Financial Planner Life Podcast

Why Switching from Mortgage Advice to IFA is a good idea! With Daniel Hobbs of New Leaf

August 15, 2024 • Sam Oakes

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Are you a mortgage advisor looking for more stability and long-term growth in your career? Transitioning to an Independent Financial Advisor (IFA) might be the strategic move you’ve been searching for. In this episode of the Financial Planner Life podcast, Sam Oakes sits down with Daniel Hobbs from New Leaf to explore the benefits and challenges of making the shift from mortgage advice to financial planning. They discuss the role of networks like New Leaf in supporting advisors through this transition, the potential for increased financial security and business growth as an IFA, and the key considerations for those thinking about making the leap. Daniel shares success stories from mortgage advisors who have successfully transitioned, offering practical advice on how to leverage existing client relationships and data to build a thriving IFA practice.

Key Topics Covered:

  • Introduction to New Leaf:
    • Overview of New Leaf's support for mortgage advisors and IFAs.
    • Explanation of the network's role in compliance, regulatory support, and fostering a community.
  • The Case for Transitioning to IFA:
    • Differences between mortgage advice and IFA roles.
    • Long-term benefits of becoming an IFA, including recurring income and business value.
    • Success stories from advisors who transitioned and grew their practices.
  • Challenges and Considerations:
    • Importance of a mindset shift from transactional sales to long-term financial planning.
    • Financial implications of the transition, including the need for financial reserves.
    • The necessity of patience and taking the time (6-24 months) to establish a successful IFA practice.
  • Support from Networks Like New Leaf:
    • New Leaf’s mentoring and development programs for new and transitioning IFAs.
    • Importance of choosing a network that aligns with individual goals and offers comprehensive support.
    • Details on New Leaf’s Academy program for guiding new advisors.
  • Leveraging Existing Client Relationships:
    • Strategies for mortgage advisors to use existing client data and networks to build their IFA business.
    • Emphasis on understanding client assets early to identify wealth management opportunities.
  • The Future of Financial Advice:
    • Discussion on the decreasing number of wealth advisors and the growing advice gap.
    • Opportunities for mortgage advisors to transition and meet the increasing demand for financial planning services.
    • The role of technology and AI in enhancing advisor efficiency and client service.

In conclusion, the episode offers valuable insights for mortgage advisors considering a transition to financial p

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Speaker 1:

And today's guest on the Financial Planner Live podcast is Daniel Hobbs from Newleaf. It's a network. They've got over 300 advisors that's a mixture of mortgage advisors and a mixture of financial planners and nearly 170 ARs, of which they cap it at to give it the best service they can. Today we talk about mortgage advisors transitioning into financial planners self-employed. We talk about their academy, where they'll take somebody on without any experience and get them through cast status on a self-employed basis towards running their own AR practice. We talk about some of the horrors, some of the things you've got to look out for and be worried about if you're going to go down the self-employed route.

Speaker 1:

Daniel doesn't hold any punches. He says it how it is. He doesn't roll out the red carpet. He's going to do as much as he can to put you off going self-employed. So make sure you're the right person on the right pathway to become the best financial planner you can be. I hope you enjoy this episode, daniel. Thanks for joining me today on the Financial Planner Life podcast. How are you? Very well, thank you. Great to be here, top man, excellent. Well, I first heard of New Leaf through your dad, aston Mark Hobbs.

Speaker 2:

Yeah, Aston man himself.

Speaker 1:

Aston man himself. Well, I tell you what the guy's got some interesting stories and things that happened in his life and I tell you what he was one of those people, and I've spoken to lots of people over the last 16 years, but he was one of those people that I really, really, really enjoyed talking to yeah, he's, he's been I mean obviously a driver of our business, our network, new leaf, and built it, and built it from the ground up.

Speaker 2:

Some of the things he's done in the past just the experience he has is second to none and really forward thinking as well to do what he's done and achieve and bring the whole family, myself and others, to bring us all together.

Speaker 1:

It's been a journey, it's been amazing, really Beautiful, and you've seen it. How long have you been there for? So I'm nearly 15 years now, wow. So you've seen it take shape in lots of different forms. Then.

Speaker 2:

Yeah, yeah, I came in just after the credit crash. It was, you know, it was quite a tough time for everybody. Then I know, obviously, mark, my dad. He went through the credit crisis at the time and we lost a lot of advisors and mortgages were gone and, um, it really was a rebuild phase. It was almost like a restart really. So when I came in, we were a lot smaller than than we are now, but together we've really, you know, I think, got a great team here we've built over the years and a lot of the members who work with us have been with us a long time as well, so really just grown up again and it's gone way beyond the way it was pre-crash, which is great that's amazing to hear good stuff and some good news.

Speaker 1:

Your end, then, because you're the network director at the moment, but you are stepping up into the role of ceo of new leaf no, it's amazing, you want mark.

Speaker 2:

Uh. Yeah, my dad announced it at a conference last month and, uh, you know, sort of a bit earlier than planned. I think he just got excited. He told everybody then, um, he got, he got out there in the press and things and we haven't actually put the application in yet to the regulator. And so I am to be the ceo, uh, taking on the role, role from mark. He's uh, he's still going to be obviously actively involved. He's he's the majority shareholder of the business and he'll be, you know, as he's saying us, he's going to support us you know as he, uh, as he develops his role as well into its chairman or founder principal of the business still.

