BR Guide FINAL 20 Feb

73 72 WORKING WITH PROFESSIONAL CONNECTIONS WORKING WITH PROFESSIONAL CONNECTIONS Case Studies: ADVISERS AND THEIR RELATIONSHIPS WITH LAW AND ACCOUNTANCY FIRMS Informed Financial Planning and QualitySolicitors Lockings and Bridge McFarland Separate joint ventures were established between Informed Financial Planning and QualitySolicitors Lockings and Informed Financial Planning and Bridge McFarland several years ago. In each case, the financial planning company had worked with the lawyers for a number of years, providing an opportunity to build up trust and understanding of each other’s working practices and service levels. Informed Financial Planning managing director, Kevin Ferriby saw this as a natural progression and a chance for the firm to differentiate itself from its competitors, while bringing in new business and more clients. Meanwhile, Richard Swaine, director of QualitySolicitors Lockings saw the potential to use the formal relationship to provide a wider, improved service to their clients. He also noted, "It is important to us that IFP is a chartered financial planning firm, has STEP qualifications and is a member of SIFA. This demonstrates their strong commitment to qualifications and ethics in their field.” Mr Ferriby’s view is that any financial advisers considering a joint venture with a legal or accountancy firm should: • Be patient. • Make sure they have all the decision makers on side. • Approach a firm, possibly with an entrepreneurial leaning, which has a good-sized client base they are likely to be interested in. Higgins Fairbairn Advisory LLP and Higgins Fairbairn & Co. Gianpaolo Mantini is Managing Partner at chartered financial planning firm Higgins Fairbairn Advisory LLP and recently gave us an overview of how his firm works with an accountancy firm and how that has affected the parties involved. Gianpaolo can certainly attest to the importance of being well-qualified in order to make useful connections and his story exemplifies the value in professional proficiency in all interactions with accountants and lawyers; back in 2005, he was looking to set up his own firm in financial planning and Gianpaolo’s own accountant referred him to an old friend, Fenton Higgins, a specialist in buying and selling businesses, for advice on Gianpaolo's business plan. In retrospect, he now realises that the three or four meetings the pair subsequently had were in fact a kind of interview process, as Fenton was interested in adding a financial services element to his accountancy practice. Once Fenton was happy with Gianpaolo's plans and expertise, he offered Gianpaolo the opportunity to set up a financial services arm within his accountancy firm, Higgins Fairbairn & Co., run autonomously by Gianpaolo, who gratefully accepted. This was up and running by September 2005, and eventually hived off as a separate legal entity in January 2010 when Higgins Fairbairn Advisory LLP was born as a directly FCA authorised firm. The now separate businesses continued to share offices which has proved to be useful: “I have an office next to the principal business owner and business writer on the accountancy side, so whenever a new client comes in, I'm often wheeled into the boardroom either for a quick chat, or to arrange a different, more convenient time to talk.” He goes on, “And, if I've got a client who needs new accountancy services, I will obviously recommend them if it's appropriate. It's quite useful because we are on the same page, so I often have meetings where I'm sat in with the accountant, or the accountant is brought in for a certain part of the meeting. Especially if the client owns and runs their own business, it's often very useful to have two professionals in the room, just to make sure that we're covering everything, and we're not giving conflicting advice.” Typically, the referrals from the accountants are in relation to investments, pensions and inheritance tax planning. Many of the referred clients are running trading companies and one of Gianpaolo's priorities is to protect their BR if their activity is appropriate and if possible. And while many of the long-established clients of both firms already have established relationships with accountants or financial planners, the referral path works well in both directions for new clients. Nevertheless, Gianpaolo reports that, “we typically get more clients now from referrals, sometimes from clients of the accountancy firm, rather than the accountants giving us referrals, which is what happened when we first started.” From a client perspective, the feedback is good – they like the administrative advantages that come with the partnership, such as the two entities being in a position to liaise directly regarding the client's financial and tax affairs. Gianpaolo has found that, “Whilst the accountants will be dealing with the tax returns, we can to a certain extent provide a lot of the admin support for them to collate that information, that we can just give to the accountants. Things like consolidated tax statements, we just automatically pass over to the accountants so that clients don't have to worry about it. And, if we're doing a mortgage or if we're doing some cash-flow planning, we can establish what the client's verified income is. It's useful to have that resource to hand.” Clients also like the fact that when they come to see their accountant or their financial adviser, they can access joined-up thinking across two different disciplines. In fact, to complete its offering, Higgins Fairbairn Advisory LLP has been actively seeking a legal firm to complete the advice puzzle, having previously worked closely with a legal firm. At the same time, there can sometimes be issues caused by the closeness of Higgins Fairbairn Advisory LLP and Higgins Fairbairn & Co. On occasion, clients consider them as one, which can be problematic where payments are concerned. If they've paid the accountant, clients can sometimes question further payments to the financial planners, even though they provide completely different services. In spite of this, Gianpaolo says that client servicing has benefited hugely from the arrangement which has been a great commercial success. But there are some things to bear in mind when looking to work with lawyers and accountancy firms: “You actually have to understand how their business works; how their fee structure works. You have to understand how they think. With solicitors, it's more complicated because they run as a collective of individuals, so, whilst you might do very well with one partner, if they're not doing private client work, it might not actually lead to anything formal. I think accountants are easier because people tend to go and see a lawyer when they've got a problem. With an accountant, it's an annual visit to do your tax returns and so, if the accountants are educated as to what to look for, then that can help the financial adviser or planner provide added value to the client and the relationship.” GIANPAOLO MANTINI HIGGINS FAIRBAIRN ADVISORY LLP