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Jumping the fence – from compliance to advice

Paul Howard of Box Financial Planning moved from compliance to giving financial advice. He started with zero clients – this is how he grew his business

I looked at what was going on in the industry and thought to myself, surely someone could do better?”

It was this question that prompted Paul Howard to make the brave leap from working in compliance to setting up his own IFA practice in January 2014.

He explains: “My decision to jump the fence was largely driven by the way the advice industry was changing. Consolidators were eating up small businesses, raising the fees they wanted to charge but not necessarily offering a greater level of service. To my mind it felt like it was an ideal time to create a firm which would provide the quality, personalised and cost effective service to clients I really believed in.”

Box Financial Planning, based in Reading, offers a wide spectrum of services including investments and savings, pensions, insurance and mortgages to a broad range of clients throughout the Thames Valley area and beyond.

Start-up challenges

Paul boasts over 20 years of financial services experience, both in an advisory capacity and in a compliance role, but despite this, he admits that moving from compliance to running his own IFA firm was a far bigger change than he had anticipated.

He says: “Setting up the firm was actually the easiest part of the whole process, because my relevant experience in compliance and regulation meant I knew what was required of me. What I hadn’t expected was how challenging it would be to grow a client base from scratch and I certainly over-estimated what I would be able to achieve in the first year.”

Paul started the business with zero clients, and says it took between seven and eight weeks for his first client to join.

He says: “My advice to anyone starting out would be to have a solid idea of where you expect to find business or indeed bring clients with you if you can. Had I known in advance how tough it would be I would have been much more proactive in the first few weeks.”

Fortunately, Paul made the decision to work for three other companies in addition to running Box Financial Planning, a move he describes as a “financial saviour” through the first year. He was appointed a self-employed adviser for one firm, and took on the role of compliance consultant for two other firms.

“It would have been incredibly difficult to survive financially if I didn’t have other sources of income,” he admits. “I over-estimated how much I would earn in the first year, so was subsequently charged higher fees by the FCA. The physical costs were much higher than I had expected and it can be a very testing time when you have no income coming in.”

Growing the client bank

However, it was a challenge Paul has seemingly risen to, having grown his client base to 150 over the past two and a half years. He acquired half his clients from an adviser who was affected by the change in qualifications as a result of RDR, and the rest through various channels including Unbiased.

He says: “I would say Unbiased has been my biggest source of new business. I joined immediately after setting up the business because I knew it was a reputable name and would be a worthwhile investment.”

Paul also went down the route of buying client leads and employed an advertising consultant for three months to help build his profile, but admitted such methods can be hit or miss.

“Buying client leads can be a real mixed bag, but I felt it was better to be doing something and get out in front of people rather than sit in an office waiting for the phone to ring. The decision to employ an advertiser was a costly mistake; in those three months I brought on no new clients yet my outgoings were rising,” he says.

From the outset, Paul has been very open to the type of client Box Financial Planning services, refusing to operate a minimum fund or income level. While he acknowledges that such an approach can lead to investing time and effort in clients who generate very little business, he says it was a natural move for a new business seeking to raise its profile and grow its client base.

“I would rather be doing a little bit of work and helping someone, than doing nothing,” he says.

Unsurprisingly for a man keen to nurture his own business, Paul has also made the decision to keep all elements of the business in-house rather than outsource.

He notes: “Of course, I don’t need to outsource compliance and I’m fortunate that I’ve been involved in research committees in previous roles so I’m able to use my own expertise rather than rely on a third party. At the moment, I’m able to look after all areas of the business comfortably.”

Future growth

That said, Paul has aspirations to grow Box Financial Planning and would like to grow his client base to 200, all requiring ongoing service.

“The dream is to grow the firm and provide ongoing service, rather than a mix of ongoing and transactional work. Of course, the more successful you become the more you can afford to tailor the business to specific needs,” he says.

Paul’s next move will be to hire a part-time administrator, and says that further down the line he would like to bring on a self-employed adviser.

Visit the Box Financial Planning website



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