Adviser profile: Anna Sofat of Addidi Wealth

Anna Sofat of Addidi Wealth is helping to shape a brighter financial future for women by helping them realise the power in their pounds

‘We can’t go back and change the past but we can shape the future. Imagine a financial services industry that is not about sales, and isn’t full of jargon or riddled with complex and opaque products.’

This is how Anna Sofat, managing director of London-based Addidi Wealth, began her speech in the Ladies’ Smoking Room at the St Pancras Renaissance Hotel earlier this month. The occasion: Addidi’s 10th anniversary and the launch of a new campaign, Voice of Women’s Wealth.

‘As we look forward to the Voice of Women’s Wealth, we are redefining the culture of wealth,’ Sofat continued. ‘As women who will control more than 50% of investable assets by 2020, we can demand this industry, our industry (which has the biggest pay gap in this country), we can all demand that it doesn’t have to be business as usual.’

Speaking to Sofat the next day at her Euston offices, she tells me the new campaign has two strands: to change the culture of wealth, and talk about how women can use wealth. Women are becoming wealthier, and, says Sofat, with increased wealth will come more power.

‘Money and power are so interlinked and I don’t think at the moment the vast majority of [women] think we are powerful really,’ she says. ‘We just celebrated 100 years of women getting the vote; those women were determined, some of them went to jail for our rights, what do we want the world to look like in another 100 years?’

She uses a similar ‘big picture’ thinking when dealing with her clients at Addidi. Her best financial planning question is asking clients how they would live their life if they had a magic wand.

This allows their imaginations to extend beyond to the confines of their lives. ‘If I ask them what they would change if money was no object they don’t tend to change a lot – maybe take a few more holidays,’ she says. ‘But if you have a magic wand and can wave away health issues or awful friends and families; that gives them the freedom to dream in a different way.’

‘We can’t go back and change the past but we can shape the future. Imagine a financial services industry that is not about sales, and isn’t full of jargon or riddled with complex and opaque products.’

This is how Anna Sofat, managing director of London-based Addidi Wealth, began her speech in the Ladies’ Smoking Room at the St Pancras Renaissance Hotel earlier this month. The occasion: Addidi’s 10th anniversary and the launch of a new campaign, Voice of Women’s Wealth.

‘As we look forward to the Voice of Women’s Wealth, we are redefining the culture of wealth,’ Sofat continued. ‘As women who will control more than 50% of investable assets by 2020, we can demand this industry, our industry (which has the biggest pay gap in this country), we can all demand that it doesn’t have to be business as usual.’

Speaking to Sofat the next day at her Euston offices, she tells me the new campaign has two strands: to change the culture of wealth, and talk about how women can use wealth. Women are becoming wealthier, and, says Sofat, with increased wealth will come more power.

‘Money and power are so interlinked and I don’t think at the moment the vast majority of [women] think we are powerful really,’ she says. ‘We just celebrated 100 years of women getting the vote; those women were determined, some of them went to jail for our rights, what do we want the world to look like in another 100 years?’

She uses a similar ‘big picture’ thinking when dealing with her clients at Addidi. Her best financial planning question is asking clients how they would live their life if they had a magic wand.

This allows their imaginations to extend beyond to the confines of their lives. ‘If I ask them what they would change if money was no object they don’t tend to change a lot – maybe take a few more holidays,’ she says. ‘But if you have a magic wand and can wave away health issues or awful friends and families; that gives them the freedom to dream in a different way.’

Looking ahead

Addidi’s client numbers have steadily increased since the firm was last profiled by New Model Adviser® in 2012 (from 186 in the year of the London Olympics to 250 by 2019).

The business has been growing organically, although Sofat says it did consider an acquisition last year. ‘We weren’t actively looking but a conversation started,’ she says.

However, nothing came of it. ‘With the sheer amount of time and energy, never mind the money, needed to integrate two businesses and two cultures, I think I’m better off spending that getting more clients and growing the business,’ she says.

Sofat has no intention to sell, despite having people ‘always ringing up’. She says husband Janardan Sofat, who heads up operations at Addidi, will sometimes take the calls simply as a benchmarking exercise, to see whether the business is in fact fit for sale.

Instead, Sofat’s succession plans involve her transitioning to a less hands-on role in the business, and positioning herself as a figurehead for women’s issues. ‘I want to develop a business model where staff can have a stake in the business, maybe even clients can have a say in the business, and probably a small charitable side to it. I don’t know if I will keep anything or not, we’ll see, but the idea is basically to take it forward to the next generation.’

A good fit

Other changes since the last profile include an office move from Chandos Place (near Trafalgar Square) a mile or so up the road to Euston; the introduction of ethical portfolios that mirror the firm’s core model portfolios [read more about this in Cover Star Extra next week] and taking on more staff (she will have 13 by next year).

Zoe Dagless has been trained in house and is now a chartered financial planner at the firm, with client care manager Sasha Mitchell, who joined in September 2017, ‘hot on her heels’. Marketing executive Hannah Thorp, who joined in July, was recruited through LinkedIn, but Sofat says other recruitment strategies have not been as successful.

