Fortitude Financial Planning

Financial Planning

Luck, fate and the IFP: The story of Fortitude Financial Planning

Neil and Chris were recently interviewed by Natalie Holt for an article that has been published on the Nucleus website; here’s an excerpt:

“I don’t want to get too deep too early on here, but sometimes you find yourself wondering about the role luck and fate have to play in how life turns out.

I’m thinking this as Chris Bowmer and Neil Bailey tell me that before they came together to set up Fortitude Financial Planning, they worked across the road from each other, not knowing the other existed. They were both working as IFAs, separately searching for an as yet elusive role that was both personally fulfilling and that aligned with their values. As luck (or fate) would have it, it was to be another 11 years before they were brought together in the same office to build the business they were looking for all that time.

Chris and Neil came to work together, alongside fellow Fortitude director Mark White, via separate but similar career paths. Chris came to advice via a management trainee job at Leeds Permanent building society, which went on to become part of Halifax. He went on to join an estate agency firm doing mortgage advice.

He says: “I went from being a manager in a money business to being a client-facing adviser, in the days when you were a salesman not an adviser. That taught me a lot, mainly that I was quite good at it, which rankles a little now.” By the time the housing market recession hit in 1989/90, Chris had been promoted through the company to head up a team. “I had to make a large proportion of my team redundant. I decided I never wanted to do that again – that was the most horrible experience.”

Chris went on to work for Legal & General and then started as an IFA on 1 January 1994, the first day of commission disclosure. In 2002 after being made redundant from Mazars, he set up Fortitude with Mark and Paul Herbert, who later left the business.

Meanwhile Neil started his working life as a manager in Clarks, the shoe shop chain. He rose to become an area manager but resigned when he realised the disdain among the senior management for the people he had worked alongside. He ended up at Allied Dunbar via his mortgage broker, after hearing how he could earn significantly more in a financial services firm than staying in retail.

Neil’s experience with training and development led him down the assistant manager route. Neil says: “Because I was training others, I wanted to make sure I knew more than the people I was training. I started to do all the exams before you needed to, and found out a little bit more about independent financial advice.

The more Neil learned about being an IFA, the more the idea appealed.  He became an IFA in 1992.

Despite the shift, the emphasis on sales still dominated to the point where Neil considered giving up on advice altogether. But, in the first of many interventions in the Fortitude story by the Institute of Financial Planning, Neil attended an IFP meeting where Julie Lord was speaking. The message about financial planning resonated with him, leading to him set up The Sensible Financial Planning Company with his partner and now wife Helen.

Fortitude – the ethos and the personalities

Chris and Neil continued to plug away in their separate businesses for several years. They met through their local IFP branch, which Neil ran. A home move for Neil and Helen meant their home office was no longer tenable, and at the same time Chris was looking for someone to help with the rent for the office that was well located but bigger than they needed.

Luck and fate struck again, and The Sensible Financial Planning Company moved into the Fortitude offices in Towcester in Northamptonshire. It later became a Fortitude appointed representative, as Fortitude became more financial planning-minded and given Neil’s work for the IFP running fast-track courses and training Certified Financial Planners.

The stars aligned once more when Chris and Neil attended an IFP annual conference (there it is again) and heard a US speaker called Dan Moisand who espoused the virtues of what a professional planning practice could look like. That inspired the pair to merge their two businesses over a deliberate, considered six-month process. They formally merged on 1 September 2008 (one wonders if that point their luck had run out).

Chris says: “We were growing more and more similar in the years we were in the same office. We’d had conversations with various consultants to talk about how we did things, and the 2008 merger was all about putting it together and making sure everyone did the same thing. As luck would have it, we had a year when we didn’t have anything else to do!”

Neil says that in the run-up to the merger, there was a certain amount of “testing the strength of the relationship” between Chris, Mark and himself.

Almost ten years on, and that relationship is standing the test of time.

Chris says: “Going back to our original conversations, one of the things we wanted to do was create a financial planning-only business that wasn’t about product sales. The intellectual challenge was to create a scalable financial planning business.”

Neil chips in: “Ethical, profitable and scalable.’

Chris nods. “We haven’t yet evidenced the scalable bit. But we’re working on it.”

Neil picks up the story: “Our original mission was to deliver a financial planning service to clients who value knowing how to get to where they want to be, in an environment where clients, employees and owners can all achieve their lifestyle and financial goals.

“We’ve looked at that several times in the last 10 years and we’ve never changed it. It still makes the hairs stand up on the back of my neck.”

The other mantra Fortitude lives by is to help clients feel “comfortable, confident and in control”. As Chris puts it: “What other outcomes are there?””

Please contact us if you would like to find out how we can help you to achieve that outcome.

