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Adviser Profile: David Howell of Guardian Wealth Management
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by Tim Cooper on Aug 02, 2013 at 12:10
David Howell, chief executive of Guardian Wealth Management, is in the midst of a grand challenge: to implement a UK lifestyle financial planning model across an international advice firm based in 30 jurisdictions, including Cyprus, Liechtenstein, New Zealand and Qatar. He is confident he can take it in his stride.
Growth at the firm has been strong and steady. Revenues rose from £6.5 million in 2009 to £9.7 million in 2012, and £10.6 million is projected for 2013. The firm has increased adviser numbers and active clients without having to shed many inactive customers.
Howell says the firm has not had to go through any major transformation as a result of the retail distribution review (RDR) because he has always run it as a financial planning business and has not accumulated many purely transactional clients.
‘Clients want a deep and meaningful relationship, not to be sold a product,’ he says. ‘They want us to find out where they are and help them get where they want to be, and use the tools to do that: understanding tolerance to risk, using a cashflow model to create a lifestyle financial plan that means something.
‘Advisers used to have a relationship with the money not the client. I think there is a new breed and a new model.’
Howell had his first taste of international financial services working in Australia for Allied Capital Group as a broker consultant, before returning to Provident Mutual. He was then introduced to SimplyBiz founder Ken Davy and became involved with the development of Davy’ previous network DBS’s regional offices.
The led him to meet two fellows of the Institute of Financial Planning (IFP), Michael Hague and Howard Gannaway at the Consultancy Group, and he later took over the IFP Leeds chairmanship from Francis Klonowski.
At around the same time, Howell was serving in the Territorial Army, including a spell in Bosnia.
He set up his own financial planning firm, Guardian, in 1994 as a one-man band (and his dog), but his international experience became extremely useful when he met international broker and current joint-chief executive John Hasbury.
‘John said it was not just about the UK because some of our clients worked for the United Nations and the EU, they worked in Brussels and Rome. So we said "why don’t we set up a company in Brussels",’ says Howell. ‘So we became regulated in Europe and set up an office together in Geneva, and then recruited and expanded by referral; then the Middle East and Far East, and that’s where we are today.’
Howell wants to use the UK to feed the other offices with trained planners through the certified financial planner (CFP) qualification, which is recognised internationally.
‘If they are CFP in Hong Kong, they will be CFP in other parts of the world. If you look at where the CFP trademark is recognised then that’s where we will expand,’ he says. ‘Our aim is to create an international financial planning practice. It would be cross-border, dealing with expatriates as well as the indigenous population and would be regulated in those different markets.’
David Howell: curriculum vitae
1994 - present: Guardian Wealth Management, chief executive
1990 - 1994: DBS Financial Management, general manager
1986 - 1990: Provident Mutual, broker consultant
Institute of Financial Planning
Personal Finance Society
Million Dollar Round Table
Chartered Insurance Institute financial planning certificate
Insurance intermediaries qualifying examination
International compliance officer certificate
Anti-money laundering training certificate
International senior management regulatory roles and responsibilities training and corporate governance certificate
Towards a uniform planning model
John Hasbury is based abroad but Howell is keen to play down any notion that the UK and international operations are significantly different.
‘John Hasbury and I are joint chief executives, hinge and bracket, a tag team. We complement each other in terms of strategy, in terms of thinking and that it is the UK model we want to use elsewhere in the world,’ says Howell.
Howell accepts that Guardian operates in places that are well behind the UK in terms of financial services reform, and where commission payment is the norm.
‘You can’t just change your business model in other areas of the world, because the market is not ready for it, the clients are not ready for it and there is a business to think of,’ he says. ‘So there is a transition to be fully fee-based but it is not going to happen overnight or you’ll go bust.
‘In the other offices we are using the commission to pay the fees, which had been done in the UK pre-RDR, so clients were getting transparent charges,’ he says, ‘We use the commission to offset the work. There is that journey but we have to be pragmatic about it.’
