Stuffed with client expectations and wrapped with a red tape bow, the financial services industry changes slowly, deliberately. But Leon Buckley, a partner of Financial Planning at Tilney, embraces innovation. In fact, he thinks technology has pushed financial planners to give the most quality advice they can give.
But we’ll back up. Buckley is a chartered financial planner (CFP) who has spent nearly twenty years in the financial services space. An early adopter of financial forecasting (aka cash flow analysis), he’s no stranger to seeing how an industry can shift - and meet resistance along the way.
We spoke to Buckley about what that means for both advisors and clients, what gives him a competitive edge, and what makes his strategy unique in today’s current financial services climate.
Few industries come under as much microscopic scrutiny as financial services. But how has the industry majorly shifted over the years?
“The concept is really simple,” says Buckley. “Now we have financial planning as opposed to what used to be born out of an insurance market: one person flogging a product. This has massively resulted in general professionalism, and turned an industry into a profession.”
So what exactly has changed?
“Everything,” Leon says. “It’s simply the way of thinking how we advise clients.”
Buckley asserts that he’s less of a product salesman, more of a big picture financial planner. Clients come to him with a fragmented view of their finances, and he helps them meld the shards into a cohesive structure:
“The way people structure their finances is ad hoc - bit by bit. Imagine going onto your shelf, getting a jigsaw puzzle, and tipping it onto the table. Some bits will fall off the table, there will be bits from other puzzles, and there will be bits missing. My job is to make sure all the right bits are in the right place.”
The last - not the first piece of the puzzle is a financial/investment product.
According to Buckley, it isn’t just clients who have been viewing financial planning from a limited perspective. Buckley says many financial advisors are guilty as well:
“Unless you’re doing long term forecasting, you can’t assess the long-term pros and cons.”
One common example of the shortsightedness Buckley gives is with an insurance bond. Insurance bonds can absolutely have a place in a plan. But while a certain bond might look good over a five, ten, or even twenty-year period, Buckley explains that the best way to examine a financial decision is how it will affect someone over the course of a lifetime.
But is the industry moving past two-dimensional “planning” and moving to onto wholistic financial planning? Buckley says yes, and that it wouldn’t be possible without financial forecasting. Advisors need to embrace it to truly bring long-term value to their clients.
“I’m flabbergasted by how few firms use financial forecasting,” Buckley explains. “I think a lot of people will only touch the surface of what it does - use it to show a few pretty pictures, and that’s it. They don’t understand how the industry has changed. They’re focused on pushing product, not planning. Financial forecasting can be used to show clients what they need.”
With MiFid II here, many financial advisors need to compensate further to give their clients worthwhile value. According to Buckley, transparency isn’t a concern of his. But one challenge that could present itself is having to frequently alert clients during market declines.
“If you have a lot of sharp falls in a short period of time, you might find that you’re sending a lot of reports to clients. The reason behind that is good: keeping clients informed, but it’s also driving a short-term view in terms of investing assets.”
To neutralize the panic, Buckley checks in with his clients on a personal level:
“You speak to clients up front and frequently, and again, a big part of that is modelling. Modelling catastrophe events in advance to test a client's response and their capacity helps to settle them when markets are falling; it's easier to say ‘this is where you are. You’re fine.'”
In general, Buckley says he spends much of his time being a sounding board for his clients when they’re making decisions:
“My clients will pick up the phone to ask me about a decision - starting a new business or even home renovations. A lot of the time what we all want to do is say out loud what we’re thinking and gage someone else’s response, and we want someone who is neutral and independent of the process.”
A mixture of listening and SWOT analysis helps Buckley not only guide his clients toward the proper decisions, but also fortify the trust between them.
“Financial forecasting software has revolutionized the profession,” Buckley states.
He says there was a fair bit of resistance to change until 2013, when regulations made it mandatory for financial advisors to declare their fees up front, instead of burying them. The onus then became on advisors to truly deliver value.
Buckley explains that when clients fully understand the fees they’re facing, they demand more out of their advisors. Voyant helps him deliver.
“Voyant has boosted the quality of advice to clients. You can now compare one strategy against another - what happens if I invest in this bond? What happens if I write my will to my kids and I die when I’m 55? You’re delivering value. The client can say, ‘wow, you’ve protected me against this financial risk. You’ve made me better off this much more financially.’ Most importantly, we deliver that sleep at night factor. Clients can now see the value of advice.”
“Anything that’s wet and in a glass.”
Follow Leon on LinkedIn.
