“What would I do if this person were my mum?”
After establishing a new client’s financial goals and needs, this is one of the first questions David Hearne, Financial Planner and Wealth Manager at Satis Asset Management, asks himself. It seems a good starting point for any type of work, although Hearne, who has tried his hand at retail management and financial software sales as well as financial advisory, admits it took him a while to settle on this type of person-first approach.
Hearne moved into financial services after deciding that he’d like “more control over [his] earnings and time” at the age of 21. This led him to Lloyds Bank, where he was taken on as a financial adviser. Hearne saw the financial services sector as a “blank page for which you need knowledge and clients, then away you go to make some money”. To sharpen and expand that knowledge, Hearne later moved to a company that sold financial software. “It gave me a great background in corporate structures, commercial planning and dealing with finance directors, and learning to consult, advise and sell,” he says.
His next job was a five-year stint as an adviser at HSBC Commercial Banking, but when cracks started to emerge in the bank’s plans for the Retail Distribution Review, he made the bold decision to jump before being pushed. “I realised that the industry was going through a big change, and I wanted to be in control of where I would end up.” Hearne laughs as he explains that the decision cost him a lot of money, which was probably less funny at the time. “Recognising that change, joining the CISI and IFP and realigning myself as a financial planner is something I’m very proud of,” he says.
Bending the rulerHearne’s slightly unorthodox route to where he is now – advising financially comfortable 50-somethings on how best to prepare for retirement and pass on their family wealth – puts him in a unique position. His varied skills and interests mean he has been a member of both the CISI and the IFP for a combined total of ten years, and he has been in favour of a merger for some time. In 2013, Hearne was elected to the committee of the CISI Wealth Management Forum, in part to promote financial planning within the CISI. Of course, with the merger now complete, his wish has been granted.
“I have always seen the CISI and the IFP as at the pinnacle of different parts of the spectrum”When describing the merger to fellow members of the IFP, who went to him with their questions because he knew the ropes at both institutions, Hearne used an interesting simile. “I referred to the merger as being like a ruler,” he says. “The financial planners are at one end – they’re perhaps more worried about the people than the money. The asset managers are at the other end and they’re interested most in managing the money.
“The merger has bent the ruler around, so that the two ends have come together as one professional body.”
He speaks passionately about the merits of each institution. “I have always seen the CISI and the IFP as at the pinnacle of different parts of the spectrum,” he explains – the former IFP as the best place for understanding the needs of and agreeing plans with clients through financial planning and paraplanning, and the CISI as the best place for securities analysis, regulation and technology. Above all, he says, the members are the biggest asset of both institutions. “I think the bodies are what they are thanks to member participation.”
On his support for the merger, Hearne says: “My involvement has not been about being a representative of either side, but to share my experiences of both institutions. I think this has helped put some people’s fears at rest that the CISI is a good home for the IFP.”
Navigate and communicateAt Satis, Hearne and his colleagues support about 200 families, interpreting changes in legislation and regulation to plot a client’s financial route through the resulting landscape. Reaching financial goals is of clear importance to Hearne’s clients, but he says that the job is about more than that. It's about giving people confidence over their money and removing the fear of running out.
With the recent and substantial media focus on new pension freedoms and buy-to-let schemes, does he find it frustrating when a client responds disproportionately to something they have read in a newspaper? “One of the things we do constantly is help clients to either interpret, or ignore, the mass media, because newspapers can have angles, campaigns and advertisers in mind,” he says. “And they have to write something every day in order to sell their paper.
“Whatever the news is, it’s rarely something a client has to respond to today. We try to help people switch off from the noise.”
Another, sometimes challenging, element of Hearne’s role is helping parents decide how best to share their assets with their children. “Most of our clients are desperate to be fair. But children are born at different times, have different careers, marry different people, have different luck.” Whether parents should provide more for one child who perhaps needs the extra help is a decision only a client can make, but it is an intimate glimpse into a very personal aspect of a financial adviser’s role.
Advice gapHearne recognises that the financial advice he gives is generally reserved for those with a healthy bank balance. “I am fortunate to work in this world where our clients are quite wealthy,” he says. “Firms like ours help them to identify their choices, but unfortunately this is not economically viable for all.” On the issue of the ‘advice gap’, he is fervent that a lot needs to be done to even out the disparity. The UK Government has now started to collect evidence from around 400 financial advisory firms as part of its
Financial Advice Market Review. Hearne has moderately high hopes that this will go some way to address the gap, but he admits it’s not yet clear how things can be made more balanced.
“We need to find a simplified, low cost and perhaps light regulatory solution for those with basic needs,” he says. “It is hard to see how things will change other than through technology, whether it be an automated online service or receiving advice through Skype. Or perhaps banks will begin to offer simple advisory services once more.”
Financial education linked to skills Technology combined with financial education for children will hopefully help bridge the gap, he says, but it’s no use teaching ten-year-olds about credit cards, ISAs or what type of pension they can take out when they start work. “I’d rather see financial education linked to skills. Teach children to understand calculating interest or behavioural aspects, such as incentives, and how you can be cynical when someone is trying to sell you something.
“Most of all, I hope schools will encourage being inquisitive. Learning to ask the right question is better than being taught the answer to today’s problem.”
Perhaps these lessons will be next on the list of life skills Hearne is currently teaching his two young children. “Helping them learn how to swim, ride their bikes and settle into school are my top priorities for now,” he says.
Hearne hopes to start a Master's degree in financial planning next year. His dissertation, which he intends to turn into a book, will focus on fairness and how families pass on wealth to their children. He’d also like to help Satis grow and increase the firm’s specialist planning work with American expat clients. It seems that he is taking his own advice: “If you are well planned, there’s no need to worry.”