In Qatar, all Guardian’s advisers will have a qualification equivalent to level four by January 2014 and some will be level six qualified. Training will be the instrument through which the UK feeds and controls group-wide growth and quality, says Howell.
‘Our aim is to grow our own financial planners of the future by taking on graduates, which we have started doing, training them in the UK and overseas as administrators and paraplanners as a career path,’ he says.
‘You will know quickly if they are going to cut it [as an adviser], whether they can eat what they kill; if they have the soft skills to go out there and network or not. If not, they are still great people so they become part of the client service team.’
A key stage in the training process and in the support of existing advisers in the UK and elsewhere will be paraplanning. In a novel move, Howell will be using an outsourced paraplanning service to carry out the training.
Life planning ideas
Howell has also investigated the merits of life planning, as practised by US coaches George Kinder, Bill Bachrach and Maria Nemeth. He has been working closely with Nemeth and Wealthflow partner Duncan Glassey to develop ideas on how to integrate the deeply personal questioning style of life planning into Guardian’s financial planning model.
‘I like Nemeth’s style of questioning and how you engage with the client at that first meeting,’ says Howell. ‘And this is something we are looking at: that onboarding of the client and that discovery process. But should that person be a financial planner or a life coach? Or does that person wear both hats?’
Currently Guardian has no life planners or coaches working for it but Howell is keen to offer clients the option, even if that means passing them from a life planner to a financial adviser.
‘I have not quite decided yet,’ he says. ‘My feeling is you have a life coach, which is part of the onboarding process, who is qualified through the Nemeth model, and then the planner is aware of the questions that are being asked and what it means when you ask what a client’s life intentions are and their relationship to money.’
Guardian’s project of implementing financial planning across the group was originally going to be headed up by former IFP president Marlene Shalton. However, shortly after her appointment in June 2012, after leaving AXA-owned national IFA Bluefin, AXA alleged Shalton had solicited Bluefin clients to join her at her new firm in breach of a 12-month non-solicitation contractual agreement.
She left Guardian in November 2012, just five months into the job, and in July this year AXA confirmed the case had been settled. Shalton has now launched a new advice firm, Uniq Family Wealth, with two former Guardian advisers named as part of the business.
‘She is well respected in the financial planning world, a good coach and mentor,’ says Howell. ‘I have a lot of respect and admiration for Marlene but it wasn’t going to be and that was it.’
Strong client-adviser bond
Howell would not confirm whether Guardian is advising any of Shalton’s former Bluefin clients but says he expects life financial planning relationships to throw up more cases like hers as clients form increasingly strong personal bonds with their advisers.
‘The client is free to choose who they work with and who wants to advise them,’ he says. ‘I think the future will change in terms of the relationship clients have with an adviser. But you have other issues, whether commercial or contractual, and that needs to be thought through.’
Despite Shalton’s departure, growth plans continue apace and Guardian has retained Niraj Vyas as financial planning director. Vyas also came across from Bluefin.
‘He is in a development role for us… [and is] probably going to be focusing on other parts of the business in terms of the financial planning proposition. Now what we want to do is recruit specialists in different areas,’ says Howell.
Centralising investments for a global client base
Guardian has opted for a blended approach to investment, putting the core of client’s portfolios into passive vehicles with actively managed satellite funds.
Howell says this means the firm does not have to try to settle the debate with clients over whether passive or active management is the most effective investment style, and gives clients from the UK and elsewhere the flexibility to choose their own actively managed investments.
‘The clients can understand active and passive, and it is a big decision for them to make [to choose between] them. When some advisers cannot decide, how can you expect a consumer to? So give it to the experts where your core is passive but you want upside and that’s active but driven by asset allocation.’
Guardian uses Finametrica risk profiling to map out model portfolios while JM Finn & Co manages the money.