How to avoid investment and pension scams

In the next few weeks there will be changes to the way that we send sensitive information to our clients by e-mail to reduce the risk of this data falling into the wrong hands…we will confirm those changes in due course.

In the meantime, we should all continue to be vigilant to ensure that we don’t fall prey to this ever growing risk.  Our Regulator, the Financial Conduct Authority, has published some useful guidance which can be found here.  You may believe that you are already aware of the danger signs, but we still hear horror stories about similarly savvy people who are taken in and lose money so it’s worth taking a few minutes to review the guidance.

It may surprise you that, according to Financial Fraud Action UK, 36-55 year old men are recognised as one of the most confident and assertive segments of the population but are one of the most likely age groups to lose money to fraud.

This group are shown to take risks when investing, have the ability to invest large amounts and tend to act on impulse. This increases the likelihood of them becoming a victim and then when they do so they often feel a sense of shame that results in them not reporting the fraud.

As Sergeant Phil Esterhaus (in the TV show Hill Street Blues) said as he finished up his daily roll call by bidding his officers farewell with the important advice—”Let’s be careful out there.”

 

Have you registered an LPA? You may be due a refund…

The Ministry of Justice and Office of the Public Guardian (OPG) have announced a refund scheme for those who registered a Lasting or Enduring Power of Attorney between 1 April 2013 and 31 March 2017.

The Ministry of Justice is only supposed to charge enough to cover the cost of providing the service, but the large number of applications meant it made a surplus, which it now needs to repay.

Making a claim is quick and simple using the online service which you can access here. Only one form needs to be completed for each donor (the person who made the power of attorney) and the OPG will find all Power of Attorney application fees paid by the donor during the qualifying period.

Before you start the process it would be helpful if you have the OPG’s reference number to hand (which is in the format xxxx-xxxx-xxxx).  You will also need the bank details of the account (which has to be the Donor’s) into which the refund should be paid.

Please contact us in the usual way or by completing an enquiry on our website if you are unsure what you should do or have any difficulties claiming a refund that you believe you are due.

(WHY) DON’T ALL FINANCIAL ADVISERS DO IT THIS WAY?

In September we reported that Neil Bailey had been invited to be a member of the Personal Finance Society’s Financial Planning Practitioner Panel.  We are very proud to add that Chris Bowmer and two valued clients have been involved in the publication of a new guide which you can view here.

We continually struggle to explain the value of financial planning to people who contact us wanting financial advice; after all we are rarely approached with requests for a financial plan.  Who better to convey our message than our clients?  The following are excerpts from the guide.

“Like many people I came to financial advice in mid-life, arguably far too late. In my case it was triggered by my move from secure employment status in a large multi-national to self-employment.

Being salaried and in a defined benefits pension scheme meant that I had the default assumption of the equation:

Occupational Pension + State Pension = OK

But crucially, at that time nobody asked me to define or quantify “OK” by asking the question “How much is enough?”

My first financial adviser was fairly typical. I had to do something about my pension arrangements and he recommended that I move my existing pot to his tied insurance company. The rationale was predicated on the impressive investment returns, both historically and projected forwards. That was pretty much it. From time to time he sent me statements from the insurance company, which I studiously ignored, content that my pension was “safe”. After a few years, as the regulation of financial advisers began to bite, my man decided that he’d had enough and closed his business. Naturally I was annoyed but little did I know how fortuitous an opportunity it created.

I stumbled across the newly formed Fortitude Financial Planning not long after it had been established. I met Chris Bowmer and that was the start of a very different relationship with a financial adviser, or as I now know, to be pedantically precise, a Financial Planner.

Immediately I was struck by the amount of time and interest that Chris invested in unearthing the minutiae of my life and initially I was a little cynical. At this stage, investment financial returns were not even mentioned. He fed all my answers into a computer model and, for the first time I was engaged in a Financial Planning process and discussion.

Looking at a detailed income and expenditure plan through to the age of 99 is a sobering, yet comforting, experience.

I’ve now been with Fortitude for a long time. We now have an annual meeting to update and to assess progress by re-visiting the fundamental question of “How much is enough?” I had naively thought that this must be the modern way of doing things for all such financial advisers, oops sorry – planners. But last year, being part of the Fortitude Client Group I was shocked to discover that Fortitude are members of a rare breed of advisers and were defining “Financial Planning” as a unique selling point.

Rather dubious of their claim, I asked “USP? But surely – don’t all financial advisers do it this way?” Sadly not, and hence the title of this article, “(Why) don’t all financial advisers do it this way?”

Frank Donlon, Financial Planning Client”

“A revolutionary approach

Over many years I experienced very poor service from financial advisers trying to sell me products. Only gradually did I realise there was no overall strategy tailored to my changing needs.

I was flying blind.

I discovered Financial Planning in 2004.

