Mattioli Woods PLC - Financial Planning Newsletter

Ian Mattioli in the early 90s Bob and Ian receiving their MBEs 13 BW You’ve heard me say before that I think we’re in such fast changing times, far faster than even the 20th century, and you can see that come through in our younger consultants can’t you. Because we would struggle to do business with people we hadn’t met but they don’t. And there’s a new generation growing up who are used to dealing with things online. IM So even though the way we physically do things might change, actually underpinning it is still the old values. We like to know everything about a client first. We need to know everything because we can’t really advise until we know everything and it’s always been the case. I remember one of our original clients, I think it took six to eight weeks just to review all their 45 different pension plans! BW I think you’ve got that wrong, I think it was 47! IM 47! But that family are still clients today and it’s not just mum and dad who are still around but their children are clients and the children’s children. BW I think what we’re doing now, and what we’ve always done, is even more important because everything has become more complex, things are faster moving, markets are faster. We’ve seen more government legislation affecting what we do, whether it’s pension legislation, than ever before and therefore it’s really important that clients’ affairs keep up to date. How do you feel about all the information – and technology - that appears to be constantly changing? BW Well I think in a fast-changing world it’s absolutely essential that clients have an adviser that absolutely is up to date in terms of what’s going on. In terms of the investment space, when you go back to the days when with profit policy was still a core part of a client’s affairs, well that just doesn’t cut the mustard anymore. And you have to be really clued up in terms of where markets are. IM And agile. Markets change minute by minute. I’m not saying investment portfolio is changing because they don’t need to but sometimes, you do need to make some changes across the portfolio. BW I think one of the most interesting sort of aspects and changes in investment planning is that the whole concept of risk has changed so people who want a low risk used to be able to still get a good return. Remember the days before the credit crisis when sovereign bond yields were four or five percent and now they’re almost into negative territory. IM I remember when we were in the garage we started to develop what is now called MWeb, which is our operating platform, which was well ahead of itself. Now we look back and we used to hold assets in paper form didn’t we, physical certificates! We used to have a bank safe where we had to file them all but MWeb enables all of our clients to see online the assets that we are managing for them, and that’s been a massive change. I find myself every three or four days just clicking onto all the links and finding out how my investments are doing. BW I think that’s one of the biggest challenges for the whole industry isn’t it. Because everybody thinks that there’s an all-singing, all dancing platform out there and that’s whether you’re a wealth manager, into banking, whatever. The reality is it doesn’t really exist yet does it because internet technology is still quite fragile. I’m really glad that we developed our own platform because at least we know that it’s solid and it can be trusted. IM See this is a complex one for me because those people who know me, I am not really an investment manager. I’ve looked after people’s assets but I prefer the planning aspects of it. If I look at my own investments actually I want other people to tell me what to do rather than trying to work it out myself. And I think that’s one of our USPs isn’t it, that we are prepared to understand what clients’ needs are and then give them advice based around those needs and give them the information, the products and the investment strategies that goes with all of that. BW That’s why I think we’ve got such a really interesting and promising future because obviously with so much talk about robo advice, the idea that you sort of plug in your details into your laptop and out comes the answers to how you should be investing your money. I think it’s fine up to a point but the point that you’ve just made, and I think is so valid. People who are aspirational, already have substantial wealth, financial planning is really complex and the one thing that robo advice will never do is really understand the person. Well not for many a long year. That’s why I really think there’s still a strong need for personalised advice. IM I think that’s really relevant because every person is different, every family is different. So the outcomes are just tweaked aren’t they. I’ve always loved saving but now nearly 60, I actually prefer to spend a bit so the flexibility I’ve created with saving all of those years now gives me the ability to do the things that long term, I’ve wanted to do. One of the only things we have in common in reality is our love of fishing. BW I think it’s fine up to a point, but the point you’ve just made I think is so valid. IM Sport yeah, that’s right. BW But I think one of the things that I’ve learned as a wealth manager and a pension consultant is that the closer you get to clients, the more you know them. The deeper you get to know them, the deeper you understand them. Actually that is a two-way thing. And their own perceptions and their own objectives gradually shift with time because you’re educating them. And it’s that education that actually influences how they see the world. IM One of the things I look back on is they (our clients) were far more smarter than I was at the time, but they had worked it out at 20 years. Hopefully I would be equally smarter, because that’s when they would need the absolute help and we’ve been able to honour that. I think, because they’ve got older, we’ve got more experts and been able to deliver more of the things that they and their families actually need. 12 “..even though the way we physically do things might change, actually underpinning it is still the old values. We like to know everything about a client first. We need to know everything because we can’t really advise until we know everything and it’s always been the case.” Ian Mattioli