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Adviser Profile: Julian Gilbert of Wealth Matters

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Adviser Profile: Julian Gilbert of Wealth Matters

For most people, the misfortune of Friday the 13th is just a passing superstition. The date only occurs a maximum of three times a year. For Julian Gilbert, Friday 13 January 2017 was the day he and his family received the news they had been dreading, that he had been diagnosed with stage two throat cancer.

Gilbert, director of Luton-based Wealth Matters, says he is a prime example of a director who prepared an ambitious and detailed business plan, without factoring in the possibility of unexpected illness.

Despite this, Wealth Matters is prospering, and Gilbert now sees the world around him in a whole new light.

Niche success

Wealth Matters first appeared on the cover of New Model Adviser® in 2008. In its early days, the firm enjoyed the success of its niche focus on freelancer and contractor clients, having collaborated with an organisation called the Professional Contractors Group (PCG) to become a partner for pension advice.

‘We understood the issues and needs of freelancers and contractors,’ Gilbert explains. ‘We showed them how to extract money from the business tax efficiently, advise on company pension contributions, and niche products such as executive income protection and life policies.’

The firm would typically take on two to five new clients per seminar carried out with PCG. The organisation has since rebranded to The Association of Independent Professionals and the Self-Employed, repositioning as a mass-market membership body for the self-employed. As a result Wealth Matters attends fewer seminars and takes on fewer new clients this way.

Building a bank of freelancers and contractors has, though, reaped long-term rewards. With many of these clients in the accumulation stage, the firm has steadily grown its assets under advice, and Gilbert no longer needs to add to his own client bank.

‘If the markets are going up, your clients are accumulating, and they don’t leave, then business can only go one way,’ he says. The firm now tends to only take on clients with a minimum of £100,000 to invest, though it does not actively seek new additions unless they have £250,000 and upwards.

JULIAN GILBERT CV

  • 2000-present Wealth Matters, director
  • 1999-2000 Canada Life, financial adviser

Professional memberships/qualifications

  • Certified Financial Planner
  • Chartered Wealth Manager
  • Diploma in Financial Planning

Riding high

When Gilbert last featured on these pages, he appeared alongside his then colleague Paul Cleworth, who had joined the firm as a director two years previously. Having successfully partnered for nearly 10 years, the pair parted ways in May 2016, and Cleworth subsequently set up his own firm called Tandem Financial.

The departure resulted in a fall in revenue from renewal income in 2016 and a further decrease in total income is projected for 2017, being the first full year without Cleworth (see figures below). Despite this, the firm continues to increase its client numbers, and Gilbert says turnover is the best it has ever been, at an average of £600,000 per full-time adviser, ahead of target for the year.

Following Cleworth’s departure, Gilbert put together a three-year business plan, and worked as many hours as possible to implement much of it in the months that followed. The firm revamped its marketing, with a focus on the wider team, and worked with branding expert, and New Model Adviser® columnist, Brett Davidson, director of FP Advance.

It was a good time for Gilbert; he had taken up cycling, after one of those infamous chats with a friend at the pub, and began intensely training to complete a stage of the Tour de France through the Alps.

‘It was horrible,’ Gilbert says. ‘But it was an amazing sense of achievement, and the scenery was stunning.’ In June 2016, Gilbert was the fittest he had ever been, until he was forced to press pause. ‘I was so healthy, I’d lost a shedload of weight,’ he said. ‘I was really energised and felt so good about life, then life turned into turmoil.’

FEES

Wealth Matters changed its charging structure in 2010, having previously charged a 3% upfront fee and 1% trail. ‘It created resistance for clients with big portfolios and we were struggling to attract clients with £500,000 or more,’ says Gilbert.

The firm now charges a flat fee for the financial plan, typically £2,000 to £4,000, and a separate 1% initial fee for implementation.

Ongoing fees are 1.1%, plus 0.2% to 0.3% for Nucleus or Transact platform charges, and 0.24% for funds, the aggregate costs of the Wealth Matters ‘WRAPS’ portfolios (see box below). This fee is low due to the portfolio being invested in passives. Clients with more than £1 million pay a 0.5% initial fee, 0.75% trail charge and 0.24% for funds.

Non-active clients have investments with or make regular contributions to Wealth Matters. They are charged an initial fee of 1% and 1.1% ongoing, but they do not have regular reviews or top-ups at the end of the tax year.

Hitting the brakes

By the New Year, a painless tickle in the throat had escalated, and after multiple tests came the dreaded, but by then anticipated, confirmation of throat cancer. ‘Luckily I got it early,’ Gilbert tells me, before asking if I know much about the stages and treatment of cancer.

‘No, I didn’t either, until about six months ago,’ he replies to my shaking of the head. Catching the disease at stage two meant that, fortunately, it had not spread, and Gilbert did not need to undergo chemotherapy. Instead he underwent six weeks of treatment and 30 sessions of radiotherapy.

For the first two weeks, or the ‘honeymoon period’, as it can be medically known, Gilbert managed to work part time. After that, he was out of action for three months and he could not eat. ‘My plans to grow and develop the business were just gone,’ he recalls.

