members of staff, some of whom have joined from Frenkel Topping, a competitor in the personal injury field. Frenkel Topping told New Model Adviser® it lost £40 million in assets in 2017 as clients followed three exiting advisers, two of whom went to Adroit.

But Adroit has also experienced this from the other side. The group lost £63 million in 2016 when two advisers left and took their clients with them (although it had gained £13 million by the end of 2017). But Jefferies views it as fair competition.

‘If clients want to stay with an adviser they have been with a long time, it is their money. They can do what they like,’ he says. ‘To be fair to the guys who left, they were very good about their covenants, but a lot of clients tracked them down. It is part and parcel of the profession.’ 

Fantastic fusion

In the platform space, Adroit uses Cofunds, Standard Life and Old Mutual Wealth, but is in the process of replacing them with Fusion. Jefferies describes it as ‘the most client and adviser-friendly platform I have ever seen’, adding it has ethical options, which more clients want, and no DFM fee.

By contrast, he is underwhelmed with the service from the other three platforms: ‘Cofunds is a nightmare. It hasn’t got a clue what’s going on. Standard Life is OK, but the platform is not that functional. While Old Mutual is a decent platform, I don’t see the point of having three different ones.’

He points to the range of DFMs on the Fusion platform, including its own in-house DFM plus external managed solutions, calling it ‘pretty comprehensive’. Moreover, he points out the lack of a DFM fee makes it look competitive on cost.  

Adroit also now uses threesixty for compliance support and training, replacing SIFA. He explains: ‘We were with SIFA, but I changed to threesixty as I had used it before. SIFA was doing a similar thing but I don’t think it is as geared up as threesixty.’

Adroit prefers clients to have at least £150,000 to invest to ensure the firm is profitable. But it is looking to help the underserved with plans for a new robo-advice service. Priced around the 35 basis points mark, it would target millennials who already expect to manage their money online.

‘When people have less than £100,000, the entry level service proposition means we are losing money to go out and review them once a year. If you have £100,000, we are making £750 a year on that. If we are charging £200 an hour to go out and see them, we are not making any money on that at all,’ says Jefferies.

‘Although you want to do your best for every single client, you do have to make a profit.’

Regaining normality

Firms that deal with personal injury claims are often labelled as ‘ambulance chasers’, just out to make a quick buck. I ask Jefferies how he would respond to those sorts of comments. 

‘People can say that. But somebody who has been injured in a road traffic accident, or as a result of clinical negligence, often can’t work,’ he says. ‘Their life has been changed irrevocably, and they probably live in pain. Compensation is not a windfall. It’s replacing what they would have earned and paid into a pension, had they been able to live a normal life.’

After a painful year for the city, Adroit has tried to do its bit to help those Mancunians who suffered as the result of the bombing. Maybe they will now be able to look forward with greater financial security and greater hope for the future. 

 

The fee bit...

Adroit Financial Planning has three tiers of service: Standard, Superior and Premium. These depend on the level of client assets.

First meetings are free. If someone decides to become a client, implementation fees are:

  • Up to £100,000:  3%
  • £100,000 - £200,000:  2%
  • £200,000 - £500,000:  1.5%
  • Over £500,000:  1%

Ongoing fees are then 75 basis points up to £3 million, tapering off after that.

Vulnerable clients are typically charged 35 bps (max 50bps). Court of Protection work carries no initial fees. Total cost of ownership for this work will be less than 1.6%.

‘For big cases, we go as low as 25 basis points because we are still making a return on that basis. Clients don’t feel ripped off.

‘You have to put the client at the centre of everything. Without them you haven’t got a business. Most clients accept the fact we charge what we charge.’

There is a separate fee for expert witness work, and any other work is charged at £200 per hour.

The investment bit...

Since joining Adroit, Jefferies has outsourced the firm’s investment work.

‘When I joined, all the portfolios were on an advised basis. The guys spent all their time meeting fund reps and not doing any client work.

‘My remit was to grow the business and I knew advised portfolios weren’t sustainable or scalable. By outsourcing the investment proposition, you immediately reduce the risk to the business.’

Around a quarter of the firm’s total assets are still in four risk-rated model portfolios managed by an external consultant from Wealth Analytics. These are cautious, balanced, adventurous and aggressive.

None of these model portfolios include passives, as Jefferies believes active funds give more stability. He says his clients would worry more about volatility than cost.

‘When you are looking at clients that tend to be low risk, passives can be quite volatile. So we have gone for a more active approach to try to get a more steady return.’ Is he worried about the cost saving implications? ‘Our clients would worry more about volatility than value for money,’ he says.

For the other three-quarters of assets under advice, the group uses DFMs.

Jefferies conducted painstaking due diligence among 184 providers in the marketplace to find the right ones. Jefferies says he would not use a DFM with less than £5 billion under management. He also wants DFMs that are publicly listed and have Court of Protection experience. They also need to link into Adroit’s back-office technology easily.

After narrowing down the selection in this way, he ran them through Defaqto, and then met their chief executives and investment managers. He settled on three: Brooks Macdonald, Quilter Cheviot, and Canaccord. Every couple of years, he repeats the same due diligence.

He is pleased with performance so far and has reached an agreement with them on charges he thinks offer value for clients.

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