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Adviser Profile: Jeannie Boyle of EQ Investors

Adviser Profile: Jeannie Boyle of EQ Investors

Jeannie Boyle says EQ Investors has found the right balance of a good corporate culture while allowing staff to grow, and the ethical firm is now looking to turn hefty investment into profit.

With half a billion in assets under advice, and one of the most stylish offices I have visited, EQ Investors, based in the City of London, certainly cuts a dash within the advice profession.

The firm has an in-house discretionary fund manager, a robo-advice proposition (Simply EQ), and a growing business that is set to bring in over £5.5 million in income this year.

It can also call upon the leadership of Bestinvest founder, and current EQ chief executive John Spiers, who is undoubtedly one of the profession’s big names.

JEANNIE BOYLE CV

  • 2008-present EQ Investors, technical director and chartered financial planner
  • 2008 Herbert Scott IFA, financial planner
  • 2006-2007 MDM Associates, trainee consultant

PROFESSIONAL MEMBERSHIPS/QUALIFICATIONS

  • Chartered Financial Planner APFS
  • Advanced Personal Tax & Trust Planning
  • Advanced Pension Planning
  • Advanced Investment Planning
  • Advanced Financial Planning Process

Enterprising firm

Since buying EQ, or Truestone Asset Management as it was known prior to the buyout in late 2014, Spiers has been driving the business forward and stamping his mark on it. It goes without saying that this firm has a big story to tell.

To get the details from the front line, we spoke to director Jeannie Boyle.

The first things we discuss are EQ’s status as a certified B Corporation, and the EQ Foundation. The former is an award handed to businesses that display a serious commitment to stakeholders at large. The latter is EQ’s charitable foundation, which supports countless causes, ranging from sports days for young people with disabilities, to education for prisoners and prison staff in Africa.

Beyond this, EQ has also launched positive impact portfolios, which are now available to IFAs via the EQ discretionary fund management (DFM) service. Positive impact does not mean self-sacrifice: so far all these portfolios have met their financial objectives. ‘Everything that’s included in the portfolio is there because we expect it to perform financially,’ says Boyle. ‘There’s nothing in the portfolio that we don’t have confidence in.’

Open philosophy

EQ seems committed to encouraging a fairer society, and Boyle describes the management structure of the firm as ‘pretty flat’, with Spiers sat in an open-plan office along with the rest of the team. ‘We’re happy to listen to ideas, wherever they come from,’ says Boyle. ‘We really encourage people to come forward and tell us what they think we could be doing better as a firm, and how we can improve the client experience.’

Aptly for yoga enthusiast Boyle, this management approach involves stretching new recruits and helping them stand tall within such a large business. ‘We believe people come in to work, and they just want to do a really good job,’ she says. ‘They take pride in what they do, and are therefore capable of managing themselves.’

She says the recruiting process is fundamental to creating a positive working environment right across the business. ‘We want people who can think for themselves, rather than people who need to be told what to do. Management is here to guide and develop, rather than to monitor and check.’ You could say that this approach is flexible, but Boyle would be a better judge of that than me.

FEES

For advice, EQ has a banding structure for charging that relates to the client’s investable assets. These banding groups are up to £250,000, £250,000 to £500,000, £500,000 to £750,000, £750,000 to £1 million, and £1 million plus. Ongoing fees vary from 0.75% to 1.6%, dependent on the amount invested, the platform, and the qualifications of the adviser. Initial fees will only be charged for transfer work, and are charged at an hourly rate between £150 and £300, depending on complexity and the qualifications of the staff member carrying out the work.

For basic telephone or online advice, EQ charges on a percentage basis. For funds up to £50,000, EQ charges 0.99% ongoing for its low-cost portfolios, and 1.19% for all other portfolios. These fees shift to 0.79% and 0.99% for funds between £50,000 and £99,999, 0.69% and 0.89% for funds of £100,000 to £249,999, 0.59% and 0.79% for funds between £250,000 and £499,999, 0.49% and 0.69% for funds between £500,000 and £999,999, and 0.39% and 0.59% for funds of over £1 million.

EQ has annual management fund charges of 0.1% for the low-cost portfolios, and 0.6%-0.7% for other portfolios.

Room to grow

Boyle has personally benefited from this environment. Having joined EQ in 2008 as a junior paraplanner, she wasted no time in rising to the position of director by 2010. Upon becoming director, with technical and administrative oversight, she then became an adviser too.

‘As a firm we’re open to recognising talent and supporting people to grow and meet their potential,’ she says. ‘We’d much rather support people who are already in the business, have shown they’re committed, and have the talent to succeed.’

In line with this, Boyle tells me her most satisfying moment at EQ was when she handed over her role as head of technical consulting to 2014 Institute of Financial Planning paraplanner of the year Dan Atkinson. ‘I knew he was going to be really passionate about it and do a great job,’ she says.