Speaker 2:

But yeah, really just taking on some of those day-to-day roles that he was doing to help him, you know, and just take on some of the stuff that he was doing before fantastic.

Speaker 1:

So, daniel, for those that don't know, just explain what your role is currently at newly from and what is a network essentially?

Speaker 2:

Yeah, well, so so we watch. The New Leaf is a network, which means we have appointed representatives. So an appointed representative is essentially a standalone business. It can be a limited company, it could be a sole trader. They can have one advisor in the firm, up to 400 advisors in the firm, you know, depending on how big they want to go.

Speaker 2:

Um, but what it, what it is, is that the a, the ars we shortened it to. They don't have the regulatory risk on them. So yes, they have to follow the regulatory rules, but the network takes on the risk of their advice. So that is the difference really, between being yourself directly authorized or going under a network, is that that risk transfer goes to the network. Now what's the compromise for the AR, for the network to take on the risk? It means that they will normally have a sales process, a compliance rule regime that they adopt, the AR adopts, and obviously there'll be fees they normally pay to the network as well, but they won't have any direct fca fees or pi requirements because that's all sourced through a network for them. So fantastic if you're new, because new advisors especially will struggle to go directly authorize. It wouldn't be a good idea at all to do that so you can join a network. Everything's ready for you, set up and then they will train you and and supervise you going forward so that's basically what we do fantastic.

Speaker 1:

So how many people have you got underneath your network then?

Speaker 2:

well, we have 175 ars that work within within our umbrella, under our umbrella, um, of which there's around about 300 advisors. So most of our firms are quite small. You know one or two man-band businesses uh, we do have a few that are a bit bigger than that, but we tend to be. You know one or two man-band businesses uh, we do have a few that are a bit bigger than that, but we tend to be, you know, working with, with people who, changing their career they've worked in corporate life for a long time, maybe that sort of thing they want to have a bit of flexibility, lifestyle change. They can work from home. You know this sort of thing. So that's the sort of firm we've generally worked with up to now, um, and, and they can be ifas, they can be mortgage advisors, they can do all the permissions.

Speaker 2:

So, yeah, so it's, it's a. It's really nice setup and we get we know everyone really well because we're a bit smaller. So having less ars means we can really get to know the firms that work with us and hopefully then give them a great service, which is what we're here for. We are accountable as a network. If we fail our advisors in some way, then you know, they need to be able to choose who to be with, who to work with as a network partner. So, yeah, we're really happy with that and that's a cap we have, so we don't actually go beyond our cap of 175 firms, right? So we do want to foster exclusivity to our network and we don't want to be known as a stepping stone network either. We should be the final destination for a firm. Once you're in, you're in.

Speaker 1:

So if you're in, you're in. So if you're in, you're in, and you want to keep them in there, what are you doing to keep them in that?

Speaker 2:

well. I think a lot of it, sam, comes down to the fact that we get to know them really well. People feel valued and that's really important. It's not always about numbers, the deal, the fees. You can get a new leaf. You can get a better deal elsewhere 100. We're not the cheapest option out there, um, but we're not the most expensive either. But people don't like being left alone.

Speaker 2:

I think advisors want to be the network, because they want the support, they want to be actively encouraged to be involved. I don't really like the word network either. I prefer community. So I feel like we've built a community of firms that work together for a common goal, common vision to essentially help all of our UK based customers that's what we're here for and be able to deliver that with every permission area available. So you haven't got to say no to a customer. You can do it or someone within the community can do it, and I think that's what people like about us. Retention for us is great. I mean we have. We just had our 10-year loyalty dinner we do every year and every year there's more people who are invited because it's just increasing every year. There's another group of people who have made 10 years with us as members, um, and it's quite emotional actually when you see those guys, because they're not just members or clients of ours now, they are actually friends well, that's good to hear.

Speaker 1:

It's a nice, supportive community. I think we all want that, as human beings, to feel like we belong, and there are people in there to support us, guide us and have our best interests at heart, but, at the same time, leave us to our own devices, our own autonomy and we have that element of control.

Speaker 1:

So we feel like we are running our lives how we want to run them. There's not somebody breathing down our neck, um, and we can do what we want to a degree, because obviously we still got played by the rules, because you guys taking on the risk, right?

Speaker 2:

yeah, exactly yeah. So that is that. That risk transfer is there. We have to monitor that. You.

Speaker 2:

You know, I think sometimes networks might get a bad rap because it can be that they come down hard on people sometimes. I think it's just, you know, there's there's a fine balance between motivating someone to write a business and to help them with that, whilst also then making sure they are compliant. But, yeah, being a bit smaller, I think that's easier to manage. When you get I mean, I might be completely wrong we have a network so bigger than us obviously out there and we'll be looking. No, it's not, he's like he's talking rubbish.

Speaker 2:

But I think, generally speaking, the bigger you get, the harder it is to control the whole group and you will have to rely on. You can employ lots more staff obviously. Then you're putting in new managers, that sort of um, that sort of communication culture between the top level people, networks of the advisors on the bottom, the bottom end. Almost now it's just completely gone. They haven't got that any availability to talk to somebody at the top. They haven't got that any availability to talk to somebody at the top. They're sort of being handed off to regional managers and all this sort of thing and it just loses that culture, just gets lost in there somewhere, and I think that's the problem.