Passive preference with geographical spread as Wealth Matters focuses on client outcomes

Wealth Matters uses FinaMetrica to determine a client’s risk appetite before selecting one of its seven in-house risk-rated portfolios, or a bond portfolio, which Gilbert says is rarely recommended.

Portfolios are passive and mostly hold funds from Vanguard and Dimensional, along with Legal & General’s Index Linked Gilt fund and BlackRock Global Property Securities Equity Tracker, and are tilted towards allocation to smaller companies and value stocks, based on academic research and Dimensional Fund Advisors.

Gilbert prefers passives because they offer better value than active funds. ‘We used to have an active fund that was doing really well, but the fund charge was around 1.15%, while Vanguard’s passive equivalent charged 0.15%,’ he says. ‘I thought: "Can this fund manager beat Vanguard every year by 1%, without question?"’

The firm’s ‘WRAPS’ portfolios range from ‘Intrepid’, which includes tracker funds and pure equities with nothing allocated to bonds, to ‘Very Cautious’, with 20% in equities and 80% in bonds.

The firm spreads the geographical net wide, investing around 15% in the UK and placing heavier weightings in the US than in previous years.

Portfolios can be measured internally against non-tilted benchmarks. The WRAPS Moderate portfolio has been measured against a composite made up of the same asset allocation as the portfolio (60% equity, 40% bond) without a tilt to smaller companies and value stock, similar to the LCI UK Balanced (60:40) benchmark.

However, discussions with clients are rarely about the markets, says Gilbert, instead focusing on whether a client is on track to achieve their financial goals. ‘We benchmark against inflation, as that’s where the cash may sit otherwise,’ says Gilbert. ‘We almost never get asked about how funds are performing, and discussions revolve around risk and cashflow modelling outcomes.’

Keeping on track

The Wealth Matters team had to abandon new ideas, consolidate and, in Gilbert’s absence, step up to the plate. Bruce Nash, certified financial planner and chartered wealth manager, as well as a long-term acquaintance of Gilbert’s, took over the running of the business, and Gilbert’s client bank was taken on by Nash and Joanne Scott, an independent financial planner at the firm.

Nash made weekly home visits to Gilbert and presented him with the latest issues of New Model Adviser®, which Gilbert assures me were a highlight of his week during the recovery.

Although Gilbert says he was frustrated to be in limbo, forward planning meant the business did not falter. In fact, the first quarter of the year was one of Gilbert’s best ever, due to business he had teed up in January before having to step back.

Gilbert puts the firm’s robustness down to the fortitude of his staff, as well as the patience of his clients, who together sent more than 80 supportive emails once informed of the news. ‘I learnt that my clients and my staff are fantastic,’ he says. ‘I’ve tried to look after them. I’m very keen on keeping the staff happy and thanking them for their time,’ he says.

The extra mile

Wealth Matters is an accredited financial planning firm with the Chartered Institute for Securities & Investment. It set up as an LLP a few years ago to give staff the option to become a partner in the practice, with Nash recently benefiting from this by becoming a partner in August.

Out of 11 staff members at the firm, eight are women, a rare ratio among the profession. ‘We’re good at working with mums, we have a lot of part-time workers and I’m a parent myself, so I have an idea of how hard it can be to balance work and home life,’ says Gilbert, who has recently rewritten his business plan to focus heavily on developing and rewarding his team.

Conversations with clients also focus on what is important: the end goal. The firm has developed its own cashflow modelling tool, with the help of one of Gilbert’s IT contractor clients. The system is suited to the freelancer and contractor market and provides more options around growth and withdrawal rates.

The firm has also worked with Abraham Okusanya, director of research consultants FinalytiQ, who has helped its delivery of disaster scenarios.

Back in the saddle

Gilbert received the all clear on 30 June 2017. As we chat, he casually refills his coffee, for the third time, before finishing what is already in there. But as if to prove his glass half-full attitude extends past his coffee cup, he goes on to tell me how his illness has given him a new thirst for life.

He is back on the bike and, despite already sustaining a broken finger, he is planning a bike ride in the Dolomites next summer to raise funds for Oracle Cancer Trust. He is hoping to raise £50,000 over the next 12 months.

‘The most important thing is friends and family,’ says Gilbert, who has booked a number of holidays with his loved ones since receiving the all clear.

The firm’s proximity to Luton Airport and the daily rumble of passing aeroplanes – I counted nine in two hours – serve as a constant reminder to live life.

‘When you have something like that, and you survive it, you never look at things the same way again,’ Gilbert says.

‘I just want to enjoy life; you never know what’s around the corner.’

FIVE TOP TIPS

  1. Write down a three-year company plan, break it down and communicate it to your team.
  2. Get to know niche clients and their issues. Adapt your meetings to their needs and concerns.
  3. Make sure you and your staff are learning. Develop your staff, pay for them to do exams.
  4. Prepare for the worst. Make a plan for if one of your staff became seriously ill before it happens, not afterwards (like I did).
  5. Enjoy life; you are only here once. Make sure your clients do too.

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