Thirteen years later my plan is still clear, realistic and updated regularly. I feel in control. I wish I’d had this experience 45 years ago!

Andrew Humphries, Financial Planning Client”

Contact us if you would like to discover financial planning for yourself – if not now, when?

Too many highlights to mention…

We’re back at our desks after a fabulous 5 1/2 weeks and over 2,700 miles touring Spain and Portugal….we’re sure you won’t be interested in a blow by blow travelogue so here are some of the highlights:

The scenery in the Picos de Europa was breathtakingly beautiful and the roads virtually empty (other than some cattle being walked down to winter pasture and wild horses).

The Muga winery in Haro, Rioja was fascinating; not a stainless steel vat in sight because they continue to use entirely traditional methods (which includes the separation of 400 egg whites from their yolks to clarify each vat by hand and a cooperage where the coopers travel annually to France to select the trees that will be felled, transported to Haro for seasoning so that 1,000 barrels can be crafted by hand every year, each one taking 6 hours).

The Douro valley was magnigicent shrouded in Autumn colours. The many and various Ports that we tasted were sublime and when we unpacked we found we had purchased enough supplies to last us a while!

The Portuguese were incredibly hospitable and friendly, though their architecture of the last 50 or so years is unlikely to win any prizes and they really need to find dimmer switches for their bars and restaurants!

We did have one very sobering day when we drove for over 5 hours through the area that was devastated by wildfires just 10 days previously; thankfully few dwellings appeared to have been damaged even when gardens, hedges and trees were completely destroyed however the damage was chilling and we were too shellshocked to take photos.

We would not have had the confidence to take such a long break without our financial plan showing us that we can start living our dream (even on a part-time basis) now without compromising our future life (which we call the Life/Life Balance TM).

Now we will start to plan our next trip….Neil and Helen

Are you having a ‘Wow’ or ‘Now What’ moment?

We believe we do not have the right to talk about our clients’ money until we have an understanding about what that money needs to do for them in order for them to be able to live the life they want; both now and in the future.

Only then can we help our clients build their financial plan.

Plans evolve over time; so our process is designed to provide ‘clarity’, ‘confidence’ and ‘peace of mind’ around the decisions that need to be made.  We aim to put our clients in control of fulfilling their plan.  One client recently said this has given him a “real sense of freedom”.

Most clients have worked hard for many years; building up assets, paying down liabilities, enjoying their lifestyle now while being diligent about planning for their future.  There comes a time where we say to our client “You can now choose to stop paid work”, in other words they are no longer dependent on earning money to live out their life goals. They can begin the next phase of their lives knowing they are financially independent!

This is a ‘wow’ moment for some…a ‘now what’ for others.  It can be a scary – but it doesn’t have to be.  With the right support and ‘tools’ in place our clients can continue to enjoy clarity, confidence and peace of mind knowing what their next phase of life looks like.

We want our clients to fulfil their dreams and desires.  We want them to live out their purpose.

We understand that clients do have their ‘now what?’ moments so we coach them throughout every stage of their journey.  Understanding what our client is living for and helping them achieve it is the foundation of the Fortitude Way.

What’s important to you? What are your values? What are you living for? What will your life look like when you become ‘financially independent’?

Come and talk to us and we can discover the answers to these questions together.

Richard

A new initiative focused on good practice

The Personal Finance Society (PFS) has established a new Financial Planning Practitioner Panel to help with the vision of “protecting the public by guiding the profession”.

The panel of experienced financial planners, which includes Fortitude director Neil Bailey, will be advising the PFS as it broadens its programme of continuous professional development (CPD) resources to incorporate inspirational financial planning good practice.

Society President and Panel Chair, Sharon Sutton commented: “We are honoured to have such a distinguished and passionate group of individuals who are willing to share what they have learned for the benefit of the wider profession.”

Neil commented: “It is a privilege to be involved with this project.  Hopefully, by learning from the collective experience of this group, many more advisers will adopt some of the tools and techniques that contribute to good financial planning practice.  This will be a win/win for the both adviser and their clients.”

You can be extravagant …

I recently heard the statement “I’m happy to spend extravagantly on things I enjoy but I hate waste” …this got me thinking…

Our clients often spend large amounts of money on family holidays, cars, extending and decorating their homes; as well as gifting monies and funding charitable activities across the world.  Is this ‘waste’…or ‘extravagance’?

The Oxford English Dictionary defines ‘waste’ as use or expend carelessly, extravagantly, or to no purpose”.  Waste speaks of squandering, frittering away, misspending, misusing and spending recklessly.

The Oxford English Dictionary definition of extravagance is very similar, “a lack of restraint in spending money or using resources”. In this definition extravagance speaks of lack of thrift, improvidence, wastefulness, and squandering.

