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Profile: JM Finn on why the future is with financial planners

Profile: JM Finn on why the future is with financial planners

JM Finn’s new thumbprint security feature on its wealth app is part of a quiet evolution at the company, designed to future-proof the business.

It has been a busy two years for Steven Sussman, who took over as CEO in 2015. A veteran of 20 years, since taking the top job he has expanded both its product suite and the range of services it offers clients in what has been a gentle overhaul of the company, which has roots dating back to 1945.

A rebranding has also been quietly taking place this year as JM Finn gears up for Mifid II and beyond.

‘The rebrand is very exciting for us as we’re one of those firms under the radar.We dropped the “& Co” from our name, which reflects our evolution. The feeling was we that wanted it to be a statement of the new and a broadening of our offering. It’s evolution, not revolution,’ Sussman says.

‘We are proud of our technology and have invested heavily in it – not just our client portal, but also our client library where they can store their statements and contract notes so all of their paperwork is available – we think it is a very valuable service.’

The company has also put considerable effort into being Mifid II-ready ahead of the regulation coming into force in the new year, in what has been an 18-month project.

The wealth manager carried out its own transaction review a year ago and brought in Deloitte as consultants to help ensure it is on track.

Sussman admits that, like most companies, JM Finn is ‘reliant on third party system development’ to an extent, but come January he is confident the firm will be fully prepared, saying companies need to treat the exercise as a positive, rather than sitting on their hands complaining about the workload.

‘We’ve been doing Mifid II preparation for 18 months and carried out our own transaction review a year ago. There have been a lot of system tests over the last few months. We will meet the requirements to the best of our abilities and treat it as a positive – the regulation will deter market abuse and increase transparency,’ he says.

‘You need to embrace regulation. It does take a huge amount of management time, but we are moving to an era of data protection, Mifid II and constant reviews. The industry has to be up to speed with it and we’ve seen it as a very important part of the business, and part of our evolution.’

Part of this evolution under his tenure has also been the broadening of the proposition to include financial planning. The company hired Anna Murdock from UBS as head of wealth planning in late 2015. With the hire of chartered financial planner Simon Wong from Chase de Vere the following year and the addition of a paraplanner and an assistant, the team is now four-strong, but Sussman says this will continue to grow over the coming years.

‘We wanted to provide an additional service to our clients. It’s not about just bolting on another source of revenue, but about delivering outcomes, helping clients with their inheritance tax (IHT) and estate planning,’ he says.

‘We will grow the team; within a five-year period, we will budget to have a financial planner in each [of our five offices] and probably double the size of the team in London.

‘Some say we came late to the party, but it’s about what service we can give clients, not what we can sell them. The investment manager will mention whether they require financial planning to clients and if they want to talk about say estate planning. Sometimes they bring them in for a chat.’

He adds: ‘It was never developed to be a massive profit stream in its own right, it was developed as a support and is important in the modern world. There is a lot of work on pension consolidation and Sipps have been a big driver there.’

The advice proposition is an addition to JM Finn’s traditional wealth management services, which have also been broadened under Sussman’s tenure.

The firm launched a managed portfolio service (MPS) last year, headed by intermediary solutions director Michael Mount, targeted at the intermediary market. This sits alongside its existing tailored platform solution (TPS), which as the name suggests, is a bespoke proposition, which advisers can tailor to meet their clients’ individual objectives and risk profiles. Beneath this it also has an offering for smaller clients, Coleman Street Investments.

‘TPS is a differentiator, MPS is a market product. With TPS, the IFA chooses the asset allocation, the risk profile and it is risk-mapped. The MPS is much more standard,’ he says.

‘We also offer intermediaries a unitised IHT portfolio, so we have the full gamut of services. It’s a very specialised service, so we insist clients take advice either through our financial planners or their own.’

With a refreshed brand and full suite of services, Sussman says JM Finn is ready to fly out from under the radar, saying it is ‘time to feed the engine’. But as has been in keeping with the company’s history, this will be done at a measured pace. The firm now has £9 billion in assets under management and advice, with client sizes ranging from £100,000 to £30 million. He says that organic growth has been the key driver. However, that is not to say that acquisitions are off the cards, as Sussman is keen to stress the attractiveness of the company as a parent, given its stability, being 80% owned by Belgian firm Delen, with no borrowings or fixed debt.

‘We don’t really advertise as such – our clients are our biggest source of referrals. We set about organic growth – it may be slow, but it is sure, strong growth. The secondary growth path is attracting high quality investment managers and the third is the acquisition of another firm,’ he says.

‘We haven’t done that yet and we’d need to be comfortable with it. If there was an opportunity to take an established office in say Manchester, we’d look at it. We don’t just look at a region and say we need to be there though.

‘The market is in a state of flux. People are talking constantly – they talk to us and we talk to them. We are very picky though. The concept is to improve and be a highly successful quality business. We are not a pile them high firm.’ 

JM Finn has sponsored the Royal Academy of Arts since 2012 with chief executive Steven Sussman describing the tie-up as a great way of interacting with clients as well as attracting new ones.

‘For us it’s the right association and for our clients it’s what they want,’ he says.

‘We did a client survey in 2015, asking them what they like. The main things that came through were art, food and gardening. Of course, people like sports – but not as much as they used to.’

JM Finn also hosted an in-house exhibition with the Royal Academy this year, where up-and-coming artists displayed their work in the wealth manager’s office. Clients were invited along and could buy it to help fund the artists’ degrees.

The Royal Academy’s summer exhibition has become a big fixture on the wealth manager’s calendar with 700 guests attending this year.

‘When we first did the summer exhibition we were going to invite 400 clients, but it went up to 700 and we found that having a larger event had a big impact- people saw people they knew there who they didn’t know were clients and there was a real buzz,’ he says.

‘The client experience is not just about being a client and being able to meet the investment managers and come to our events and speak to them, but being part of the family – we feel this is a differentiator.’

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Profile: JM Finn on why the future is with financial planners

Profile: JM Finn on why the future is with financial planners

There is a lot of work on pension consolidation and Sipps have been a big driver there, says JM Finn chief executive

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