Rod Milne and Colin Hayden-Cook have transformed HFS Milbourne into Surrey’s flagship IFA for family law. The next step is embarking on a joint venture with a legal practice.
When we last profiled HFS Milbourne Financial Services in 2010, the firm was just starting to knock at the doors of law firms across Guildford, Surrey.
Eight years on the scales have tipped, so to speak. It is the legal profession that is seeking out managing directors Colin Hayden-Cook and Rod Milne instead.
Rod Milne CV
- 1986–present Milbourne Financial Services (name changed to HFS Milbourne Financial Services in 2005), founder and managing director
1976–1986 Commercial Union, broker consultant
- Dip FA Financial Planner (Level 4)
- Investors in People Gold Award
Colin Hayden-Cook CV
- 2005–present HFS Milbourne Financial Services, managing director
- 1985–2005 Hayden Financial Services, managing director
- 1983–1985 Bigmore Associates, consultant
- 1981–1983 Hill House Hammond, development manager
- 1976–1981 Bigmore Associates, general insurance broker
- Member of Personal Finance Society (PFS)
- Level 4 Diploma – Cert PFS
- Investors in People Gold Award
Having built the business up organically, Hayden-Cook and Milne have been able to leverage their experience towards lawyers’ needs. ‘We really have become known as the go-to firm in Guildford and the surrounding areas for family law,’ Milne says.
This expertise includes a Resolution-accredited specialist, and Society of Trust and Estate Practitioners qualifications. They also recurited Society of Later Life Advisers-accredited adviser John Hutton-Attenborough at the end of 2017.
‘A lot of IFAs give up on lawyers because they find them too hard work,’ Milne adds. ‘It is hard work and it takes a long time, but the technical skillsets we have built up are why lawyers now come to us.
‘In addition, the legal network around here is a very small community. Everyone knows each other. People move from different firms so you can’t afford to slip up. All you have to do is drop the ball once and it will go around like wildfire.’
HFS Milbourne is now getting on board with a holistic approach to advice, offering cashflow forecasting through Voyant. The next step is to enter into a joint venture with a law firm, acting as the financial advice department of that firm, to complement the three accountancy joint ventures HFS Milbourne currently has.
As well as being a huge asset to the business, Hayden-Cook believes the firm’s connections with law firms are part of the journey towards advice being seen more as a profession. ‘Our links with lawyers prove advice is a profession,’ the pair say.
However, Hayden-Cook says growing pains have been inevitable. He, Milne and fellow directors Iain Halket and Daren O’Toole have passed down clients and broadened the role of their paraplanners.
Paraplanners, or technical analysts as they are called at HFS Milbourne, work across clients rather than with one adviser on each case. ‘We pool our resources so we are more efficient and are using skillsets effectively,’ Hayden-Cook says.
‘The adviser is the Formula One driver. He or she drives the car, hits the pits and everyone runs around and does everything to get the car back on the road.’
An upshot of this, Milne adds, is staff retention becomes easier because more career paths open up. ‘We have the facility to bring people from paraplanner to adviser and we have a couple doing that at the moment.’
HFS Milbourne is one of the founding sponsors of Guildford Young Professionals, a networking group for people in the first five or six years of their career. Technical analysts are encouraged to attend the group’s quarterly events, where they can often socialise with associates at the law firms HFS Milbourne works with.
But, while staff retention might be good, recruitment has proved problematic. Hiring Hutton-Attenborough took up most of last year and Hayden-Cook says recruitment ‘is the biggest drag on the business right now’.
He says location may play a part in this difficulty, as the firm does not want staff taking long commutes into work.
Panning for gold
The firm could also do more to promote diversity.
Although technical analyst Jenni Robinson, who passed her chartered exam a few weeks ago, was one of last year’s New Model Adviser® ‘Top 35 Next Generation Advisers’, the firm has no women advisers.
‘Female advisers are like gold dust,’ says Milne. ‘The business opportunity for us to have a female adviser to go in to talk to our female solicitors, because most of them are female, would be phenomenal for business. It’s a very male-dominated industry sadly. That’s just the way it’s grown up and the way it’s been.
