Like many 30-year-olds, Jo Little is enjoying the London life. She recently got engaged, and lives with her fiancé in a one-bedroom flat in East London. She enjoys dinners out, going to the cinema and watching Marie Kondo on Netflix.
But unlike many 30-year-olds, Little is also chief executive of a financial advice firm, Emery Little. She represents the third generation of Littles at the Hemel Hempstead firm, which prides itself on family values.
The original Emery Little was set up by her grandfather, Brian Little, in Wilton, Salisbury in 1971. He sold his client bank at the end of last year to consolidator AFH, enabling him to retire.
‘He was turning 80,’ Little says. ‘He and his business partner had been looking for mergers or someone to take over for some years and in the end AFH was probably the best fit they found.’
That business is completely separate from the company Jo Little is now in charge of. Little’s father, Andy Little, set up the current Hemel Hempstead business 21 years ago, first as an appointed representative of his father’s firm before becoming directly authorised.
‘But he made the decision to keep the name and the familial tie,’ Little says.
The family feel of the business is important to Little, who also has two younger brothers. But following in her father’s footsteps was not always the plan. ‘When Dad started, we had a little home office. I remember back then I used to love stamping the literature,’ she says.
‘Then during school and university holidays I would help out with the administration. I graduated from university with an industrial economics degree, which had zero relevance, in 2010, which wasn’t a great time to enter the job market.
‘So Dad asked if I would be interested in joining Emery Little full time for two years to make it worth our while. I probably had a bit of a chip on my shoulder. I didn’t necessarily want to join the family firm and definitely had never thought: “I’m going to grow up and be a financial planner just like my dad and grandad.”’
Little joined in 2010 as a junior paraplanner, started taking her Chartered Insurance Institute exams, was appointed a director in 2014 when the firm moved from limited liability partnership to a limited company, achieved chartered financial planner status in 2016, and was appointed chief executive last January.
‘Nine years later I’m still here,’ Little says. ‘Financial planning is one of those professions most people fall into accidentally but once they’re in it, they absolutely love it. I can definitely attest to that journey.’
Appointing Little as chief executive was part of her father’s retirement plan. ‘My dad’s always had age 55 as a bit of a threshold in his head,’ Little says. ‘And that’s the strong message he’s been giving to his clients, who are all really pleased he is following his own advice.
‘I think that was a big trigger for some of the transition stuff we’re doing.’
But the transition has not been easy. ‘When you have had a parent-child relationship for 30 years and it’s suddenly in a business environment, that is unbelievably challenging,’ Little says.
‘You think you can separate work and home but you can’t. But once you start pushing through some of those initial barriers, you sort of feel like you can do anything.’
Little says she has also been learning a lot about herself during the transition. ‘You’re not just an employee any more and your role is not just to get on with everyone,’ she says. ‘You need to engender harmony as best as you can.’
Sensibly father and daughter have turned to business coaches and external help to smooth the transition process, including FP Advance founder Brett Davidson.
‘Brett has been a massive help for us,’ Little says. ‘We really needed someone straight talking to cut through as quickly as possible and provide a different perspective.’
Davidson describes Emery Little as an ‘awesome financial planning business’.
‘Customer care and a focus on achieving great lifestyle outcomes for its clients is in its DNA, driven by business owner Andy Little,’ says Davidson. ‘It has a young, intelligent, skilled and enthusiastic team, with some great talent coming through.
‘They are forward thinking and cutting edge. Jo Little was appointed as its youthful chief executive just over 12 months ago in a great next step in the firm’s development and succession planning.’
In the pipeline
Echoing Little’s own comments, Davidson says the leadership team has learned to ‘dig in’ to resolve tough issues ‘and has found new ways forward, growing as individuals in the process. It’s inspiring to be a part of’.
Little’s advice to anyone thinking about succession is: think about it sooner rather than later. ‘It will never go as you planned. You need time for it not to work and not to feel pressure for it to work,’ she says.
Profits have grown steadily year on year. ‘We haven’t set specific income growth targets, but we have purposefully looked to edge our profit figures up each year,’ Little says. ‘The ideal profit target for us is 25%.’
This has been achieved in part by a slight increase in ongoing fees since the retail distribution review (RDR) (see fees box above).
Historically, Emery Little’s clients have been employees of energy giant BP, although this has evolved to include executives from the wider oil and gas industry.
‘From a technical perspective, it has been really useful to have such a niche client bank,’ says Little. ‘It means we know the BP benefits package inside out, we know how their final salary works, we have contacts in the pension scheme, and we know how all their share schemes work.
‘We have worked with a lot of people from engineering backgrounds who are very detail-oriented but very time poor. So over the years we’ve tailored what we do to serve them.’