Speaker 2:

You get bigger, you have to rely on tech massively, and that's great, we all use tech but sometimes you can rely on it too much and it can become actually a burden to the business. So you know, yeah, I just think from us, from our perspective, we really, like you know, working with people we get on with as well, it's not about money, it's not about how big the person is or how much they write. If I can go to the pub with someone, have a beer with them, get on with them, then right let's work together.

Speaker 1:

Happy days, great stuff so those 300 advisors, those are 170 ar firms. What percentage of those are mortgage and protection and what percentage of those are ifa financial advisors?

Speaker 2:

so majority of our people are mortgage and protection advisors. We we started out as a mortgage and protection network. That's how we, how we started um in 2014, we took on investment permissions through the network. So we've been over the last 10 years. I mean I can't believe it's 10 years now. I mean it feels like it's not that long at all, to be honest, but a decade has now passed. We've been slowly, organically growing the ifa side of the community, so we're up to uh around about 90 ish now. We've got ifa licenses with us and then the rest of you. Then the rest of the group has mortgage protection. Some of them do mortgages as well. Some of the IFAs also have mortgage licenses still at the moment as well.

Speaker 2:

But that's just growing nicely and we had a target to get to 100 IFAs. That was the target and we wanted to get to a billion under management across that group, which we basically achieved that now, which is great, and we're nearly there with 100 target as well. So it's only taking 10 years to get there, but organic growth. That's why it's like we're all paying. We're very patient network. We take our time. We haven't got a shareholder looking over our shoulder wanting return on investment tomorrow. So I think that's also a nice thing about us is we haven't got that sort of pressure to build the network to a massive, massive number to make money for a shareholder. We're doing it for ourselves, essentially.

Speaker 1:

You talked a little bit about firms being quite young in their journey into advice, whether it's mortgage protection, whether it's financial advice, yeah, financial advice, yeah. You must then come across people that are making some perhaps bad choices, bad decisions early on in their careers, maybe making the wrong choice, starting on their own. What kind of horror stories are you coming across? How are you fixing those? Or at least let's give some warnings to people about how ready they should be to to enter into the world of self-employed.

Speaker 2:

At the end of the day, yes, so new leaf, the neighbor company, you can sort of guess we talk well, we're not new people telling a new leaf starting a new career, we're used to that and we we work with a lot of people who, you know, want to get into planetary services and some of those people are literally at the beginning of that journey so they haven't even started qualifications yet. So we try, and you know, assist there as well, um, but obviously we're not going to talk to everybody. So there's people who just go headlong into it and go headfirst, sorry, into it and they'll make maybe the wrong choices, like you say, and there's not much content out there. There's not much out there to give you know that people can find about. Do I do a network? Which networks are right for me? You know what qualifications I need to do. There's not really much to help someone. They've sort of found it up for themselves and therefore you could be referred into a network which really is suitable for you, because they don't like really working with new people. A lot of networks. What they will do, the new advisor, is they'll just place you under a firm that works with them, so one of their current ar firms. They'll just stick you under that firm. It's not really got any thought about mentoring or how they're going to support you. The person who runs the ar is just basically getting a top slice, so they're happy if it works out great for them, but they haven't really got to do anything. Um, so a lot of those guys will fail because they're just on their own still, um, and this will be fudged into a firm which is not not their business. There's problems over who owns clients as well, so that can be a problem for them. So you really need to be mindful of that.

Speaker 2:

If you're a new person looking to join in this industry is really talk to your networks, get around them all. A lot of them have got academy programs, so what does that mean? What do they give you to be part of the academy? Um, do they provide leads for these ventures as well? Who owns the client is a big one, because some, some places I'm not gonna name names today. Obviously I'm not into that. I've got respect for our competitors generally I do but there are some places where the contracts say clients run by the network or principal, so that is used solely to retain the advisor forever, to stop whatever leaving at, which I find quite toxic, because if you fall out of that business or they just get rid of you as well, they're going to terminate your contract. Your clients aren't your clients. You can't talk to them anymore. Um, you could, you'll be at the. You know you could be taken to court over that, and these guys have got lots of money and they will do that 100%. So be mindful of that.

Speaker 2:

If you're joining an academy program, how long does it last? For I hate it when the new advisors ask me oh, can I be done in three months? No, it's not going to work. It's got to be at least a year, at least a year. Take your time, do it properly and you'll have more success, because being so employed if you haven't done it before, it's really tough. It's really really tough, sam, and I know you know this from your recruitment side as well. But we've seen it. We've seen people fail, we've seen big wins over the years and we've done this 25 years now. We're still changing the academy all the time. We're still improving it.

Speaker 2:

It's not a once and done thing, as a lot of academies out there are just set up because it's good pr for the network. It's not really well resourced because there's no profit in it for them. You know they're not a network sorry by corporates. They need people 100 grand a year straight away to make money With us. I suppose, being more patient with people, we're happy to support that new person and take the time and resource and energy to do that. But we're not going to get everyone, obviously, and we are really choosy because we want the right people to do this as well.

