Despite being rivals on the rugby field, Phillip Owen and Anthony O’Connor have worked together, linking advice with accountancy, to create a formidable unit at RPG Wealth.
Phillip Owen and Anthony O’Connor are flying the flags for Wales and Ireland, respectively, in this week’s shoot. So you can imagine my surprise, as I interview them at RPG Wealth’s Manchester office, when they attribute their success to speaking in ‘plain English’. Welsh, surely!
Breaking it down
RPG Wealth is flying high right now, having won the New Model Adviser® award for the North region in January. Director and chartered wealth manager Phillip Owen tells me it is often the intangibles and service elements, rather than just the hard financial metrics, that separate a decent firm from a great one. ‘When you look at financial planning holistically, it’s a people game,’ says Owen. ‘It’s very much down to the soft issues.’
This does not preclude knowledge of the technical detail, but it does mean an adviser should be able to relay it to a client in a way that makes sense and fits with their financial plan. Fellow director and chartered financial planner O’Connor agrees readily.
‘Our job is to sit down with the client prepared, understanding that they’re busy people running their own businesses,’ he says. ‘My objective, when we deliver something such as a discussion document, is that the client sits back and says: "I get it". That’s what we’re looking for: those three words.’
PHILLIP OWEN CV
- 1999-present RPG Consulting (now RPG Wealth), director
- 1995-1999 The Elwy Partnership, managing director
- 1986-1995 Midland Bank, private banking manager
RPG Wealth has £110 million in assets under advice. It advises mainly business owners, but looks after NHS workers and personal injury clients, as well as advisory employers such as GP practices and law firms. Professional connections have been the catalyst for growth and the firm is linked to a sister business, RPG Chartered Accountants.
‘We have a really strong buy-in from the accountants,’ says Owen. ‘They realise we’re trying to do a proper job, and that we try to charge a fee that’s commercial but right by the clients. They’ve really endorsed what we’re trying to do, and I don’t think we could have got to where we are, from where we were, without that endorsement.’
The internal referrals have provided a strong base for RPG, but the firm has ambitions beyond just picking up clients through the accountancy firm. With the RPG brand being a familiar and respected local name, Owen and O’Connor have been ramping up the firm’s work with solicitors, finding business success in personal injury claims in particular.
RPG carries out a broad range of planning and advice work. It is also seeking to grow its non-domicile client bank, but is closely monitoring the effect of Brexit in case issues arise for the European resident clients on its books.
ANTHONY O'CONNOR CV
- 2013-present RPG Wealth, director
- 2005-2012 HSBC, regulated relationship manager
- 2002-2004 Lyons Kenny Solicitors, legal executive
- 2000-2002 Irish Mortgage Corporation, financial adviser
RPG targets a service that Owen says is ‘bespoke to each client, up to a point’. This presents a challenge: how do you define a service that is different for every client? Surely this adds cost to the process?
Much like Owen’s beloved sport of rugby, the answer is working as a team; having the right people in the right places. The RPG remuneration model has no individual targets or bonuses. The rationale is that jobs should be carried out by those best placed to do them.
Owen and O’Connor pick out individuals such as John Sangster, head of investment research, who takes the lead on any advice relating to venture capital trusts (VCTs) or alternative investments, and corporate financial planner, Peter Lower, who runs the corporate side of the RPG Wealth service.
They say delivering a bespoke service helps future-proof the business. ‘The old model is annual review, a 10-minute chat about investments, shake hands and arrange the next review,’ O’Connor says. ‘If that’s what you do now, you’re an Apple or a Google programme away from being extinct.’
RPG has a bespoke charging structure for clients, which is by and large time-based. The firm applies an hourly rate of £250 per hour for the work of a director, £75 per hour for a paraplanner and £35 per hour for an administrator. However, clients are offered flexibility around the way they pay, with some opting to agree a retainer. Those who require less contact or fewer reviews can save money too.
Time-costing advice means the firm can easily separate financial planning fees from charges that relate to investment management, which helps clearly break down costs for clients.
