Exams and qualifications are not everything. And sometimes even being right is only half the battle.
In the early years of Ovation Finance, back in the 2000s, I dealt with two clients who were both advised by the same elderly accountant.
Back then, I was an expert in SSASs. The rules in those days allowed the SSAS to make an unsecured loan back into the sponsoring employer. This was a great tax-saving method for business owners to make pension contributions, yet still invest in their business.
Having helped run such schemes in my previous job as a pensioneer trustee, I knew the rules well and was pretty good at spotting opportunities to use them. Both these clients were business owners. Their accountant was previously a partner in a regional practice, but had retired from the firm, taking a select number of clients with him.
Shock to the system
In both cases, the accountant challenged the advice I gave the clients. In both cases, the accountant was wrong and I was right.
This created a problem for me. The advice was outside the accountant’s field of knowledge, yet this did not stop him from writing down everything he thought was wrong with my proposals. These letters were filled with mistakes and technical inaccuracies. Despite pointing this out, the clients took the accountant’s advice and, a few years later, moved to another adviser.
The accountant had been providing help to these people for around 20 years, and here I was, a young upstart, advising them to do something their trusted old accountant did not agree with.
At the time, I was incredibly frustrated. I delicately tried to point out they were being given bad advice by someone who was not up to date with pension rules. This only seemed to diminish me further in their eyes.
Both clients paid more tax than they needed to, and their businesses were held back because of the advice of the out-of-touch accountant. And yet, the clients were happy.
As I now approach the age these clients were at the time, I am finally starting to understand what happened. There was no doubt the younger me had the clients’ best interests at heart, but it is also true I was excited by the clever technical solutions I had come up with.
Trust over money
As I now seek advice for my family and myself, I realise my drivers are not what the younger me would have assumed them to be.
For example, a few close friends who were only a few years older than me have died recently. I realise what I look for in an adviser is somebody who understands me and who I can trust to look after my family when I am no longer around. This is more important to me than ensuring I do not pay more tax than I need to, or maximising investment returns.
So, here is my advice to young advisers, who perhaps have achieved chartered status and are looking for the next exam to take or specialism to conquer: you already have enough technical knowledge.
Focus on becoming the sort of person someone like me can trust will look after their family when they are gone.
Chris Budd is chairman at Ovation Finance