Speaker 2:

If you haven't got money behind you, don't bother. Resource yourself. You need at least six months in the bank. So if you're just going to do this on a whim and think it's a side hustle business, it really isn't that. Either if you're working, if you're doing another job and doing this on the side, you're never going to make enough money on the mortgage side or the ifa side to make it worth the time and the resource and energy as well as do that. You've've got to be all in or nothing. In my opinion, I know that's going to be. Some people think I've got other jobs, I've got this, I've got that. Fair enough, you've done well. But you must be working every hour of the day. That's not good for your mental health, it's not good for your clients who need to access you. So you've got to be all into this to work and you've got to think long term.

Speaker 2:

When you're joining a network or joining this industry, what permissions do you want? It's all in good going in as a mortgage broker from day one, something like that, something easy, something simple Get your CMAP, get your mortgage license. Someone will give you that. That's fine. But obviously we talk about wealth, right? We're talking about IFAs as well, right? So you might not think you want to do that now, at this point in your career, but if you want to do it in the next four, five, six, seven years, find a place that allows you to do that, because the worst thing that I find with firms for them is they get to a network.

Speaker 2:

They actually have a great relationship with them. They didn't want to get into wealth. Their network doesn't do it. Now they're sort of stuck to a rock and a hard place. Do they leave entirely and take the whole business over to a new network? They don't really know that well and that can really disrupt their business revenue and their pipeline. Or what a lot of them will do they'll set up a separate company under another network and then run under two principles, and that is just a bit of a mess, to be honest. So look for networks that have the permissions you want, not just now, but also in the future.

Speaker 1:

That's some really solid advice. No, I really really appreciate that and I think it's nice to hear some honesty as well. Now you know, don't bite off more than you can chew when it comes down the self-employed route. You guys aren't rolling out the red carpet and promising gold at the end of the rainbow. It takes time, energy and you need the resources in your bank account. Because it's funny, I get used to get approached by a lot of people used to say, like can I do this on the side, you know the side hustle culture. Yeah, it's like you really can't. You have to be a hundred percent in this you're doing trying to be a part-time financial advisor. It's just, it's just not going to work.

Speaker 1:

You might work your way towards being becoming a part-time financial planner, but in the beginning, yeah, that's different, but that's definitely possible that's definitely possible, but it's gonna take time, energy and really, really hard work for you to be able to build that business to a point where you want it. But it is one of those professions. It is one of those job roles where you can do that. You know you can work extremely hard and you can earn as much as you want to earn, and relatively quickly as well, if you are somebody that has a really strong network to lean into or perhaps you've got those transferable skills that are really really, really important. When you get into financial planning, there's nothing worse than someone saying, well, I've got the level four qualifications, sam, and now I want to be a financial advisor. And I sit them down and I'm like, okay, okay, let's just talk a little bit first before you run off to st james's place and start your own partner practice. Right, let's talk about it. What, what does your network actually look like? Have you ever sold anything before in your life? Do you do any face-to-face meetings currently? And you go through it and it's like nope, nope, nope, I've got my qualification, which means that it's like well, no, it doesn't work like that. So I think it's also kind of like have a bit of reflection and to see where perhaps your weaknesses actually are, and don't consider self-employed if you haven't tested the water yet.

Speaker 1:

It's a risky old game. It's even riskier when you hear about people who quit their jobs, then then join like an academy, start their qualifications, then, yeah, you know that to me is utter madness as well. Which is why I set up the Financial Planet Life Academy was look for $19.99 a month. Jump into my academy. Do your qualifications, get some soft skills and practical skills training. Don't leave your job. Find out first of all if this is actually just by dipping your toe into the community and speaking to others, if this is worth it for you. Start having a few conversations with companies to let them know you're in the academy, you're considering it, and then find your placement. Find a place to go. Don't just dive two-footed into the first thing that comes along and hope that that career transition is going to be the right one for you Because, as you rightfully pointed out, you're not going to make any money for six months yeah, exactly, you're absolutely right.

Speaker 2:

I think as well like you say, like you can definitely do the qualifications in, but with working and you're working elsewhere, that's not a problem. The qualifications now are so much better than they were before. So for both cii or the libf option, um, you know they're very flexible testing. Most of it's online. You can sort of take it in any order you like, so you don't have to do it in six months or three. You know you can do it in a year. You can do it over a longer period of time if you want to as well. So there's no rush there and it's a lot, lots less pressure, because we know a lot of people doing these sort of qualifications may not have done a test for a very long time, you know.

Speaker 2:

So doing a uni level sort of module of a degree can be quite intimidating. But I would say, people, don't, don't be intimidated. There's lots of great resources. Obviously, like what you you offer, sam, is is is very helpful to people. But even the exam bodies themselves will give you loads of content. Um, they have loads of modules you can work through and they're online online resources as well. So there's loads of stuff out there that will help you get through whilst you're working elsewhere.

Speaker 1:

Fantastic. So you talked about an academy at new. You know you've got an entry-level opportunity there. Um, can you talk us through that? Just give us a bit of an overview of what it is, what you do, how people could apply or be considered for it yeah, so the the academy is essentially brand new advisor, so new ifa.