It’s clear from these definitions that the compilers of the Oxford English Dictionary perceive ‘waste’ and ‘extravagance’ as being interchangeable.

Luckily the Cambridge Dictionary compilers seem to be a little bit more laid back.  Their more congenial definitions of extravagance include “something expensive that you buy even though you do not need it” and “behaviour in which you spend more money than you need to.”

When we meet our clients we have rich and meaningful conversations about their specific goals and objectives.

Our clients spend time and energy working hard and accumulating capital, so why shouldn’t they be extravagant from time to time when it comes to the things that are important to them?  After all they have a plan so they know they can afford it!

Do you really want to leave this planet with ‘too much money’ and your ‘financial bucket’ overflowing?

Isn’t it better to manage your “financial bucket”, avoiding waste, so that you can use your wealth to do the things that are important to you; including being extravagant from time to time?

Richard

Wow…it’s been 15 years!

When I look back 15 years since the launch of the original Fortitude Financial Planning, I am amazed and proud of the business we have built.

It was a sunny day in August 2002.  Mark and I met (with Paul who has since departed) to discuss establishing our own business.  We were excited as to what we could achieve but also apprehensive.

At the time, my wife and I had a young family with 2 children (my youngest was only 3 months old).  Davina suggested that me wanting to leave employment with an Accountancy firm, giving up a ‘secure’ salary, was very risky.  Nevertheless we took the plunge ….only time would tell whether or not it was the right decision.

In those days commission was the standard payment method for almost all Independent Financial Adviser (IFA) businesses, necessitating the sale of a financial product. Some would argue this encouraged the mis-selling scandals with which we are all familiar.  Businesses that charged fees were rare.

IFAs, however, were able to provide significant value to their clients in the days when internet capability was limited and the choice of products and providers was extensive. We probably all find it difficult to recollect the days when we did not have access to a world of information at the touch of a button.

My sons are now both over 6 feet tall; Luke, a typical teenager stuck in his room with GCSEs on the near horizon and Daniel, an uncertain semi-adult looking at A levels and university with increasing trepidation.

There have been other huge changes over that long period.  It is only in looking back that we can really appreciate the world we then lived in:

  • A new Blackberry phone cost £250 (about the same as the iPhone introduced in 2007)
  • Blockbuster (Video Rental) was a $5.5bn business
  • A basic computer cost £1,500
  • People used internet cafes
  • A pint of beer cost £2.00
  • The FTSE 100 stood at 3940
  • The £ sterling bought $1.60
  • Nobody had access to the internet in their pocket 24/7

The big things that stand out to me on this list are inflation and investments; inflation has averaged 2.9% p.a. (so the £2.00 pint should now cost £3.08) but the FTSE has risen by an average of 5.2% p.a. (including dividends) despite several much publicised falls (including 20% in 2002, 40% in 2007/08, 15% in 2010, 2011 and 2015).

When we met Neil and Helen (in 2005) they had already been running a “new model” fee based Financial Planning business since 1997.  From them we learned the many ways clients can benefit from a comprehensive Financial Planning process.  This motivated me to attain my Certified Financial PlannerTM (CFPTM) qualification in 2006. It was a big challenge, but one that gave me some real “lightbulb moments” – in particular the power of Lifetime Cashflow models. As a result we made fundamental changes to the way that we work.

Fortitude has continued to move forwards, always striving to deliver better outcomes for our clients.  We now have 10 team members and have increased the number of clients that we look after.  We aim to deliver great financial planning to every one of our clients, each and every time.

Our clients tell us that the value we provide is helping them to feel comfortable and in control; confident that they have ‘enough’  to live the life they want today and in the future.

As for me and my family, we are really pleased we made the leap and we’ve rarely looked back.  I have a desire to help people and it is in Financial Planning that I can live out my purpose.

Chris

We welcome Paul to our team

We are delighted to welcome Paul Roberts to our Client Support Team as a Trainee Paraplanner.

Paul has just graduated from the University of Northampton with a BSc in Banking & Financial Planning.

When asked why he decided to accept the role Paul said “To be honest, it was the people here and their aura that really stood out to me. I didn’t get that feeling that most people get when you walk into other corporate financial organisations, which shadows over you and puts you off immediately. Instead I got a warm friendly feeling, and felt that their intentions were pure and clear, in that they provide honest and trustworthy advice and support to each individual client.”

As this is Paul’s first “proper” job we are excited to have a blank canvas so that we can train him in The Fortitude Way.

This is our first experience of recruiting a graduate and we are all trying to remember our first experiences in an office so that we can make Paul’s journey to being a Paraplanner successful and enjoyable; this is easier for some of us than others!

Outside of work Paul tells us that he enjoys outdoor activities including mountain biking and rock climbing, which is good as he will be cycling to us from Towcester until he passes his driving test.