1. Luck can sometimes shape your career
Etheridge started his career aged 16, training in general insurance with the Royal Insurance Company, where he progressed to a more senior role, thanks, he admits, to a stroke of luck.
It came about after he had decided to leave the company. “Unfortunately the cost of travelling 25 miles each way to and from work each day was eating into my income. I needed more money to make ends meet,” he explains. “Eventually I handed in my resignation with the intention of applying for a short service commission in the army.
“Three days later at a meeting with my manager I was told that ‘by pure chance’ a vacancy had arisen in the Royal’s head office investment department, and, if I passed the interview, my salary would be doubled. He described this as a wonderful opportunity, so I moved to Liverpool to work [in that role].”
2. A fee-based service model can work
It has its sceptics, but Etheridge is a big advocate of a fee-based model for financial planning services. The Prestwood advisory business uses cashflow software to provide such a service, charging an hourly fee, with a minimum fee to be paid monthly for the firm’s services.
He recalls: “We wanted to be fee-based from the outset when we started 40 years ago. I can remember only one objection to fees in all of the years of being fee-based. People say to me that clients won't pay fees but I’ve proved that is not the case. What matters is that they are given excellent value for money.”
3. Don’t look back
Etheridge emphasises the importance of looking to the future – and does not believe in having review meetings. “All our client meetings are planning meetings,” he emphasises. “We always look forwards not backwards.”
Founder and Chairman of the Prestwood Group of companies, including Prestwood Software
PIA Rules Committee and PIA and FSA Small Business Practitioner Panels
Towry Law – Managing Director of Midlands company office
He does, however, believe in demonstrating value, providing a full breakdown of charges that clients have paid him for his advice in every meeting.
4. Take more care when taking on clients
In general, advisers need to use better criteria when deciding whether to take on a new client, urges Etheridge. “Most advisers don't start off on the right foot at all. In discussion it often appears that almost the only criterion advisers had was that the prospect was breathing at the time!”
Then there are clients who planners think are profitable – or at least might be in the future – and these planners end up with a mix of clients who they like but who, for various reasons, are not profitable. According to Etheridge, this is often due in part to a lack of regular analysis by the planner.
5. Hire a paraplanner
Etheridge is a big fan of paraplanning and puts much of his own success down to his paraplanner – his son, Richard Etheridge.
“Paraplanners and planners need to work together for the best client outcome, explains the elder Etheridge. “Everyone has different skills and those skills should complement each other for the benefit of the client.”
The key word here is ‘relationship’. “Looking forward it is important that we get the message out there that dealing with wealth is not just about dealing with money and numbers, it is also about relationships.”
Read the full interview in the September print edition of The Review. All members, excluding student members, are eligible to receive the quarterly print edition of the magazine. Members can opt in to receive the print edition by logging in to MyCISI, clicking on ‘My account’, then clicking the ‘Communications’ tab and selecting ‘Yes’.