The culture of the firm may have aided the 2014 Truestone buyout, which seems to have been handled well. When Spiers bought the firm, all of the staff (excluding those who left to work at Truestone Impact Investment) retained their jobs, and Spiers then strengthened the team by making several new hires. ‘I think staff and clients alike were comforted by John’s track record in financial services,’ says Boyle.

Wide-ranging but restricted

Looking under the hood at EQ’s proposition, while the firm offers corporate advice, roughly 80% of the work carried out is for private clients, who are generally referred via word of mouth or have discovered EQ through their website. The wealth of these clients ranges from £20,000 to in the region of £20 million, and EQ has different services to accommodate this: Simply EQ, financial planning, investment only and a bespoke DFM service.

Having an in-house DFM service allows for variation, though it also means the firm holds restricted status. Regardless, Boyle is confident the DFM proposition adds value for clients, and points out that EQ gets full insight into the offering and its processes. ‘We’ve got continuity, and we can make sure it’s completely right for our clients,’ she says.

Nonetheless, the restricted title has a couple of weaknesses compared with independence. Since there is no such Financial Conduct Authority definition of ‘restricted whole of market’, it can be unclear to customers what the nature of a firm’s restriction is or what obligations it has.

EQ describes itself as restricted because client investments are handled by its own DFM arm, but says it searches the whole of market for products in other respects.

Using a DFM is a service rather than a retail investment product so it is not captured by the independence rule. However, the FCA has said it expects independent firms mainly using a single DFM to use other DFMs where appropriate. While there are firms that use their own DFM arm that feel they can meet this expectation, it is an added complication and EQ has opted to adopt the restricted title, which will make life easier and less risky.

‘Our investment team can invest in anything that meets our requirements,’ says Boyle. ‘So it has to be liquid, it has to be daily traded for a model portfolio, but other than that they have no restrictions.

‘We’re a restricted business because we have our own DFM, and most of our clients seem to be very comfortable with that.’ Boyle says that the firm is, in many respects, effectively independent.

Unrestricted in-house DFM offers investment flexibility

Roughly 90% of clients are invested via EQ’s DFM offering, and these will be invested either through a bespoke portfolio, or one of EQ’s risk-rated model portfolios. EQ currently offers model portfolios for positive impact investing, best ideas (active), low cost (passive), and income. These are all risk-rated on a scale from four to 10. EQ’s discretionary fund manager is not restricted to any particular providers.

EQ used the platforms of Novia, Parmenion, Pershing and Raymond James, with the latter two being the most used. ‘They’re very flexible in terms of where you can invest,’ says Boyle. At present, EQ is using Parmenion’s risk profiling tools, but is in the process of developing its own in-house software for this.

Looking at investments more closely, Boyle points out the AXA Framlington Biotech fund, managed by Linden Thomson, as a strong performer.

Investing in the future

Besides the restricted status, there is something else to be addressed: the business has been making a loss.

The reason, Boyle says, is that EQ has invested heavily in new technology and personnel. These costs have included the outlay for EQ’s investment team, as well as the new client portal, which Boyle believes will take the client experience to the next level.

She says the business is trending back towards profitability, and believes the investment will put the business on a solid footing for the future. The key to achieving this will be to continue building assets under management at the current rate.

The client portal allows clients to see all of their investments, including any holdings that are not with EQ, alongside the fees they are paying for investment and advice. Clients can see all their investments in one place, and it provides a comprehensive balance sheet. ‘In a way it’s a big risk for us,’ says Boyle, ‘because it’s completely transparent.’

Starting point

The Simply EQ service, which is white-labelled through Parmenion and has now been available for almost two years, also warrants greater description. ‘We don’t like to think of it as robo-advice,’ says Boyle. She says most clients approach the firm over the telephone, and want to speak to an adviser before going ahead.

The impression is that the robo proposition is not currently a great money-spinner. However, the service undoubtedly has a role to play in an advice offering, and its real impact may be felt further down the line. ‘We see it as an incubator for future clients,’ Boyle says. ‘It’s not necessarily right for everybody to have a full financial planning service and for these people, Simply EQ is a good place to start.’

Big ideas

The business is moving forward at great pace, in no small part due to Spiers’ leadership and the support of a motivated, encouraged and trusted team. EQ does not carry the burden of poor internal communication or a rigid hierarchy. Boyle is an example of meritocracy in action.

EQ is not limbering up for a sale, and Spiers has in fact committed to never selling the firm, and has plans for it to eventually be 100% staff-owned. This offers continuity, and Spiers has previous form having shared equity with staff members at Bestinvest.

EQ seems aware of change, in both its progressive approach to staff, innovations in the way it interacts with clients, and offer of social impact investments.

Nobody particularly enjoys being preached at, and I get the impression EQ broadly shares that opinion. The next stretch is to return to profitability, and when that happens, EQ will hopefully become a shining example of what a large advice business can achieve.

FIVE TOP TIPS

  1. Get out and about. Do not stay in your comfort zone.
  2. Embrace technology; our new client portal is testament to that.
  3. Try to look at everything through your clients’ eyes.
  4. Employ the best staff and support them in their development.
  5. Be a good corporate citizen.

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