Speaker 2:

Or it could be a current mortgage broker who wants to transition over to ifa and we would always say in that instance as well that they should probably give up the mortgage license so long that longer term they might not straight away. But realistically speaking, I've always seen and found that, um you know, ifas do better. They just focus on wealth and they can build mortgages into their business through brokers who are in the business still. So, so anyway they'll come through to us. They need to be diploma qualified. Um start, we don't do the trainee bit where you give advice whilst doing qualifications. Be honest, it's just too much regulatory oversight on that for us to do it. It's not worth. It's not worth it for us. So we wait to a diploma qualified first. We do do a diploma training course as well, which we do for internal members, so it actually only only is offered to people with us already. So let's read them, all these brokers within newly if they want to transition over. But then when the academy really gets going, we get signed off. Now, if you are brand new to the industry, we can't really set up an ar for you straight away. Um, it is possible, don don't get me wrong. There are networks that will do that, but we found that with the AR regime that came in December 2022, 2020, 2022, I went forward in time there Quite considerably forward in time With the AR regime, which no one really heard of. Brokers won't know about this, but networks definitely will. The governance rules that have been put on us for monitoring ARs and working with ARs is another level now. So, for a new person, for us, we just deemed it's not appropriate to put them in as an AR because of the rules that we've been given, and so we want everyone to be at least CAS. Now, that's a chicken egg situation. How do you start there? You can't be an AR on the network. How do you start there? You can't be an ar on the network. How do you start and then get casts if you can't be an ar?

Speaker 2:

So what we've got is an ar we've created centrally, which is we call it the academy, but it has got a sort of client facing brand, so to speak, and the advisor will join that firm and they'll be mentored. So they'll have a mentor allocated to them that will help them with all their meetings, but also that mentor will be there to you know, if someone are called need help, query on technical advice, whatever it might look like, they're there to help you. They work solely for us in that academy as well, so they're not working for anyone else. They're in my own practice. They are employed by us to do that job and then and then they'll go through that process of seeing clients getting signed off. We go through, we observe eight meetings, so get to CAS after that, but the mentoring doesn't end then. It goes on for another year and a half normally. So it's up to two years for the mentor to be in place, but we can look at an AR position afterwards. So once the CAS is achieved, that's when we can go right now the person's right to run a business themselves. Then we can look at doing it that way.

Speaker 2:

Now, whatever way they're with us, if we're under the Academy firm or their own AR, we don't own any clients, it's all theirs. They're bringing in these clients, they're their clients. We aren't giving them leads, obviously. That's not what we're here for. If you want to go m and g and there's other places that will do that, right, so they'll give you leads to then sell to their own customers their own funds, um, and there'll be some sort of attention money they give you for that. But the compromise then is you've lost the clients. They aren't your clients either. So there is that sort of flip up for coin that. What sort of person am I? Am I the one who can get out there and I the network, as you said earlier, to then really go for it and be a hunter and build this business and really put up the bootstraps and just go for it? It's the right mindset for that. You've got to be the right person. We try and find those people. That's what we're looking for.

Speaker 1:

How do you challenge them, though, when they come to you, what do you do to make sure that who's the wrong person? Right, you're not there going. Yeah, everyone come on in, we'll look after you all, because it's a bloody headache, isn't it, and it's tiring, and you have to put time and energy into those people, regardless if they're employed or self-employed. So you want to only really attract the right people with the right mindset. So what do you do?

Speaker 2:

What do you do to kind of qualify these people and what can we do to help them make that decision right now as to whether or not they should approach you, daniel, well, we do an interview process. So we do meet everybody face to face. We normally start on teams or on call, whatever, and we go through that process of understanding what they, what they want to achieve. What is the person looking to do? Do they understand what networks mean? So just to give a little context as well, like what they're getting into, and then we'll do the face-to-face meeting. If everything checks out, looks good, then we can progress to application. Now, the sort of person we look for we have been some point before. So a lot of people we talk to tend to have been business owners in their previous life, not necessarily with financial advice or financial services, but they've got that grit. Do you know what I mean? They're backspinning against the wall and they've got that sort of that dust from the brickwork on their shoulder.

Speaker 1:

I like it, you can see it.

Speaker 2:

They've done it.

Speaker 2:

They understand what it takes. So when you talk to them about this, they get it. They know it's going to be really hard. They need to be resourced. When do they need to have money behind them? Otherwise don't bother doing it. There's no point. You, you could be the best advisor. You could get all the blinds you wouldn't you think you can get. If you run out of cash, you're done. You're done for, aren't you? There's no way around it. Um, so, yeah, yeah, just just make sure you resource yourself for at least six months, because it does take a bit of time for pipelines to come through and it will take a bit of time for you to even attract clients in the first instance as well. We talked to a person about their potential client book. Now we work with a lot of new advisors who've come from sort of corporate roles where they've been working at high levels. They want to go. You know they've been a corporate founder, their structure, for a long time want to do something for themselves. They get it. They understand the risk. They've saved a lot of money as well, but they've got a lot of. So that can be quite useful and you can leverage to your contacts as well, very well.

Speaker 2:

If you're a mortgage advisor looking to get across, you've obviously got a great understanding of financial advice, how networks work. You get it already. It is a very different role being an IFA. Those guys are very much used to transactional sales. Client retention is a lot tougher in mortgages because the advisor is normally focusing on new customers all the time. Now, there's nothing wrong with that. Obviously that's what you've got to do. But if that advisor doesn't start building their business alongside these new customers coming on board, they start to lose the customers on the renewals and they don't get through. Don't review all their customers. They lose them on the back end. So it's transactional. You can do 200 grand one year. Next year you got to start again and do it all again and that can be tough.

