Stefan Fura has guided Furnley House into a strong position, doubling income in the past two years. Now the keen football coach wants to mentor the next generation by promoting advice and pitching the value of financial education.
Fura, senior partner at Furnley House, is passionate about financial education, having seen his grandparents struggle financially with no access to advice.
Fura, who was a 2017 New Model Adviser® ‘Top 35 Next Generation Adviser’, says his grandparents were forced to downsize, moving out of a home they did not want to leave. ‘They were from an age where people believed the state pension would be enough,’ says Fura. ‘But if they had had good advice it surely would have helped them.’
Stefan Fura CV
- 2016–present Furnley House, managing director
- 2013–2015 Furnley House, senior partner/IFA
- 2011–2013 Positive Solutions, IFA
- 2011 Nationwide Building Society, financial adviser
- 2010–2011 Alliance & Leicester/Santander, financial planning manager
- 2008–2010 Alliance & Leicester, financial adviser
- 2007–2008 Alliance & Leicester, financial protection adviser
- Certificate in Financial Planning CII
- Diploma in Regulated Financial Planning CII
- Diploma in Financial Planning DIPFA
- Certificate in Discretionary Investment Management CII
- AF3 Pension Planning
- AF4 Investment Planning
This experience spurred him to set up a successful, sustainable and accessible advice firm. He met the two men who would become fellow senior partners, Neil Haley and John Woolhouse, while working at national IFA Positive Solutions. By mid-2012, they were ready to start a company, which they christened using a mash-up of their surnames.
By coincidence they came across an empty office called Furnleigh House in a Leicester suburb near where they were based. Deciding it had to be fate, they snapped up the premises in March 2013, and made its brass lion head door-knocker their logo. The fact the office had eight rooms, even though they only needed one at the time, was a mark of their roaring ambition.
The new firm immediately took on independent consultant David Shelton to help it define a retail distribution review-friendly proposition and segment the client base according to client needs and value provided.
Another big influence came in 2015 when Fura joined business advice group Vistage. This involves local business people meeting monthly to help each other. ‘We also have about six speakers a year, covering a broad mix of topics,’ says Fura. ‘For example, we had Steve Peters, author of The Chimp Paradox; and coach Lynn Leahy on emotional intelligence. The latter was so good we took our management team on a two-day exercise about emotional intelligence.
‘Vistage also taught me how to coach rather than manage people as a way of sustaining long-term performance.’
Coaching factors heavily in Fura’s personal life. The football-mad adviser started coaching junior players in the summer of 2016 when one of his two sons joined a team and started playing in leagues. He now coaches two teams, with a third on the horizon, and takes his sons to every Leicester City home game.
Although he describes coaching as his ‘second job’, Fura says he has a good work-life balance. ‘Work-life balance is not about quantity, but quality,’ he says. ‘I go home at a reasonable time and my weekends are mine.’
Through Fura’s interest, Furnley House now also sponsors junior sports teams. ‘We sponsor a football team in Kirby and Syston rugby team,’ he says. ‘We like youth sport.’
Furnley House has developed its advice offering continuously to adapt to client needs. For example, it has increasingly used Voyant cashflow modelling since the pension freedoms came into force in 2015, says Fura.
Haley has gained the Society of Later Life Advisers accreditation, and the firm set up a working group on long-term care to understand the area better.
Woolhouse has specialised in pensions and divorce, through working with solicitors.
Fura gained a discretionary investment management qualification to support the firm’s in-house proposition.
He and other team members also have pension transfer qualifications. The huge interest in pension transfers over the past two years also prompted them to start training staff more in this area.
Furnley House has worked with, among others, SimplyBiz group compliance director Gary Kershaw, who has helped with auditing. The firm uses cashflow modelling and Fura says he always starts from the default position of staying in the pension.
‘We have had three audits on our approach and are comfortable with it,’ he adds.
Such initiatives have helped Furnley House grow quickly from £560,000 income in 2015 to £1.3 million in 2017 (see chart below). It also opened offices in Northern Ireland in 2015 and Leamington Spa in 2016. The firm has appointed new shareholders: senior partner Kevin Dunn in 2014 and distribution director Richard Burrows in 2015. Paul Chada, financial planner in the Northern Ireland office, and George Simpson, financial planner at Leamington Spa, also became shareholders in 2017.
The growth prompted Furnley House to start using external consultants to help develop in areas such as investment, compliance, human resources, finance and marketing. ‘A big part of our expansion has been knowing what you are good at, and where you need extra expertise,’ says Fura.
The firm also appointed Chris Everard, East Midlands chair of Vistage, as a non-executive director. ‘Chris chairs our board meetings and challenges me on business performance each month,’ says Fura.
Furnley House has three client segments: foundation, premium and bespoke.
Foundation clients pay up to 3.5% initial, including any implementation of new investments, and 0.5% ongoing. They tend to have a pension, but no other savings or investments. They receive an annual meeting and brief investment report.
Premium clients pay 2.5% initial and 0.75% ongoing and typically have between £100,000 and £400,000, with a mix of pensions, savings and investments. These clients go into an in-house portfolio, with detailed quarterly updates. They receive an annual planning meeting, or two if they need; and are introduced to client relationship managers.