‘We have paid way more recruitment fees than I would like to recall,’ she says. ‘There are head hunter-type businesses that work with bigger business but are expensive for smaller businesses, and then the middle-ground recruitment companies where the quality varies – we’ve tried both.’

She says the firm takes a long-term view on recruitment, for example, it would most likely take on a good paraplanner or adviser at any time if one came along. ‘It’s really hard to find good, well-qualified, rounded people,’ she says.

To combat this lack of ‘good people’ in the profession, Sofat has yet another plan on the horizon: the Addidi School. This would provide a complete financial planning training course and a training course for existing advisers.

Sofat says, as professional standards have risen (which is a good thing) the choice of financial planners has narrowed. She says this is because the sheer number of advisers has reduced, and because things such as holistic planning, really getting to know clients, takes more time. ‘There are only so many people you can look after if you really have that one-to-one relationship,’ she says.

As a result, some levels of clients are pushed out of this space – something the school will attempt to combat. It will also serve as a way for advisers to meet and work with each other, and act as a way of bringing more women into the profession.

‘We need more women,’ Sofat says. ‘It’s a fantastic job for women, you can be totally flexible, and so I want to develop a flexible, agile model for women that they can control. I think women go to self-employment because of that control, so that’s the plan.’

This recognition of how women feel about control complements her thoughts on power, and her plans for Voices of Women’s Wealth. It is clear these are the driving force for all the work Sofat does.

Sofat says women often do not see themselves as powerful, ‘but collectively we are pretty powerful, and we have to use that.

‘Let’s use that magic wand to think ahead to what legacy we leave from today. Let’s get that big picture right; that’s what we as women need to do.’

The fee bit

Addidi has three stages of financial plans: the Investment Plan, which tends to focus more on assets in the main market such as pensions and investments; the Wealth Plan, which looks at all assets including businesses, property, enterprise investment scheme solutions and so on; and the Legacy Plan, which deals with families through the generations.

Clients with less than £1 million to invest are likely to be on the Investment Plan and pay the minimum planning fee of £5,000 (which would be 0.5% on a £1 million pot). Clients on Wealth Plan may pay £14,000 to £22,000, and those on the Legacy Plan up to £44,000 for complex cross-generational advice including succession, divorce and so on.

Sofat used to charge around £1,500 for planning, but raised the fees to make this a standalone service that clients can take away and implement elsewhere if they wish.

Implementation is then a further 1%, and ongoing fees tend to be a minimum of £3,000. ‘We are looking at all these fees at the moment, though, and we will probably have a mix of percentage or flat fees,’ Sofat says.

However, for someone with £100,000 to invest, the ongoing fee may be reconsidered, as Addidi will not take more than 1% from the portfolios.

‘I was speaking recently to a woman referred to us from a client who has just over £100,000,’ Sofat says. ‘She was in that middling ground where I could see she needed advice but she couldn’t afford the £5,000 up front. And there’s no way £3,000 ongoing is going to be cost-efficient; that’s 3% a year.

‘So we could reduce [the planning fee] to £3,000, charge 1% implementation and then I said maybe we need to see you every two years, or you may decide to pay a top-up fee in one year.

‘When you’re trying to be bespoke so much it can be a nightmare. So you’ve got to try to have some sort of bands and service you try to stick to.’

The investment bit...

When we last profiled Addidi Wealth, it was just about to launch its model portfolio investment proposition. Six years on Sofat says these have ‘been delivering what it says on the tin’. ‘Clients have transitioned over to them and we have moved conversations away from the ups and downs of performance to have an even more financial planning focus.

‘I think our investment proposition is a lot more consistent, smoother and delivers results for the clients.'

Addidi has three ranges of model portfolios: core, ethical and dollar, for clients who need diversification across currencies e.g. non sterling or expats. Each  are risk-rated from 0-100 with 11 portfolios for each. Having initially resisted this style of investment, Addidi now does 90% of investment work in-house, outsourcing the remaining 10% to discretionary fund manager (DFM) King & Shaxon. It tends to refer to a DFM when there are bespoke ethical mandates.

The next plan is to develop a robust ethical proposition. ‘By the end of the next five years I would hope the majority of our money is invested ethically,’ Sofat says.

Anna's CV:

2006–present: Addidi Wealth, founding director

2000–2006: Fiona Price & Partners/Destini Fiona Price, managing director

1996–2000: Jackson Batten Financial Group, business development director 

1990–1996: AJS Financial Consultants, independent financial consultant

1989: Career break for family

1985–1988: Woolwich Building Society, market analyst

1982–1985: Britannia Refined Metals, sales executive

Professional memberships and qualifications:

  • RO1&2; JO4&5, AF3, G10, SV1, G30
  • Chartered Financial Planner
  • Certified Financial Planner
  • Advanced Financial Planning Certificate
  • Financial Planning Certificate 1, 2 and 3 

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