Speaker 2:

Being an ifa obviously it's more like being I think it's more like being a coach actually to a client and it's not a one-and-done transaction. You are working with that client for hopefully a long, a long period, long term period, and therefore you have to go back to them. You can't miss reviews. You've got to do. You know they're paying. You're paying you fees to for you to talk to them on a regular basis and then, yeah, you are taking them through like a lifestyle changes. You're being there for them when they need help with, you know, building their wealth for the first, planning for retirement, working out how to live in retirement and then working out how to plan for the estate to be passed on. There's different life stages that we're there for to help them with, um, so some advisors need to get you know their mind around that becoming a coach can be a bit different.

Speaker 2:

It's a bit slow at pace sometimes. Actually, you haven't got that that issue with. I gotta get a mortgage done tomorrow because you know they're moving house next week. Forever. You gotta get you know you're on top of everything. But this is a bit more well, there's a bit on time, unless it's april 6th. Then you got deadlines. It gets busy. So overall, I think you know if someone was looking to do this, take take your time to consider your resources. Definitely. Think about your skill set. Do a skills analysis for yourself. Honestly, like I laughed about this the other day, someone made me do this for the ceo role I'm going to take on. I was like, oh really, I've got to do a skills analysis.

Speaker 2:

I'll tell you what it was brilliant, absolutely brilliant yeah, you know, it really makes you think about what you're right. You're not very good at, you know. Help your hands up. There's something's. I'm really bad, I've been forced for sure. But yeah, do that, understand, understand yourself and then and then think about the partnership you're going into. Do you need leads or do you do you think you can do it yourself?

Speaker 1:

that's what that's, that's what it comes down to if someone does need leads, you don't provide leads, but do you help them develop business or do you introduce them to anybody that can help them with leads? Is there anything you use that service? You offer at all.

Speaker 2:

So, yeah, so we can help them with. We do lots of like business coaching, training. So we do lots around, you know, helping you not just build your business, but also thinking about where do you get business from? How do you leverage your data as well, because a lot of the people we work with have got amazing data availability Maybe don't leverage it as well, because a lot of the people we work with have got amazing data available to them. They maybe don't leverage it as well as they could do. Mortgage advisors especially if you're thinking about becoming an IFA in the future. A lot of mortgage brokers will neglect the investments and assets the client will have because they're trying to get the deal done. Just don't do that, guys. Just start honestly, start taking that information. You know, keep it for a rainy day. You have it. You've got it for later.

Speaker 2:

Just record it because nowadays, on the tech we have, you can literally type in you know, segment clients out by how much money they've got in their bank account or that sort of stuff, so you can you've got the data in there. It's so easy then to do campaigns targeted to people way. I mean that now we're in another level. Now I don't show off the subject bit here, but someone told me about a sort of ai the other day. An advisor was saying oh, we're gonna be replaced by ai in five years. I said no, I don't think you will be. I said ai is not going to replace the advisor. The advisor that uses ai will replace you, and using ai and it's it's not as intimidating as it might look like it is and you can be, honestly, a new, a new advisor coming into this you could be head and shoulders above every other advisor that's been doing it for 20 years. Yeah, you've got the new practices that are going to really smash your business going forward.

Speaker 1:

I also think it's about understanding the prompts when it comes to AI as well. So if we take chat GBT for, for instance, the more I have been using that and building like a a chat bot, if you like, that understands me, my personality, the things I talk about, the things I do. I'm in the process of of of actually taking every transcript from every single financial plan of life episode.

Speaker 1:

I've gotten chucking it into and so I've got a lot of all the episodes and all the conversations I've had, so I can ask it questions.

Speaker 1:

People can ask me questions on my website, for example. You know I can feed information into it. Yeah, but I do think it's about how you communicate with it, and I think what will probably happen is you'll get a lot of these kind of financial plan of life chat, chat, uh ai engineers. I think they will come in and they will help advisors create the best prompts and use it in the correct way, and a lot of it is built into the, you know, into the systems now and into the crms. It's being used in that efficient way. But, yeah, you know, an advisor that was could be used to just dealing with 50 clients could could see if I could have 500 clients, you know exactly you can do.

Speaker 2:

It can really help you grow your business and on your. We haven't got to add more advisors into your mix either.

Speaker 2:

You haven't got to be five, six, seven advisors so you can do it yourself. Yeah, that's, that's true, um, and the other thing that is going to help with as well is is is when you're doing things like I mean, it's actually, it's actually tools out now, but you can do this. Now. You do a fact finder with somebody and there's apps that connect into things like teleflow, which literally listens to the conversation. It pre-writes the fact find for you, will give you a free recommendation based on what you're talking about. Yeah, give you prompts and ideas of what sort of products they might need I mean wow, this is just a start.

Speaker 2:

I mean, it's so good eventi does that really well one bit of venti and then you've got.

