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Adviser Profile: Pete Matthew of Jacksons Wealth Management

Adviser Profile: Pete Matthew of Jacksons Wealth Management

Serial podcaster Pete Matthew has used his tech nous to make meaningful money at Jacksons Wealth Management, turning the West Country firm into a big business.

Pete Matthew, managing director of Jacksons Wealth Management, is proving a remote location such as Penzance is no longer a barrier to building a national firm.

The creator of the MeaningfulMoney.tv podcasts is renowned for his skill in internet marketing and passion for financial education. Consequently, the firm now has clients around the country that he and his advisers have only met through Skype. Matthew plans to capitalise on his online skills and reputation by launching an investment service this year.

PETE MATTHEW CV

  • 2007-present Jacksons Wealth Management, director
  • 2005-present Jacksons Wealth Management, adviser
  • 2002-2005 Randle Thomas Solicitors, IFA
  • 2001-2002 Ashwood Financial Services, Cardiff, IFA
  • 1999-2001 Royal & SunAlliance Property Services, financial adviser
  • 1998-1999 Co-operative Insurance Society, financial adviser

PROFESSIONAL MEMBERSHIPS/QUALIFICATIONS

  • APFS Chartered Financial Planner
  • CFPCM Certified Financial Planner
  • Chartered Wealth Manager

Spreading the word

The last time a Jacksons’ cover star featured in New Model Adviser®, in 2009, Matthew’s aim was to more than quadruple its funds under advice, from £23 million to £100 million. After seven years, it has exceeded even this ambitious goal. Funds are now £135 million and Jacksons is about to break through the £1 million turnover milestone.

A significant part of this success has been down to MeaningfulMoney, which Matthew started in 2010, which has more than 200 podcasts. New podcasts receive an impressive average 6,000 clicks each.

This has built Matthew’s reputation such that he only need mention he has capacity for new clients in a podcast to receive many enquiries. Indeed around 20% of the firm’s new business now comes via MeaningfulMoney.

It looks set to be the perfect tool to drive the new investment service, which Matthew says ‘will not offer regulated advice, only simple, low-cost, good asset management. Many advisers tack a white label, online service onto their website and assume it will work. But you have to do loads of marketing to get people to trust you with their money online. We have the audience and the trust.’

Social media marketing will also be key, he says. ‘What many people don’t get yet is social media is the internet, not a subset. We are moving into an entirely social web. Facebook will be our wallet, our driving licence and our payment system.

‘Forget about privacy: they already know everything about us. So why not embrace it and use that system to make money?

‘What drives people to seek advice won’t change. They won’t seek it from someone they don’t trust, and their bullshit radar is more finely tuned than ever thanks to the internet. After seven consistent years of videos and podcasts, people think you must be about something because you’ve stuck at it so long.’

FEES

Jacksons has raised its fees since 2009 to reflect the greater costs of doing business, say the directors. The maximum for initial fees has risen from £2,000 to £2,500. Implementation fees range between zero and 3%. Meanwhile the ongoing fee has gone up from 0.5% to 0.75%.

Improvements to the ongoing proposition include implementing a 10-point review process at annual meetings. This ensures each review provides maximum value.

Clients can also request an interim meeting and they receive an annual one-page schedule of their investments. This shows what they put in; what their investments were worth last year and at inception; the percentage rise or fall; and what they might be worth on death. ‘That was in response to client demand and they love it,’ says Matthew.

New ideas

Ideas man Matthew has created two other initiatives in recent years. The first, Advisertech, was a marketing forum for advisers, but he shelved it as it was taking too much time. The second, MeaningfulUniversity, offers unregulated courses for the public but is currently closed awaiting some new courses that Matthew is writing.

‘I try these things for fun,’ says Matthew. ‘The first course was a weekly webinar for four weeks charging £250. I had 40 takers in total, which was not bad for six hours’ work.’

Jacksons has its roots in an insurance brokerage set up in 1923, which launched a financial services arm in 1974. In 2009, the previous owners of the wealth division started retiring to make way for Matthew and co-director Roger Weeks, with Chas Cox joining as a third director in 2014. The trio now share ownership equally with sleeping partner Mike Caffry.

Matthew says: ‘Ongoing relationships have always been important and Jacksons has clients into the third generation. But since the previous directors retired, we have focused on managing those ongoing relationships more carefully, for example with more consistent and better quality regular reviews.’

DFM and multi-asset mix for investments

Jacksons outsources much of its investment work to the Seven Investment Management (7IM) AAP fund range. However, it also uses multi-asset funds from Vanguard, Fidelity and Premier, where further diversification is required.

Since 2015, the firm has used consultant Glyn Chetwynd of Capital & Risk to conduct a regular due diligence process. He compares potential investments against their Investment Association (IA) sectors on criteria such as cost, volatility and Sharpe ratio. Two years ago, Chetwynd also built three income portfolios and an ethical portfolio for Jacksons.

