RockWealth Cheltenham is pleased to announce a new addition to the team — financial planner DAN BODEN. Dan arrives from Ermin Fosse in Cirencester, where he worked for seven years. Here he explains to ROBIN POWELL why he’s made the move and why, in his experience, financial planning is such a valuable service.
RP: What attracted you to the idea of working with RockWealth?
DB: I’ve known (RockWealth’s founding partner) Tim Horrocks for a good few years and we’ve kept in touch, so I’ve kept abreast of what RockWealth has been doing and the direction that the firm has been going in. It has always been a firm that I’ve held in high esteem. When I was looking to move on from my last job (at Ermin Fosse in Cirencester), and I spoke with Tim and (his fellow partner) Mark, the key thing for me was that we share the same values. We share the same ideas about the direction the industry should be heading in and about how the job should be done. That was the main reason why I decided to join.
What is it about financial planning that you enjoy so much?
It’s a professional career and the sky’s the limit, really, with how far you want to take things. There are opportunities to specialise in different areas. It also involves a lot of problem solving. From the outside looking in, those were the things that I thought would suit me well. Ultimately, I’m a people-person, and I think that’s a good place to start from. I get to speak to a lot of interesting people, which is hugely rewarding, and there’s scope to be entrepreneurial as well. The industry is quite challenging and it’s always changing, so you need to have the desire and the determination to keep your knowledge up to date. But, more than anything, what I like most about it is that you are genuinely making a difference to people’s lives. There aren’t many jobs where you can say that, and I think that’s incredibly powerful.
How would you summarise the benefits of hiring a financial planner?
Many people haven’t had exposure to financial planning. For people who are working with a planner for the first time, just getting organised can be quite transformative. And formulating a plan is very helpful for people too. For me, the real benefit of financial planning is that it provides people with confidence and with the reassurance that their financial future is secure. As a result, it can relieve stress and anxiety, and allow people to focus on what’s important to them. It means they can enjoy doing whatever they want to with their time, whether that’s being with family or friends, enjoying hobbies or travelling, safe in the knowledge that the financial area of their lives is taken care of.
What are the skills and attributes that make a really good financial planner?
I think, first and foremost, it’s about being empathetic and a good listener. Effective listening is a very difficult skill to master. Secondly, you need to be a perennial student. As I mentioned before, the industry is always changing, and there are always opportunities to update your knowledge. I think it’s beholden on us to update our knowledge, so we’re giving the best service to our clients. You’ve therefore got to have the will and desire to keep on learning and keep on pushing yourself. Thirdly, you need to be inquisitive and naturally curious: that helps you to ask the right questions and not to take things at face value. Clients pay us good money for answers and it’s vital that we give them the right ones.
Evidence-based investing is a big part of RockWealth’s philosophy. What are your views on EBI?
The shift towards evidence-based investing is a natural evolution within our industry. The outsourcing of model portfolios has been transformative because it has made financial planners face up to the fact that they’re not investment managers. Planners should focus on the financial planning aspect and leave investment management to those who have that expertise. The main benefit of EBI is the huge cost saving, but it also helps planners and their clients to focus on what they can actually control. It’s about not having to rely on hunches or guesswork, and it’s about leaving as little as possible to chance. All of those things combined lead to better outcomes for clients in the long term.
RockWealth is very enthusiastic about ESG and sustainable investing. What are your thoughts on that?
I think it’s a great thing, both for clients and for society as a whole, that ESG investing is becoming more popular. Because it’s still fairly new, we don’t have enough data to draw firm conclusions on long-term returns, but the evidence so far suggests there should be little or no drag in performance from tilting your portfolio to ESG. That’s encouraging to clients. Also, of course, the focus on ESG is applying pressure on companies to improve their practices, to become more environmentally friendly, and to make themselves better places for their employees to work. So I think it’s a very positive thing. I’m glad that RockWealth is so passionate about it, and also that we walk the walk on climate change. RockWealth Cheltenham is now carbon-neutral, so we practise what we preach.
RockWealth has a fixed-fee charging structure. Why is that preferable to the percentage fees that most advisers charge?
I think it’s imperative that clients receive value for money. With fixed fees, advisers are more accountable for their ongoing remuneration, and, in the long term, it can work out very much cheaper for clients. Again, it’s all about delivering better outcomes. Essentially, because it leaves more money in clients’ portfolios, it should lead to higher returns in the long run, all things being equal. Clients like to see exactly what they’re paying — and exactly what they’re getting for those fees as well.
Finally, the last 18 months or so have been very challenging for most of us, for obvious reasons. From an investing and personal finance point of view, what are the main lessons to learn from the experience?
The most important lesson is simply to expect the unexpected. Any robust financial plan should be based on solid foundations. That means getting the basics right, having a good emergency fund (and typically that’s six months of an individual’s outgoings, or a family’s outgoings) and ensuring you have adequate protection policies in place. We know that markets will suffer downturns from time to time; it’s how we react to those events which determines how positive our investment experience will be. The volatility we saw in 2020 provided us with yet another reminder to avoid any rash moves that may lead to poor outcomes. And that’s an important part of our job as financial planners: to educate people to make better decisions.
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