Adviser profile: Steve Buttercase of Verve Investment Planning

After overcoming the loss of his father and fighting depression, Steve Buttercase is now on a mission to help clients find happiness at Verve Investment Planning.

Steve Buttercase's CV:

  • 2017–present: Verve Investment Planning, IFA and principal
  • 2009–2016: Sense Financial Solutions, IFA
  • 2002–2009: M2 Financial, financial planner and founder
  • 2001–2002: LM Financial, IFA
  • 1998–2001: Maddison Monetary Management, director and financial planner
  • 1991–1998: Acuma Financial Planning, division manager and district manager
  • 1988–1991: Prudential Property Services, area financial services director
  • 1984–1988: Halifax Building Society, trainee manager

Professional memberships and qualifications:

Dip PFS

Steve Buttercase's CV:

  • 2017–present: Verve Investment Planning, IFA and principal
  • 2009–2016: Sense Financial Solutions, IFA
  • 2002–2009: M2 Financial, financial planner and founder
  • 2001–2002: LM Financial, IFA
  • 1998–2001: Maddison Monetary Management, director and financial planner
  • 1991–1998: Acuma Financial Planning, division manager and district manager
  • 1988–1991: Prudential Property Services, area financial services director
  • 1984–1988: Halifax Building Society, trainee manager

Professional memberships and qualifications:

Dip PFS

A tough journey

Steve Buttercase, principal at Cambridgeshire-based Verve Investment Planning, has been on a tough journey that involved much soul searching since his last New Model Adviser® star profile appearance in 2011.

Leaving Sense Financial Solutions in 2016 was a difficult decision after he helped shape its model around his strongly held collectivist principles. This was compounded by the death of his father and a subsequent battle with depression.

But in the past two years, Buttercase has recovered well from both episodes and felt re-energised by starting his new company, Verve. The firm is, in many respects, a one-person lifestyle business, but it shares a brand and processes with Stephanie Clark and Fiona Sharp of Verve Financial Planning. Working with these two has also been reinvigorating, he says.

In 2011, Buttercase was helping to create a radical new structure at Sense, based on a ‘collective’ company with no sale value, but which passed clients down from older to younger generations. The idea was to nurture advisers who could buy out directors as they retired, with no need to ever sell the business.

'Like the Beatles...'

Buttercase is a semi-professional musician and an avid record collector in his spare time. He says he does not have a bad word to say about anyone at Sense, but 'like The Beatles' he experienced creative differences with his fellow partners.

‘I still believe in that model and it did work to an extent,’ he says. ‘Two directors retired, one was bought out smoothly, the other less so, as he did business quite differently to the way some others do. Financial planning is a people professional. It is a huge collection of cottage industries. Every fee-generating opportunity is between two individuals in a relationship, which is difficult to corporatise.'

But, Buttercase says, he disagreed with Sense on the balance between process and outcomes. For example, the investment proposition was too inflexible. ‘Processes are important, but client outcomes matter more and you have to adjust to their circumstances. Also, I think the “collective” model lost its nerve a bit. Instead of being progressive, we became conservative and less creative than I wanted to be.’

Reluctant to compromise his original principles, he left to run his own practice with more flexibility and freedom to meet individual client needs.

Another difference at Verve is that it is more ‘proactive than reactive’. It is a soapbox issue for Buttercase, who is known for his opinionated blogs and New Model Adviser® articles.

‘I am excited about the profession,’ he says. ‘It’s in fantastic shape and great young advisers are coming forward. But it is still very reactive, with a few exceptions. It lacks the spontaneity and creativity that any profession needs to adjust to the future.

‘For example, how many people are now paying into ISAs on their smartphones? That takes us back to old problems because they are buying from the banks that set up the investment apps and glossy adverts. Instead they should be using independent advisers because of the choice and professionalism we offer.

‘Part of the problem is that IFAs are in thrall to processes and systems, so we’re terrified of [operating outside them], being creative and doing new things. It’s not the Financial Conduct Authority’s fault, but how people are responding to regulation.

‘We also need new ideas to meet the huge problems we have with the wealth and savings gap, reform of state provision, and archaic taxation systems for investments that are encouraging all the wrong behaviours.’

The five commandments

Clark and Sharp created Verve Financial Planning when they left Norwich-based Almary Green in 2016. This was during the firm’s proposed sale to Standard Life’s 1825. The deal eventually fell through, underlining the difficulties of corporatisation and consolidation, according to Buttercase. He knew Clark and Sharp from a previous role at M2 Financial and joined them soon after in late 2016.

‘We run it as three separate companies, but we share the brand, business design, administration and investment propositions. It is everything you would expect from a bigger IFA, but we each take responsibility for our own businesses,’ says Buttercase. ‘The autonomy is important.’

Verve’s advice structure is based on cashflow modelling and is highly bespoke. Buttercase believes this is necessary to meet the wide-ranging financial planning needs of young people, the squeezed middle, retirees and the elderly.

Earlier in his career, he trained in financial planning with US-based Investors Diversified Services (IDS), part of American Express. It was a fun way to learn, he says. ‘At Palm Springs there was a scorpion in my bedroom and I met [entertainers] Tom Bosley and Bob Hope at the Palm Springs Yacht Club in the middle of a desert. I also played poker with the owner of JC Penney and his elderly friend, drinking Budweiser and eating caviar on crackers.’

