Audacious and uncompromising: Gaynor Rigby of Equilibrium Asset Management
2012–present: Equilibrium Asset Management, managing partner
2010– 2012: Equilibrium Asset Management, management consultant
2009–2011: s2pg Consulting, owner
2006–2009: Strategic Coach, director of UK business development
1994–2006: Strategic Coach, director of sales and marketing
Chartered Financial Planner
Gaynor has given us these fantastic bits of advice as her five top tips:
1. Have a plan, check it and update it each month. Keep track of money in and out and do not confuse the two.
2. Be able to say what you do and why you do it succinctly, in a minute or less.
3. Communicate clearly and regularly to both clients and staff. If you drop the ball and make a mistake, say sorry and fix it.
4. Do not hire people like you to do things you do not like to do.
5. If you want to grow your business you are going to need to make some big, ballsy moves. It will be scary.
Big, 'hairy' goals
Set big, 'hairy' goals. Smash your targets. Leave work on time. These are among the rules by which Gaynor Rigby, managing partner at Equilibrium Asset Management, has led a rip-roaring growth transition since she joined the firm in 2010.
As it happens that was the same year Equilibrium last appeared on New Model Adviser®’s cover, but the firm has since undergone a transformation.
Back then, the focus was on founder and managing partner, Colin Lawson. But Lawson has since handed responsibility to Rigby for leading the firm’s expansion, while he focuses on idea generation as well as meeting and acquiring clients.
Lawson has credited Rigby for the huge jump in the company’s assets under advice from £160 million in 2010 to more than £715 million now. But Rigby is just getting going, and recently set an audacious new target of £4 billion by 2021. Rigby joining also led to an exciting transition outside the office. The pair quickly became an item and married in 2014.
Two heads are better than one
Rigby joined initially as a consultant, but soon became full time. She had strong credentials having previously worked at Strategic Coach in Canada and run her own consultancy firm.
After talking to all the staff, one of Rigby’s first moves was to replace the firm’s complicated holiday package, which fostered a culture of long hours, with a simple allowance.
Rigby also formulated more structured systems, processes and expectations for employees, while encouraging them to voice their opinions.
The new culture led to some staff leaving, and the hardest part was selling the new approach to the remainder, she adds. 'It was a big leap for those who stayed, but the culture is embedded now.'
'Working with the person you are married to is exciting.'
Rigby introduced aggressive asset win targets.
'Having to report on their activities weekly increased competitiveness, and we blitzed our targets,' Rigby says. She also worked with fellow partner Debbie Jukes to grow the marketing team from one intern to six people.
Another big change the firm has undergone is that it started offering advice on defined benefit (DB) pension transfers last year. Rigby accepts it is a controversial area. The high-stakes nature of the advice has entered the national debate as a result of poor practices experienced by some members of the distressed British Steel Pension Scheme recently.
'You have to make the big move, spend money, and it can be scary.'
The result was a four-stage process for DB transfers, which Lawson (pictured) says is one of the most thorough and informative available.
1. Assessing transfer suitability. This includes investment knowledge, risk appetite and tendency to budget carefully or overspend. Also health, other assets, income streams and many other factors.
2. Scheme analysis. Reviewing the scheme and the generosity or otherwise of the transfer value. Calculating the returns a client will need to not run out of money, even if they live to 105.
3. Lifetime cashflow modelling. This includes all assets and sources of income such as the state pension. Creating two models to demonstrate the effect of staying in the scheme and of transferring out.
4. Recommendation. A panel of experts reviews the first three reports to decide if a transfer is in individual’s best interests.
At each stage Equilibrium grades suitability as high, medium or low. Transferees go into an ongoing investment management service that is designed to ensure they stay on track regardless of what the economy or life throws at them.
'We didn’t start until we were convinced we had a cast-iron approach. We sat with our compliance team; we met with Nucleus [the platform]; and we looked at all the elements to create a clear, robust process.'
Equilibrium has also been nurturing links with universities, and in 2015 launched a graduate scheme. This has seven participants so far, including three who have already completed the programme.
In 2016, it appointed Sarah Warburton as head of culture, which encompasses human resources.
Warburton also leads the so-called 'Spirit Team', which gets a budget to spend on ‘office fun’.
This ranges from advent calendars to 'house' competitions such as ‘best Christmas desk decoration’. The firm shares these events on social media so potential candidates get the feeling of a fun company to work for.
Employees also receive a range of benefits, including options from a scheme called perkbox, and a bonus based on personal contribution and overall revenue targets.
All these initiatives helped Equilibrium come an impressive fifth place in the Sunday Times Best 100 Small Companies to Work For 2017.