Cox says: ‘7IM has an open culture. Co-founder Justin Urquhart-Stewart talks to us directly. They handled the run-up to Brexit superbly in portfolios: they were in the office overnight and placed a large currency trade in the morning, which paid off.’

7IM has also delivered predictable returns throughout those 12 years, he adds. But in 2015 it underperformed its IA sector slightly. Volatility was up and performance was down due to over-correlation; that is, too many assets behave in the same way.

‘They responded by beefing up their risk team,’ says Cox. ‘That’s the sort of partner we want.’

Ongoing growth

To support its growth, Jacksons has taken on two advisers and several support staff, including two paraplanners, and moved to a larger office in the centre of Penzance.

Matthew says: ‘We are being more deliberate about marketing and tracking all the things we try; for example, where new enquiries come from. Then we keep developing the most productive sources.

‘We’ve done local advertising for name awareness, which didn’t bring anything. Professional seminars for accountants and solicitors have been more successful and we have improved professional referrals generally. However, apart from client referrals, online marketing has become by far the most important marketing channel.’

Passion and profit

Matthew says MeaningfulMoney started as a hobby but quickly achieved commercial benefits. ‘The idea came from a book I read called Crush It! by Gary Vaynerchuk, which showed how to use the internet to turn your passion into a business,’ he says.

‘The original intention was simply to scale the benefits of financial planning for the public. I also have a nerdy passion for the internet and technology and this was a way to combine all three.’

Jacksons operates in one of the less wealthy parts of the country and the average investment figure of £182,000 has not grown quickly. The costs of running a business keep rising and the new directors have been buying out the previous owners from cashflow. So rising profits have been important to keep Jacksons’ finances on a firm footing.

The firm has achieved this with the focus on marketing and ongoing relationships. This has resulted in a hike in recurring income from £336,000 in 2013 to a projected £703,500 in 2017. This has taken the firm’s profitability per active client from £589 to a healthier £879 projected.

Jacksons is now projected to make £500,000 (48%) profit in 2017. This has grown steadily, except in 2015, when it fell slightly due to the investment in the new office and using a consultant, Rob Stevenson at Kingmakers.

‘Rob helped us think and look bigger,’ says Weeks. ‘He made us understand there is a ceiling you have to push through by using more support staff. This helped set the "larger business" tone and culture for the new generation of staff.’

Cox adds: ‘That was a change towards thinking like a business owner. It helped us achieve £1 million turnover, which is unusual for a Cornwall-based firm.’

Shift in focus

The firm achieved corporate chartered status in 2011, which helped boost professional referrals. Matthew, who is both chartered and certified, says: ‘Chartered is more important now as it is understood and carries more weight with clients and professionals. But becoming certified was more important to me as a professional planner. I regret that certified seems to be perceived as an inferior brand.

‘I feel financial planning has been marginalised since the Institute of Financial Planning’s merger with the Chartered Institute for Securities & Investment (CISI). I haven’t been to a regional meeting yet, because the agenda doesn’t interest me.

‘The Personal Finance Society is improving and becoming the professional body with clout. Its conference looks great, it has the financial planning festival in November and its journal is looking better.’

Despite this criticism, a spokeswoman for the CISI counters: ‘There are over 170,000 Certified Financial Planners [CFPs] globally. We have just launched our annual CISI Financial Planning Conference, to take place in September, with cutting edge advice from globally renowned speakers.

‘Keri Carter, a CFP professional based in Worcestershire, says: "Most planners I know and respect hold the CFP because it confirms we have the appropriate technical knowledge, and help clients achieve their goals in a practised, recognised way. I do not see the Chartered title offers the same thing. For those who retain the passion and commitment to grow the profession, the CFP remains the global symbol of excellence."’

Looking ahead

Jacksons staff receive a salary and an annual discretionary share of profits. Directors take a small salary and dividends based on profits.

‘We are still buying out the retired directors, so we are careful on our remuneration. The last of the previous owners retired in 2013 but it was a six-year buy-out so that one will not end until 2020,’ says Matthew. He said the recorded costs do not include these payments.

The directors are pleased with their current management set-up. Weeks says: ‘Pete is the techie, I am the money guy [finance director as well as adviser] and Chas is more corporate and makes us think like businesspeople.’

Weeks says he and Cox will retire before Matthew. As they do not want to sell the firm, Matthew may buy them out at some point, but they will need to recruit more staff to support him. This will help improve an already good work-life balance. The directors enjoy a variety of outdoor pursuits and, as they say, why live in Cornwall if you do not have time to enjoy it?

FIVE TOP TIPS

  1. Do not pick individual active funds.
  2. Only work with clients and colleagues you like.
  3. Have an online presence; without it you are invisible in 2017.
  4. Remember that new clients are worried when they walk in the door. Your job is to allay their fears.
  5. Always use best-of-breed software and computers. They are the tools of our trade.

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