latest Content

Building our client base: Why we’re targeting 30-40 year olds

Four years after setting up Banks Wealth Management, director Steve Danson talks to Fiona Bond about the company’s push to increase its turnover, being part of the GrowthAccelerator scheme and why he believes advisers should offer simplified advice to a younger market

The firm has six staff: two financial planners (Danson is Chartered) a mortgage consultant, a paraplanner, administrator and office manager.

Adviser Business Review: Since starting the business, how has your target client base evolved?

Steve Danson: We currently have just over 300 active clients, of which around three quarters are over the age of 50. Since starting the business in 2011, we have primarily focused on investment into pensions, but we are looking to increase our share of the 30-40 year old age group. Some advisers may shy away from clients in their 30s, on the basis that they are unlikely to be the most lucrative, but I think of it from a long-term perspective – accumulating wealth and with it, a growing need for financial planning. That’s why I developed a mortgage department three years ago as I felt it’s important to bring younger clients into the business and create more opportunities for us.

ABR: How do you go about building your client base?

SD: I was fortunate that I was able to bring a number of clients with me from my previous business, but continuing to grow my client base and the company’s turnover is a priority. I have been working with a PR firm since 2011 because it was important to me that Banks Wealth Management didn’t appear to prospective clients to be a new start-up. I’ve been working in financial services for many years, and set up my previous company in 1999, so I had the experience to know what I was doing and I wanted that message conveyed to the public.

We have sponsored local events, such as the Clitheroe Food Festival and Lancashire Sports Awards. We also advertise in local paper Lancashire Life and have registered on Unbiased and Vouchedfor. While it’s difficult to know exactly how effective they each are, I really believe it’s about getting our name out there and it’s nice for our existing clients to see us mentioned in different places. We also use two accountants and one solicitor for referrals.

ABR: How did you set your fee structure?

SD: I looked at my competitors and what would be feasible for me to run as a business. My fee structure is percentage based and tiered – initial charges are up to 3%, with the average around 2%, and ongoing services are charged at up to 1%, again depending on the client. We don’t charge for our initial meeting, instead we use it as a chance to discuss what the client is looking for and run through our services and charges.

ABR: What were the biggest challenges in setting up your own business?

SD: There are so many challenges you have to overcome as a business owner! The issue of recruitment is a difficult one; not only attracting people to your business but setting out your stall – knowing the right salary to offer, benefits etc. You need to make sure you keep on top of regulation and the compliance that comes with it. We are part of the network, Tenet Connect, which has been a huge help. While it might not work for everyone, it’s been very useful for us to have that support. I would also say choosing the right back office system can be a challenge – I’m yet to find one I think is absolutely perfect but it’s all about trial and error and finding one to suit your needs.

As a business owner, there’s always the worry you could become complacent, as you don’t have someone else telling you what you should and shouldn’t be doing. For that reason, we signed up to the government-funded GrowthAccelerator scheme last year and brought on a business mentor as part of that growth drive.

ABR: What impact has a business mentor had on your firm?

SD: My mentor, Rachel Mallett, has been fantastic in helping me to think outside my role in the business and look at the bigger picture. As part of the GrowthAccelerator scheme, we put in place a three-year business plan and Rachel ensures that we stick to it. She comes in every three months and I have to provide her with a review of the business and what I’ve achieved over those months. Knowing she will ask me questions and expect me to have met certain goals keeps me focused. While it may not be everyone’s cup of tea, I think it’s been a very worthwhile investment for me and the business.

ABR: How will you look to grow the business over the next five years?

SD: As a business, I am focused on increasing our turnover and incurring income stream. Our turnover is currently at £450,000 and we expect to reach £600,000 over the next 12-18 months. Ideally, over the next five years I will hit the £1 million mark, and would be happy if recurring income were around £700,000. We currently have £38 million in assets under management and I’m hoping that figure will increase to £45 million by the end of the year.

In order to help me grow the business, I took on another adviser last year and have just taken on an apprentice, whom I will train to be a qualified mortgage and protection adviser. For me, it makes sense to hire someone younger than myself who can carry on the business after me. We have the capacity to take on new business and I hope that our efforts will see many new clients come on over the next few years.

The role of an adviser has changed so much over the years. Previously it was all about sales and while that element is still undoubtedly important, the advice market has become much more technical and advisers are now expected to have a different skill set. I think encouraging fresh blood to come into the industry and appeal to a wider audience is the way forward.

ABR: What do you see as the biggest opportunity for advisers?

SD: I think there’s a real opportunity to offer a younger generation simplified advice. There is a lack of advice for people of a certain age and a certain financial position, because it’s not deemed lucrative enough. Due to the regulatory demands, it is very difficult to offer guidance to people without going through the usual fact finding processes.

It would be great if the market evolved to a place where one of my staff would be able to sit down with clients and offer them advice over the space of a few hours at an affordable rate. Right now it would be impossible for me to do that because the costs of due diligence and so forth would outweigh the fees you would receive for that piece of transactional work. I think banks will eventually tap into this, but it would be a real shame for smaller businesses like mine to miss out.

Visit  Banks Wealth Management website

More Articles Like This