Speaker 1:

Um. The one thing that really interested me as well was, from a compliance perspective, was machine learning. Yeah, so if you're having a conversation with a client over video right, and this is the thing as well. Right, you know, you know video, video shouldn't replace face-to-face meetings. Well, it's like you tell me like video would be a great thing when you're able to have machine learning that can pick up on specific things someone's saying to see whether or not they're vulnerable clients. Have you missed something? And also how we train people. We can pick up on things that you can do better in the next call where you might have missed an opportunity, where you might have missold you know, where you didn't say the right thing, and I think that's incredible as well. So I think, where we like, oh no, you've got, it's like I've joined this international financial planning company people like, well, you know you can't not see your clients in the uk, and it's like, well, you can still see people, you can still give advice over, and do you know reviews with people over over?

Speaker 1:

yeah, of course, yeah and it's like yeah, but that's not. You know, that's's like well, as time goes on, that's probably the way you're going to be doing it.

Speaker 2:

Exactly I was going to get a point actually about that. The customer base, the customers are changing now. No, it's not about oh, they want. All clients now use smartphones. We all do, it doesn't matter how old you are, we're all used to, and the way to communicate with people is going to change dramatically, especially the younger ones coming in as well. So if you're not using apps, you're not using tools that help engage them not face-to-face, they might not want to see you face-to-face. They want to be seeing things quickly and you've got to be ready for that. People need to be not relying on emails.

Speaker 1:

Just look at the banks. No one walks into a bank anymore. I want to be able to do a telephone call through my app on video with somebody. You know I don't want to have to walk into a bank. Who wants to do that? So I think it's just exactly the same way that we deal with anybody. Really, it's going to be just the way that I would want to deal with it. I'm pretty sure that's the way my daughter is going to want to deal with it and she's eight years old. You know not enough financial planners. So I do think there is this kind of amazing opportunity for mortgage brokers to switch over into financial advice. Have you got some huge success stories around that? Are you seeing that happening and you can sort of. Can you talk about some of those successes?

Speaker 2:

Mainly for us. That's like how we've grown over the last 10 years. We've mainly built the IFA side because of the mortgage brokers that are with us and slowly but surely, encouraging them to transition across. Yeah, I've got some really good examples. This is a guy called Byrose. He runs a company called Sterling Welsh which is based in well, you can probably guess where he's based Down in Cardiff, swansea but yeah, he's a big mortgage broker.

Speaker 2:

Before that was, you know, really very well. So then stop, and literally he you know he did this properly. He stopped one day. So, right, I'm gonna all day stopping mortgages entirely. He did have a team around him, so he's got three other buyers that work with him and he gave away all his leads to them. He impacts his income big time. But he had that vision. He knew that he's going to get more out of building the wealth side, for not just for him but personally, but also the business over the long term. And in two years he built up to 10 million pound of the management without even buying in a firm. You know this is all from the ground up um, making sure the team were leveraging it as well, that every minute they were having a great right of you in the appointment with our financial advisor for a free health check, all that sort of stuff. So he's built from the ground up, did it, and now he's earning really good money. He's bought to where he was before, but with way less stress, and this is something that mortgage brokers might not realize. But that repeatable income is so valuable you could actually build that and then sell that as well. It gives you an exit into your business.

Speaker 2:

If you've got a mortgage business, let's be real. There's no value in a mortgage business. There really isn't. Sorry to say I know you're probably hating me right now, mortgage brokers, but when you retire, there's value in it. Whilst you're working in it, of course there is. Of course there's no value at a time and it's really an introduce a book. That's all you can get out of it. Maybe 25 introduced lead, but with ifa, because that income is so valuable, people will pay for that. They'll pay good money for that. Uh, you know, typically, uh, four times is going right for a book. Now, 10 million. So what does this equate to? If you think about 10 million under management, an average ongoing fee might be 0.75. So that book is bringing in 75 grand a year to the advisor. So for every 10 million you're managing, you average a 75,000 pound gross income. So you can start the enormous value four times. It's not too bad, is it? When you retire?

Speaker 1:

No, I mean again, it's that you know, name an industry really you can go into and you can build an exit from start to finish really, really quickly. You know and I know people, I know people who've got up to 100 million.

Speaker 1:

Like really really quickly yeah yeah, you know, and you know, and like they're sitting there and I'm getting getting approached by some guys now that there was a girl who was in london, she was 27, she had 30 million under management amazing and she was like can I sell this to you? And we were like, well, yeah, we'll buy it from you. You can, you can come on be employed if you want, and we'll buy your book and you can have that the money from it to buy a house. And she was like well, actually do, actually do you know what? I want to buy a new house, I want to buy a new lump sum. So we were like that's fine. So we started to like we're starting to talk to people who are like almost built up too quickly, but they want to release some of that money, but they want to continue servicing their clients and we're doing deals like that as well.

Speaker 2:

Yeah, that's really good. So, yeah, you don't get that in mortgages. So that's why I think a lot of mortgage advisors especially because, as well, the mortgage market is massively volatile with, like what yeah, you have no control over what happens. The market just goes up and down last couple years have been really tough brokers. So you have a downturn in the market because it's so transactional based that income's just gone and you've got to look for other ways to earn money. Well, ifa rule yes, you get volatility. Yes, we were impacted by the same thing, obviously, but because of a piece of income, I'm going to hurt your pocket so much.