RPG has been constantly evolving since featuring on our front cover in 2009, and O’Connor’s arrival at the firm in 2013 might just have provided the most notable change. O’Connor has brought in a significant amount of business advising on workplace pension schemes for employers, and advising business owners on issues such as shareholder protection and legacy planning. The firm works in tandem with the accountants to help businesses make contingency plans for a business’s future.
Many of those clients have gone on to become fully-fledged financial planning clients in their own right.
‘Corporate clients invariably end up as private clients, because they like the way we operate,’ says O’Connor. ‘If you do a good job for somebody on the protection, it’s a case of asking the next question.’
While O’Connor has evidently strengthened the RPG proposition, the duo are keen to praise the teams behind them, which operate out of Manchester and St Asaph in North Wales. ‘It’s not just the two of us,’ says O’Connor. ‘It’s the team around us that has enabled us to focus and concentrate on more specific roles.’
Looking to make further progress, RPG has brought in a trainee adviser. ‘It’s arguably the best decision we’ve ever made,’ says O’Connor, who appreciates the insight provided by a fresh pair of eyes.
Owen agrees, adding that the rest of the team has been buoyed by the hire, with everyone recently putting their name down for an exam with the Chartered Institute of Securities & Investment. ‘Just having that internal competition has been helpful,’ he adds.
Uncertain outlook outweighs principled passive preference
RPG outsources some investment to Morningstar, but otherwise manages investments in-house, using FinaMetrica’s risk profiling software and a core/satellite approach. With in-house investments, the starting point is always passive, but in the overall breakdown the funds used are effectively an even split between active and passive.
Owen explains that while RPG prefers the passive approach as a matter of principle, the current market landscape lends itself to active strategies. ‘In 2009 we were far more into the passive profile, because a recovery was on the horizon,’ he says. O’Connor adds: ‘The premium on active is a premium worth paying at this moment in time,’ before referring to political uncertainty and the wildly unpredictable events of 2016.
RPG plans to slowly increase its weightings in contrarian funds this year, such as Troy Ruffer’s Total Return fund. ‘We like the way they manage our clients’ money, and they are well positioned for a revaluation of asset classes,’ says O’Connor.
RPG uses Seven Investment Management’s platform for the bulk of investments, but also uses AJ Bell. The former is seen as particularly beneficial to clients, owing to the lack of trading costs. All portfolios constructed by RPG are bespoke, in fitting with the company’s general approach to financial advice.
The next step for RPG is to get its London office up and running. The firm has had a few false starts in the capital, with two full-time London staff leaving the business in 2016. Owen admits London is a different beast to the regions RPG primarily operates in, but has belief in his team’s ability to make a success of it. ‘We’ll achieve it,’ he says.
RPG is also eager to ensure the service it offers continues to develop. As a result of moving away from having a dedicated resource in mortgages, the firm lost a further two staff in 2015. It will offer mortgage advice now only on request. In 2017, this means developing a defined benefit (DB) pension transfer assessment service for other IFAs referring clients, with transfers carried out if appropriate.
The firm also expects to further use the services of Sangster, and invest in VCTs and enterprise investment schemes for clients who are unable to contribute more to their pensions. This could be due to annual allowance limits, including those affected by the incoming taper, or the lifetime allowance.
Other than that, Owen and O’Connor are looking for a continuation of the growth the firm has enjoyed, and they see new connections, as well as business with solicitors and accountants, as the likely route. ‘It needs to be controlled organic growth, rather than just going for it without the structure behind the scenes,’ Owen says. He says they want to run their business ‘the right way’.
‘We don’t boast about assets under advice, and we don’t have to market ourselves,’ says O’Connor. ‘We’ve built the business under the radar really, and we do everything with as much integrity as we can.’
With that ethos at the heart of the business we can surely expect to see RPG back on the New Model Adviser® cover in another eight years’ time.
FIVE TOP TIPS
- Listen to your team. Give them a voice and the confidence that they will be heard.
- Think from the outside in: challenge every output through a client’s eyes.
- Continually strive to improve service levels and the quality of your output.
- Embrace IT and spend the time it saves creating a bespoke plan that clients understand.
- Create a positive workplace. Enjoy and take pride in what you do.