‘But as the advice gets more and more professional I think more and more women will come through,’ Hayden-Cook adds. ‘Our two technical analysts that have some client-facing work are both women and one of them is committed to going full time eventually. If we can help them make that transition that would be fantastic.’
HFS Milbourne charges 3% for investments up to £150,000 and 1% ongoing for a typical client using its model portfolios. Clients with larger amounts to invest are charged a lower initial fee. Milne says there is a fee matrix based on the cost per hour of advisers and paraplanners that can be used case by case.
Clients can expect around 14 points of contact a year: one or two meetings, depending on the size of the portfolio; four quarterly rebalancing emails; newsletters and other notifications; and budget reports.
HFS Milbourne sometimes bills law firms directly, or it will bill clients, albeit via their lawyer, depending on the nature of the service.
The hourly rate is £325 for the senior advice team and director level. Milne says this is based on the cost of each person’s time. It allows the firm to increase fees when law firms, as they often do, add pieces of work on top of what had been originally agreed. It also sits broadly in line with what lawyers are charging locally, he says.
Milne and Hayden-Cook know they are not the cheapest advisers but are very happy to stand by their fees for the value of the work they do. They say this is something lawyers and lawyers’ clients seem to understand.
One area in which HFS Milbourne has been outspoken about is defined benefit (DB) pension transfers. The firm will take on transfer work and has a two-stage reporting system to first check the viability of a transfer and then search for a suitable product.
‘We take the business risk side of this very seriously,’ says Hayden-Cook. ‘We hear of some firms writing DB transfer business at the drop of a hat and that is going to bite them on the backside.
‘You only have to look at British Steel to see the risk,’ Milne adds. ‘We initially said we wouldn’t do DB transfers but then decided we had to provide this service to clients who need it.’
In setting up their offering, the directors first called their professional indemnity insurer to ask an underwriter what kind of claims they were seeing and what claims were going through successfully.
‘Based on that, we adopted our two-stage reporting process and rigorous sign-off,’ says Milne. ‘And we probably turn down more than half of the cases we look at.’
Psigma non-exec helps HFS Milbourne advise on over £200 million in its managed portfolios
HFS Milbourne launched a model portfolio system in 2009. It has 10 risk-graded portfolios, an income portfolio and a fixed interest portfolio.
The firm has around £350 million client assets under advice, of which £240 million is held in its managed portfolios, called the Strategic Portfolio Service (SPS). ‘Early in 2017, we reached £200 million in our SPS portfolios and decided it was time to appoint a non-executive investment committee member,’ says Milne.
‘So we went outside into the fund management marketplace, did a beauty parade and selected someone.’
That someone was Rory McPherson, head of investment strategy at Psigma Investment Management, who joins the four HFS Milbourne directors on the committee.
‘He’s a really good steady pair of hands and we love what he’s done for us so far,’ Milne adds. ‘We’re not making dramatic changes to what we’re doing on the investment side. But with him there, when we go through bumpy rides like [the US presidential election of Donald] Trump and Brexit, that will be when he will really be able to help us.’
The firm’s philosophy leans heavily towards active management, but Milne says the firm uses the occasional Vanguard Global tracker. ‘We have also used an HSBC US Index tracker but we swapped that out for more active fund managers.’
The firm likes Neil Woodford as a manager and Milne stresses the balance between being ready to ditch favourites if they underperform and not making kneejerk reactions. Another fund he says has done well is the Natixis Loomis Sayles US Equity Leaders fund, managed by Citywire A-rated Aziz Hamzaogullari.
HFS Milbourne does not use a set benchmark for its portfolios. New Model Adviser® has used the total return of the FTSE 100 to illustrate performance of the Strategic Portfolio Service 6 (see chart below).
Enjoying the ride
In general, Hayden-Cook says now is probably the most exciting time of their careers and say their complementary entrepreneurial natures have helped them grow the business. The pair clearly know each other inside out. Both turn 61 this year, although Milne is quick to remind Hayden-Cook that he is two months younger.
They have no plans to sell any time soon as they believe they still have unfinished business. ‘It’s not the destination, it’s the journey that counts,’ says Milne. ‘And I don’t want to think about having that journey taken away just now.’
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