The firm also has a distributor-influenced fund, the Discovery Balanced managed by Quilter Cheviot. Guardian has been a co-sponsor of the fund for eight years alongside Winchester-based Antony Harding & Partners. The firms take an equal share on all decisions regarding the fund and sit on its investment committee.
Clients are put through a cashflow plan using Truth software and invested on one of two platforms, Transact or SEI.
‘Transact is good for trustees’ money, where we deal with lawyers and the money needs to go straight from the trustees to the client account. We use SEI because it is international.’
Howell says the process applies group-wide, meaning overseas offices will not be putting their clients into esoteric or unsuitable investments. ‘It’s a robust investment process. That’s the staple. You create problems in the future by investing in an esoteric fund,’ he says.
‘We are creating an investment committee. Where we do have many fund managers coming to us saying "what about this Brazilian rainforest fund", we could say "it looks OK but let’s put it through the process". If it comes out the other end in good shape then it will be a satellite fund or on the preferred or guided list. But it would not form part of [clients’] main portfolio; that’s outsourced to JM Finn or Cheviot, which manage the money. It would be kept on the periphery.
Core-satellite asset allocation
Guardian uses a core of passive iShares exchange traded funds. For peripheral active managed funds, JM Finn will choose the fund manager but it is driven by the asset allocation.
The firm’s use of JM Finn is recent. Until the past few weeks Guardian used various discretionary fund managers (DFMs), each of which would fulfil a different part of the mixed active-passive mandate.
‘We changed because we wanted something consistent and robust, and repeatable,’ says Howell. ‘In the past the DFM was [either] active or passive. Now our house view is a blended approach, and with the specialists we use we have mapped model portfolios that are rebalanced.’
Howell likes to fill his free time with worthwhile activities. He has worked as a local magistrate and undertaken a number of charitable adventures, such as cycling in India for the charity Whizz-Kidz, which provides mobility equipment for disabled children, and trekking the Rift Valley for a BBC documentary that took a class of troubled children from the UK to Tanzania.
Of his time serving with the Territorial Army when he was younger, Howell says: ‘Ever since I was young I was playing with toy soldiers. It wasn’t cowboys and Indians; it was getting camouflaged up so my mum and dad couldn’t find me.
‘I have served in different regiments. I have had attachments. I have had engagements and done various things around the world. I went to Bosnia, did attachments with regular units, jumped out of aeroplanes and done a bit of everything.’
He is also a member of Strategic Coach and Million Dollar Round Table, both of which coach businesses of all types in how to grow and succeed, and provide a forum for members to share ideas.
‘Don’t just think UK, but expose yourself to other thinking,’ he says. ‘Time is a cost, but I think its quality time you spend with your family, not quantity [that’s important]. You have got to decide how many conferences you are going to attend a year and one of those will be overseas. It costs money but it helps you as a person to develop and as a business.’
Family and farm animals
Family is important to Howell. He says he tries to share his international outlook with them, taking them with him on business trips, for example. His 17-year-old son is currently in Ghana doing charity work, building schools and teaching English.
At home Howell keeps a Vietnamese pot-bellied pig. This has led to pork being taken off the family’s dinner menu.
‘The pig was the only thing George Clooney and I had in common,’ says Howell. ‘His Vietnamese pot belly has died; mine’s still going. It’s called Pig. We don’t eat lamb and we don’t eat pork. They’re the pets.
‘My daughter is 13 and delivered a lamb this year, and when you pull it out, it gives you a different perspective when you put some lamb chops on the barbeque. The smell of lamb being born is the same as a lamb chop.’
Given his passion for giving something back and membership of professional and business groups, perhaps Howell could one day become president of his most cherished organisation, the IFP.
‘I would if I had the time,’ he says. ‘There are only so many hours in the day [though]. I wouldn’t do it justice. Who knows?’
Five top tips
Know today what you’re going to do tomorrow.
Take time to plan and reflect.
Have a great customer relationship management system: it’s the backbone of the business.
Spend quality time with family.
Attend Institute of Financial Planning and Million Dollar Round Table conferences.
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