Speaker 1:

No, things short-term pain, long-term gain yeah I think the problem of moving somebody from a mortgage role into financial advice is that short-term pain. They can't see it because it's so transactional, it's so kind of chase, chase, chase, chase, chase, chase. They can't breathe long enough to realize that in the long run I'm going to be better off. Yeah, because you're you're dopamine crazy, aren't you? You're chasing the next deal. Chasing the next deal because you've got to put, you know, bread on the table, and the horrible thing about that is is the more you earn as a mortgage broker, probably the more you're spending and when the market crashes, as we saw.

Speaker 1:

When you first got into um 15 years ago same as me 16 years ago you couldn't. You know everybody was a mortgage broker out of business that you couldn't move the mortgage brokers you go into like the reed website when I started recruitment and mortgage brokers everywhere but you couldn't place them into a job. So you know it does. It can be massively impactful. So I think mortgage advisors who have good books, I think one of the best things you said on here was like look, what have you got? How many clients have you got? How many introducers have you gone? How many introducers have you got and are you asking them how much? You know? Have they got a pension? Have they got any? You know what are you asking them?

Speaker 2:

Even things like you know I bet you've got directors of companies in there, you know. So get the directors like ring fence those clients understand their businesses, offer them other services, not just to them, but their employees. There's so many opportunities that you people don't realize they have, yeah, and easily find a partner can help you leverage that as well. So you know, that's what we can do with our advisors we can really help them understand their opportunities.

Speaker 1:

Yeah yeah, see, daniel, I think what we're going to take away from the um to finish this podcast episode off is just that you are a network, but you're a network that's experienced in taking on new people, yeah so, new people that want to start their own AR firms. Whether they've got cash or not, you will help them through that journey. But one of the best, I suppose, proven skills sets you have as a network is actually taking people from the mortgage side into financial planning, ifa, and you've got a lot of success story around that. Now we talked about at the very, very beginning, before this call. We talked about what you could do from a marketing perspective. And there we go, talking to people in your network that have transitioned from mortgage advice into financial advice. There lies a niche within a niche within a niche.

Speaker 2:

I know Exactly. Yeah, it's true.

Speaker 1:

How many mortgage advisors are there in the UK?

Speaker 2:

Gosh. I mean, there's a lot of them. I think Is it like 40,000, 50,000 or something. Maybe that's only too many, maybe it's less, but yeah, there's a lot of people there who could do this and could help the other nice people as well. You mentioned it earlier about the number of wealth advisors. I think you just made a comment about how they are reducing. The number of advisors in their wealth site is reducing. It has been for a long time. There's not enough advisors to go around all the potential clients, and I think what's happening now is everyone's just selling their books to each other, so it's not actually helping other clients. You're just servicing ones that are already there. So there's loads of opportunities to actually just find new people. Find new people, find new customers as well and yeah, frankly, there isn't enough advisors.

Speaker 2:

So, no, those guys aren't getting advice because all we're doing is looking after the books that we already have, and it's cycling around each other we've got.

Speaker 1:

We've got about nine, nine and a half thousand, I think, power planners and, uh, about 80 percent of those are women. So we talk about a lack of females in the in the profession shed load of women who are in power planning roles. That, if I think, some of those happy power planning fair enough, but some of them probably want to be trained up and coached and um so they've got great advice, um, they've got great knowledge.

Speaker 2:

They really understand the sort of that back-end process, but also they know they get the funds, they know that they get the advice side.

Speaker 1:

So, yeah, certainly some some power planners will make really good advisors for sure and it's like a lot of women there could, could set up as well, and we can top it up with the guys and girls that are in on the mortgage side. They want to transfer across into financial advice and it's to me it's the perfect transition. You've just got to get your head around it and change your mindset and, yeah, once you've done that, you're away, really, and, like you said, give yourself six months, and it might be 6, 12, 18, 24 months, but after 24 months you'll be picking yourself back up again. You'll be thinking hang on about, I've got some recurring income coming in, I get this now I get it.

Speaker 2:

I don't know you're wrong not. Most mortgage brokers will still do mortgages as well, so they'll think of a bit of time to just turn it off. I mean, the example I used with die rose was you know, he's a special character. I mean he's sort of guy would do that. He's got the right mindset. Um, but most people do probably will take a bit of time and that's fine, there's nothing wrong with that either. It just makes it longer to build funds up, that's what?

Speaker 1:

I suppose a guy recently to 63 million under management. He's at SJP, but yeah, you know, he was told don't do mortgages, don't do mortgages. And he was like, well, I got put food on the table so he did mortgages. And he was like, well, I got put food on the table so he did mortgages and protection and built his book from mortgages and protection.

Speaker 1:

So it does work transitioning from mortgage and protection. You don't have to give it up straight away, you know. You can just ease it across and make a living and do well, because I've spoken to people who've done it.

Speaker 1:

So, yeah, I think, um, well, there we are, there we. This is the purpose of the podcast, really. We've established that if you're a mortgage advisor right now, consider getting into the financial planning profession. It's lucrative, it's more secure than it is in mortgages, but you need a good network to join. So go and join me. Great way to end. And I'm not even on commission. What? No, yeah, it's not at all. It's not.

Speaker 2:

I'm too bloody good these days mate, I give away all my ideas.

Speaker 1:

You know everything, man and you'll thank you so much for your time today. It's been a real pleasure talking to you and learning about newly. Thanks very much, mate. Thanks.

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