But the teaching stuck and he still follows a five-point model taught by IDS. This involves: setting a goal; creating a plan; ‘working’ the plan; adjusting along the way; and dealing with discouragement and setbacks, such as market corrections, job loss or illness.

Playing catch-up

For cashflow modelling and back office, Buttercase uses the PlanLab system, which he says is the closest he has found to the system he learned at IDS.

‘The UK was 10 years behind the US then and is still behind on goal setting and linking the planning process to lifestyle,’ he says. ‘Often, we become too obsessed with returns and yields. But the positive outcomes for the client are what matter. Your money has no value other than the experience it brings you.

‘PlanLab doesn’t overcomplicate cashflow management because the numbers will always change, but the goals and the fundamentals won’t. Financial planning is about adapting and being there for clients when they need you, not just at the annual review.’

The data shown are for the Verve group, including Clark and Sharp’s businesses, but the three principals have around a third of this each, with around 80 clients per adviser. The group has no support staff. They do some admin themselves but also use The Adviser Support Hub. This works financially as the company has an 81% profit margin. Buttercase pays himself a salary and dividends, which last year totalled £60,000.

As one third of the collective and the only man, he enjoys the reversal of the profession’s male-dominated demographic.

‘I love working with Steph and Fiona,’ he says. ‘There are not nearly enough women in financial planning because of the patriarchal nature of the profession, yet many women are equipped naturally with the skills required for success. Bringing in more is one of the biggest challenges for the next 10 years. A key way to encourage younger women is to mentor and help them by seeing other successful women.’

Buttercase says his is a lifestyle, not a growth business. He does no marketing, except blogging and media comments, but continues to receive new referrals and introductions.

Unsurprisingly, Buttercase has no plans to sell and says he is not concerned with building value in the business. But where will succession come from this time?

‘I’m not planning on giving up any time soon,’ he says. ‘I like to keep helping people, sharing in their lives and the stages they have planned for.’

In future, Buttercase also wants to move into different areas – for example, training other IFAs in subjects such as client psychology and motivation. He says the work-life balance at Verve is good and allows time for his family – he has four children – and his musical passions, which also include writing songs and playing guitar in two bands.

Beyond the numbers

However, when he was suffering from depression, he was ‘always in the wrong place – at home thinking I should be at work and vice versa’, he says. ‘Recovering from that has helped me be in the right place.’

The depression was triggered by grief after the loss of his father, with whom he was very close, and he took four years to recover from it. Though it was a long process, Buttercase says the experience has made him a more agreeable person and a better adviser.

‘How can we make financial planning about not just understanding an ISA allowance but more about enriching lives?’ he says. ‘Part of that is understanding mental health. Also, I didn’t have financial problems, but I can imagine how mental illness would affect those who do. Advisers have a role in helping people in that situation and I’d like to explore that more.

‘Going back to working on my own has been busy but fantastic. Setting up Verve was energising and helped me a lot in my recovery journey. Happiness and contentment are about finding meaning, not about wealth and achievement, and this job does that fantastically. There’s nothing more fulfilling than seeing clients achieve what they want.’ 

The fee bit...

Verve services are bespoke, and it charges no initial fees for clients who sign up to the ongoing service. The annual charge is 0.5%, 0.75% or 1%, depending on how much time the adviser spends per client and is worked back to an hourly rate of £200.

Typically, a 0.5% client would receive passive investments, and at least one annual review plus standard statements and updates. A 0.75% client would usually receive at least six-monthly reviews, and regular updates and economic reports.

1% clients receive at least quarterly reviews, bespoke updates and reports, and cashflow analysis adaptable at any time. All clients have access to a portal, provided by PlanLab or Unipass.

However, Buttercase stresses that clients – especially in the 1% bracket – often receive much more than these minimums, for example, in-depth tax planning or advice on business financing.

The investment bit...

Verve uses five in-house model portfolios but flexes them wherever necessary to meet financial planning outcomes, says Buttercase.

He is adjusting existing portfolios considerably this year in light of the revised Mifid II requirements.

‘The Mifid II challenge is the overall burden of compliance and that the communication [of charges] has become a formal requirement, even though the discussions around the product or service may have been going on all year,’ he says.

The opportunity is to reduce costs and simplify the portfolio by reducing the number of funds, he says. One change has therefore been to include more passive investments to cut costs, such as passive blends from BlackRock, Vanguard, Legal & General and MyFolio to rationalise without losing diversification.

For fund selection, he uses research providers Synaptic and Trustnet, plus other personal research, fund manager meetings and attending New Model Adviser® events.

Buttercase is neither pessimistic nor optimistic about current markets. ‘Real returns will be a challenge over the next five to 10 years though,’ he says. ‘It’s a case of following the basics well and making sure your clients understand you will respond if there is a correction. That’s why the relationship with them is so important.’

 

The Twittersphere

You can follow Steve on Twitter using the handle @SteveButtercase.

Here are selected highlights from his feed:

 

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