This is part 8 of a series I’m calling ‘How to start a Lifestyle Financial Planning business from scratch’. If you are new here, welcome! For context, it would make sense for you to start with part 1 which can be found by clicking HERE.
Last week I explained how I got a job as a Financial Adviser for a high street bank.
So, let’s continue…
2013
After completing my Financial Adviser induction course in late 2012, it was time to get my head in the books again and study for my qualifications. 🤓📚
This seems like an appropriate juncture for me to give you a brief history of the world of regulated Financial Advice.
I went into some detail on the history of the profession in this blog, but I will summarise with an abridged version here;
Up until around 2002 anybody could call themselves a Financial Adviser. You literally needed zero experience or qualifications. They were effectively sales people, they just sold investments, life insurance and pensions, instead of cars or sofas.
As many of you will know – this didn’t work out very well for the consumer. 🤦🏻♀️💷📉
Then, in 2002 the provision of financial advice became a regulated profession under the auspices of the Financial Services Authority (FSA). From that moment on, to give advice, one must be qualified. 📜
In the aftermath of the financial crisis of 2008 the FSA (now the Financial Conduct Authority – or FCA) carried out a review into the quality of financial advice in the UK. This was known as the Retail Distribution Review (RDR). As part of the new legislation, Advisers wishing to give investment advice would need to be qualified to a higher level from 2013.🧠⬆️
(The new legislation also banned commission payments on pension and investment advice – something which would have a major impact on the industry!)
I entered the world of financial advice amidst this upheaval (good timing, as ever🤦🏻♀️).
After spending the majority of January 2013 in Australia on a trip I’d had planned for a few years, I spent the next 8 months studying and observing experienced colleagues.
When the student is ready, the teacher will appear
As a brief aside, it was during this study period that I stumbled across this useful video whilst researching the taxation of investment bonds (💤). The chap in the video is called Pete Matthew, and Pete is the creator of Meaningful Money. Pete is a Financial Planner down in Cornwall (originally a Yorkshireman!) and has gone on to win numerous industry awards and accolades for providing free financial guidance via his award-winning podcast and online video’s (I highly recommend you check out the Meaningful Money podcast!).
(Disclaimer: If you click any link in this blog you will be departing from the site of Clarity Lifestyle Financial Planning. Neither Clarity Lifestyle Financial Planning nor Intrinsic are responsible for the accuracy of the information contained within the linked site).
5 years later in 2017 – when I started Clarity, I contacted Pete to see if he could share any words of wisdom and somehow, I managed to convince him to be my mentor!
Since then, Pete has been of immeasurable help to me.
(Pete has recently published his first book called ‘The Meaningful Money Handbook’ which in my view, should be mandatory reading for anyone looking to take control of their financial future! Click HERE to check it out!)
I digress…
On the 16th August 2013 I became a fully qualified Financial Adviser. 💪🏻
Transparency = Redundancy
I had the bit between my teeth and I was determined to be the best Financial Adviser I could possibly be!
But the wind was to be taken out of my sales after just 3 weeks in the job when we were summoned to a meeting and informed that the Bank had taken the decision to make the role redundant! 😳
Say whaaaaaatttt!!! 😩
You see, the implementation of the RDR meant that it wasn’t so easy to sell bucket loads of insurance and investments to folk with little justification, paperwork or audit trail anymore.
It was to become a much more labour-intensive process to meet all the regulatory expectations placed on organisations wishing to offer regulated financial advice and the new transparency rules meant that probably for the first time ever, clients actually knew what they were paying in fees and charges! 😬💷💷💷
All this meant that it wasn’t profitable for the bank to offer regulated financial advice anymore. 📊
My employer wasn’t alone – almost all banks removed their regulated financial advice offering in the coming years. ❌😳
Redundancy
Thus began another round of redundancies. Voluntary at first. 😤
On this occasion I did not elect for redundancy because I had only just started the job and so my redundancy package was rubbish, and I was saving to buy my own house too. So instead, I opted to transition into a new role where I would be known as a ‘Financial Consultant’ – which was effectively a glorified ‘insurance salesman’.
The good news was that my salary and car allowance would be protected for 2 years 👌🏻, after which I would lose the car allowance and I would have to sacrifice some salary – not that I intended to stick around for that long.
Would you like some insurance with that overdraft?
As 2013 turned to 14 I finally moved out of the house I had jointly owned with my best mate John for almost 8 years and moved into my own new build home. ☺️🏘
I had just turned 30 and I was starting to seriously think about what I wanted to do with my career, and my life for that matter.
By this point my new job at the bank was bringing me down. 😔
I was working in a deprived part of Sheffield where almost everyone who visited the bank was completely broke. My job was to sell these people insurance by the bucket load, or face being placed on a ‘Performance Improvement Plan’, or PIP. 😬
It was a tough gig!
The bank (predictably) had become convinced that insurance was the answer to all life’s problems. Of-course they did, it was a profitable business! 😐
But most of my clients were flat broke! I mean, haemorrhaging money. 😩
There were stories of colleagues that were so desperate to hit their sales targets that they were doing crazy things to get clients to agree to buy insurance. One example was a colleague who told a client that he would get a better interest rate on his loan if he took out insurance – which of course, was utter rubbish! 😳
It got to a point where every morning I would park across the road from the bank at about 8:30am and spend 10 minutes just starring at the building, dreading the day ahead. 😔
Here I was, a fully qualified and experienced Mortgage Adviser, a fully qualified Financial Adviser – selling insurance to people who simply couldn’t afford it. 😐
It was unfulfilling and frankly, unethical.
There were some rumours that by the end of 2014 the role would be made redundant (and indeed that turned out to be the case), but by February 2014 I’d had enough, and I wasn’t prepared to waste any more of my life waiting around for things that may or may not happen.
I updated my CV and started looking for a new job.
My 6 years with the bank was over.
This was the start of a completely new chapter for me, a chapter in which I became proactive rather than reactive, one in which I decided to push myself and see where I could get.
It was the beginning of a crazy 5 years for me personally.
I’ll tell you more next week…
Until next time…
If you are looking for a collaborative partner to help you and your family succeed financially, then hit me at planning@claritylfp.co.uk and let’s see if we get along!
Financial Planner | Financial Adviser | Investment Advice | Pension Advice | Insurance Advice | West Yorkshire
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