Clients with large portfolios and/or specific complex needs around inheritance tax or multi-generational planning are on the third tier, which is bespoke. They pay fixed initial fees, plus between 1.5% and 2% implementation, and up to 1% ongoing. Both premium and bespoke clients have access to the firm’s client portal.
Furnley House has around 1,600 non-active clients mostly from mortgage work and employees in corporate schemes. But it receives no ongoing remuneration from these clients.
Of its 1,500 active clients, around 1,075 are corporate client employees who also pay no ongoing fee, but their company pays a fixed fee or retainer for some level of service to employees. The remaining 425 active clients are private individuals paying an average recurring income of £1,700.
‘We have done lots of work on costing and base the fees on the time cost and competitor analysis,’ says Fura. ‘We are comfortable that the charges cover our profit.’
Eye for talent
Everard says Furnley has grown so quickly by recognising how important people are to its success. ‘It has a structured recruitment system,’ he says. ‘It works hard on retention and development; and all the managers are on leadership training programmes with mentoring. This culture enables the best possible working environment.’
He says Furnley House has already taken on seven apprentices and five graduates since 2013.
‘It is the wrong mindset that only large corporates have graduate schemes,’ he says. ‘The majority of graduates go into smaller organisations. But it makes a huge difference by bringing in new thinking. Graduates don’t hold all the old myths about financial services. They have a research-based, analytical approach.
‘The profession has an ageing workforce so finding the next generation will be a challenge. But it’s crucial because ongoing uncertainty around regulation and legislation means they must remain agile and highly aware of the effect of changes.
‘They also need the next generation to help combat the [finance] industry’s continuing negative public image,’ says Everard. ‘The team at Furnley House do a great job overcoming through its public relations, marketing, sponsorship and community work. For example, they go into colleges, universities, and other local organisations, and encourage everyone to [get involved]. This, together with ongoing training and development of all staff, will set them apart.’
Fura adds value for clients at all levels through model portfolios and DFM service
Foundation clients typically have a pension solution from Royal London or a model portfolio service from Parmenion. Premium clients have an in-house model portfolio, with active and passive options. Bespoke clients may get a model with extra satellite holdings or, for more specific needs, an outsourced discretionary fund manager (DFM).
Furnley House typically uses DFMs Parmenion for clients with ethical needs and Psigma for mandates designed to complement clients’ existing portfolios.
The firm uses consultant Asset Intelligence for all quantitative research work on in-house investment selection, plus some qualitative.
The Furnley House Active Model Portfolio 5 outperformed the Investment Association Mixed Investment 20% to 60% Shares sector in 2015, 2016 and 2017, albeit with a relatively high equity content.
‘We [also benchmark against risk profiler] Distribution Technology’s default asset allocation, as our portfolio is a tactical overlay of that,’ says Fura. ‘The analysis shows we are adding value in our fund selection and our asset allocation.’
The portfolio’s best absolute performing fund in 2017 was the Old Mutual North American Equity fund, managed by Citywire AA-rated trio Amadeo Alentorn, Ian Heslop and Mike Servent. ‘America is difficult to outperform in, but we like Old Mutual’s quant-based approach,’ says Fura.
Fura says he wants to build more relationships with universities, to improve financial planning education and encourage it as a career.
‘We also want to educate about our profession and values as part of financial education in schools,’ he says. ‘That will help some gravitate towards the profession.
‘It is not just about advisers, but understanding paraplanning as a profession and a quality back office as a valuable resource too,’ he says. ‘We have a responsibility to set that scene.’
Furnley House is determined to help plug the advice gap, especially for younger clients. They researched the subject and published a white paper on it last year.
‘We want to be sustainable,’ says Fura. ‘To do that, we need to understand how to engage with the next generation of clients and shape our proposition for the future. The most important finding was how much people value face-to-face advice, which surprised me.’
Total profits excluding dividends and drawings have risen steadily at the firm. But as a percentage of income, profit fell from 34% to 19% between 2015 and 2017. This was when the partners moved away from dividend remuneration to market rate salaries plus a share of up to 30% of profits as dividends. The firm projects that profit margin will move up to 28% this year.
Furnley House aims to reach £1 million of distributable profit within two years. Fura says: ‘Our values are client-centricity, sustainability, innovation, community and bravery. Each shareholder takes responsibility or joint responsibility for one of these values and the projects that promote it.
‘We involve all staff in our ambitions via a new shareholder scheme [details not yet finalised]. This style of ownership will help us meet our ambitious growth plans. Developing our other offices is also a major opportunity.’
Ultimately, Fura believes better education will avoid families suffering the same bad financial experiences as his grandparents did. ‘Many of us have seen relations suffering because they haven’t planned retirement provision or protected against the loss of a family member,’ he says. ‘Only then do they see the importance of sound financial planning.’
FIVE TOP TIPS
- Culture eats strategy for breakfast. Create and harness an excellent culture.
- American business consultant Jim Collins said: ‘Get the right people on the bus in the right seats.’ Recruit the right people to your team but pay as much attention to making sure your existing staff are in the right position to make a difference.
- Learn from your mistakes. Recognise what didn’t work and why then do better next time.
- Embrace coaching; it can be slower to get results but creates much better longer-term outcomes.
- Do not just blend in with the crowd. Have an opinion and stand for something.