'[Equilibrium's] biggest challenge is it has just set an absolutely massive 10-year target. But even if it misses it, it will still be brilliant.' David Pritchard, managing director, Applewood Independent
It's a team game
The firm has a support-heavy structure, with 38 support staff and paraplanners to its seven advisers. The advisers receive salaries and bonuses based on client numbers, assets, the complexity of the work, their seniority and any other areas they add value, such as seminars and training.
Equilibrium is a limited liability partnership with five equity partners, including Rigby. These partners receive a market salary for the role, plus distributed profits according to their percentage holding.
In 2016, its share came from a net attributable assets pool of £1.5 million, according to the firm’s most recent financial statement. The 2017 statement is not yet published, but Rigby says the attributable assets were £1.7 million.
The figures Equilibrium provided for this article indicate a profit of £2.2 million in 2016 and £2.9 million in 2017. Rigby says the difference between these and the published attributable assets is that the latter are net of partners’ salaries.
'Some of the best moments come from taking chances.'
Outside work, Rigby has a personal target of visiting 80% of the world’s countries, usually ticking off three a year.
'We travel a lot, see different things that inspire us and can get excited about applying them in the business,' she says.
The latest move to embrace new ideas has been joining Genius Network, a business group promoting 'connection, contribution and collaboration.'
'I am not the same person I was eight years ago. I’ve learned much about how to read and motivate people, by understanding their fears and happiness spots. I bring the leadership, but it needs all of us with the end game in mind to succeed.'
For portfolios up to £1.25 million, Equilibrium charges 0.38% initial capped at £3,125, 1.25% implementation capped at £10,500, and 1.25% ongoing charge capped at £9,375.
For assets over £1.25 million, it charges 0.25% for initial, capped at £11,250; and implementation at 0.84% on the first £3 million, 0.5% for £3 million to £6 million, and negotiable above that.
The ongoing fee for sums over £1.25 million is 0.75% on the first £3 million and 0.25% above that. Portfolios over £6 million are quoted individually subject to a minimum of £30,000.
Fund manager fees on the new Oeics are 0.25%.Coupled with a high average funds under advice figure of around £750,000, this results in a very high (compared with other cover stars) recurring income per active client of £7,300.
Following publication of our 2010 cover star feature, Equilibrium’s ongoing fee, which was then a straight 1.5% (rather than being split between 1.25% for advice and 0.25% fund management) drew some criticism from commentators.
This fee is still higher than most cover star advisers. Rigby says they are confident they provide good value for the fees, and the firm still offers its money-back guarantee for any client who is not fully satisfied.
For the ongoing fee, clients receive as many review meetings as they need. Smaller clients tend to have one or two a year, while large clients average four.
They also receive invitations to in-house events and a range of communications, investment updates and videos explaining important changes.
The investment bit (pt.1)
In November last year, Equilibrium replaced its in-house model portfolios with proprietary open-ended investment company (Oeic) funds run in a new company called Equilibrium Investment Management. As assets grew, the firm increasingly encountered issues in running the portfolios, Rigby says, such as having to find alternatives to funds that closed to new assets. Having Oeics made these issues more manageable.
The firm’s investment team takes an active approch, and likes to make small volatility trades, which is easier to do through funds.
Some might question whether there is a conflict of interest in using proprietary funds. But Rigby does not think so.
‘When you appreciate how reactive [we were in the old models] compared to now, there is no conflict. The process is the same, it is just that being in an Oeic makes it more efficient.’
The investment bit (pt.2)
Partner and investment manager Mike Deverell says the portfolio’s overweights to Japan and Asia added value, especially as a result of its exposure to the Baillie Gifford Japanese and Schroder Asian Alpa Plus funds. The main detractor from performance was being cautious and underweight equity in 2016.
Equilibrium went restricted after the retail distribution review. It is whole of market when it comes to funds and products but uses just two investment platforms: Nucleus and Seven Investment Management.
The Financial Conduct Authority’s requirement for providing independent advice is that personal recommendations for retail investment products must be based on a fair analysis of the market. But Equilibrium does not wish to carry out further analysis beyond these two providers.
The firm says: 'While we do, on occasion, recommend products from other providers where our preferred platforms may not be suitable, this accounts for such a small proportion of our business that we believe it would be misleading to represent the firm as anything other than restricted.'
Rigby adds: 'The scope of the facilities and investments on these platforms allows us to provide our clients with a full range of holistic financial planning services including discretionary management and direct shares. We also have our own range of portfolio funds that are hosted through the Investment Fund Services Limited.'
'We still have access to the whole of market for funds, and when we told our clients about going restricted they weren’t bothered. We do not feel it is actually restricting what we do for them, so do not plan to change this.'