She adds, because the BP final salary scheme ‘is so good’, the firm has barely done any defined benefit pension transfers. One client had split service so essentially carried out a partial transfer, and another was in ill health. ‘I’m not judging anyone for doing them, but in 99.99% of cases for our clients it’s not the right thing to do.’
The firm has gone through a client bank segmentation exercise, particularly as it looks to bring in a younger demographic of clients. ‘But if you asked Gordon Ramsay to cook you a meal for £10 or £100, he’s going to make you the same quality burger regardless, because it’s Gordon Ramsay,’ Little says.
‘Not that we’re Gordon Ramsay,’ she laughs. ‘But to not do as good a job for someone just because they have a smaller portfolio isn’t something that sits well with us.’
The firm currently charges an ongoing percentage fee (see fees box). Little says if it eventually moves to a flat-fee model, clients would find it easier to self-select the services they want.
However, with an ageing client bank (a few clients died in 2018 bringing the client numbers down), Emery Little is currently undergoing an exercise to determine its ‘ideal client’ and putting effort into marketing.
Despite client numbers declining last year, market movements and increased money from existing clients brought assets under advice up. This year’s figure is projected lower to take account of an anticipated market correction.
October will be the firm’s 21st birthday. To mark this, it is undertaking a project of doing 21 things in 21 months, raising at least £21,000 for three charities: Stroke Association, Motor Neurone Disease Association and Cardiac Risk in the Young.
Personal stories lie behind the firm’s support for these charities. A close friend and client was diagnosed with motor neurone disease, and one of Little’s brother’s friends died of a heart attack. But the reason it supports the Stroke Association is even closer to home.
‘My dad had a stroke when he was in his early 40s,’ says Little. ‘It was pretty out of the blue. He was super healthy, super fit, and he ate really well.
‘But I think, and this is definitely my interpretation, not that of a doctor, that he worked way too much.’
Little calls the firm’s financial planning process ‘true wealth management, where the wealth management is the finances, tax planning, all the things you would associate with a really great chartered financial planning firm. And the true wealth is specific to the client, finding out what is important to them,’ says Little.
Some of the 21 things will be ‘true wealth’, such as a 21-week fitness plan, and some will be ‘wealth management’ such as the firm’s recently published 21 financial commandments. ‘On the actual anniversary, Dad and at least 20 other people will climb Mount Kilimanjaro,’ Little says.
The next 21 years are full of promise for Emery Little and its chief executive. By that time she may well be thinking about her own succession plan.
The fee bit
Emery Little charges upwards of £1,500 for a financial plan, 1% implementation and 0.75% ongoing.
In practice, most clients pay around 0.6% ongoing on average, as the firm transitions from the 0.5% fee it charged pre-RDR. Little says the firm aims to have the average reach 0.75% by 2020. ‘Doing anything like this sustainably is massively important for us. We know what impact a significant workload can have on the team and we want to maintain a good morale and not let standards slip.’
Little also runs an appointed representative of Emery Little, Eelah, serving London technology business owners, with Emery Little chartered financial planner Alfie Mullan.
In contrast to its mother firm, Eelah charges fixed fees only.
Mullan started at Emery Little straight from school as an administrator and was a paraplanner when Little joined in the same role. The two climbed the ranks together and have a good working relationship, with Mullan now overseeing more at Eelah, while Little focuses on Emery Little.
Little says Eelah was a blank piece of paper when it came to fees.
‘It’s difficult with Emery Little because there’s such a historic client bank so it’s a slower process to roll out changes,’ says Little. ‘Whereas with Eelah we were starting afresh and could set out fixed fees, which work for that client niche.
‘Our charging structure is definitely something we’re grappling with because charging assets under advice is super simple, but investment might not be where you are adding the most value.’
The investment bit
Since the RDR, Emery Little has had five growth and three income in-house model portfolios as its core set. It also uses Vanguard LifeStrategy funds for things such as junior ISAs or smaller pension pots, to complement the model portfolios. Fewer than 1% of clients have requested to use a discretionary fund manager.
‘But hopefully now our core portfolios have been running a good few years, those clients might eventually transfer over,’ Little says.
The firm works with Asset Intelligence Research, which helps with the construction of the portfolios and sits on the investment committee, which meets on a quarterly basis.
The investment committee comprises Andy Little, Asset Intelligence Research, any members of Emery Little, Mullan and Little from Eelah, and consultant Richard Allen of investment support firm RichardAllenInvest.
You can follow Jo on Twitter using the handle @jarenlittle. Here are some select highlights from her feed!
“There is no normal. Simply the relentless cycle of change.” https://t.co/ru8HfuriTn— Jo Little (@jarenlittle) July 10, 2018