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CONSERVATIVE CONFERENCE
12 October 2015IIssue N° 474
For professional financial planners
2. 34 STAR PROFILE
New Model Adviser®
I 12 October 2015 I citywire.co.uk/adviser
Neal Hall’s traditional values are winning local
plaudits, propelling the fledgling Atherton York
onwards and upwards
4. 36 STAR PROFILE
New Model Adviser®
I 12 October 2015 I citywire.co.uk/adviser
Atherton York uses in-house, bespoke portfolios
and 90% of its investments are passive.
‘In previous roles, I have used a blend of passive
and active,’ says Hall. ‘But a raft of active fund
closures, which caused many issues for regular
premiums and top-ups, and poor performance led
to the conclusion that passive is the way forward.’
The firm researches asset allocations using
eValue and uses the Vanguard LifeStrategy funds at
the core of portfolios, plus other Vanguard and
BlackRock funds as building blocks for more
bespoke needs.
‘I like Vanguard’s simple, straightforward
approach; its performance in hitting the indices we
want to track; low costs; and daily rebalancing,’
says Hall. ‘Plus the LifeStrategy funds are very
diverse with between 8,000 and 15,000 holdings.’
Hall occasionally uses active funds as satellites if
a client has a particular need or conviction that a
passive fund cannot meet. ‘However, I often find
that when you challenge the client, you find [their
ideas don’t stand up to scrutiny] and a simpler
approach is best,’ he says.
Hall has considered discretionary fund managers
but says: ‘I don’t see the cost and value trading off.
I understand that some clients would like that
highly bespoke approach, but it is not right for my
clients at this time.’
He has also looked at so-called smart beta
approaches but was not impressed. He agrees with
the comments made by previous New Model
Adviser®
cover star Kris Heck of London-based
Tanager Wealth (issue 471, Index Investing, p. 58)
that these products are ‘neither smart nor beta’.
‘That is because you are making decisions
through those biases and effectively become an
active fund manager,’ says Hall. ‘Just as active
managers can get it wrong, the market can beat
you if you make these strategic decisions.’
The Atherton York Balanced Portfolio
outperformed the AFI Balanced benchmark
in each of the last three calendar years.
Hall says: ‘I attribute this to having
heavily diversified portfolios and
keeping the costs of investment
low. The regular re-balancing of
funds would have avoided
portfolio drift, which would also
have contributed.’
Performance*
POOR ACTIVE PERFORMANCE AND FUND
CLOSURES LEAD TO PENCHANT FOR PASSIVES
Totalreturn(%)
20132012 2014
AFI Balanced
Atherton York Balanced
0%
5%
10%
15%
ACTIVE FUNDS
10%
PASSIVE FUNDS
90%
TIM COOPER
N
eal Hall, principal of Atherton York, is a new
old-fashioned type of guy. After setting up his
firm from scratch just two years ago, having
worked for a previous New Model Adviser®
cover star firm, the young adviser has made a success
from basing his modern model firm on traditional values.
Hall set up the business in 2013 and his only
employee is his wife Maria, who works part-time as
operations and marketing director and who has just
had their second baby. The firm, though London-
based, also makes a show of Hall’s northern routes
through its name, taken from Atherton, the maiden
name of his grandmother, who was ‘exceptional with
money’, and York, the city his family is from.
A recent accolade was scoring a coveted five out of
five on adviser rating site VouchedFor, ranking top out
of over 90 other advisers in his area of Enfield, north
London. But Atherton York is a small firm, without the
national scale or ambitions of his previous employer,
fellow London advice firm Lift-Financial.
‘I don’t claim to be brilliant,’ says Hall. ‘I just want to
have an honest relationship with clients. I deliberately
use phrases like “old fashioned” in my brochure and
website. Getting to the point where a client really trusts
you is satisfying, especially because trust has been a
big issue in our profession.’
The trust issue is partly why he has made a play of
the firm’s chartered status in its branding.
‘The aim was to create a high-end, chartered, new
model business. Corporate chartered status is a
positive differentiator as it demonstrates knowledge
and skills and that we adhere to the highest standards.
We talk about that at the first meeting, and it’s on all
our stationery and website.
‘I also make a commitment that any time the
Chartered Insurance Institute launches new
qualifications, such as the recent one on pensions,
I will attain them straight away.’
Driving it all was the entrepreneurial urge that often
defines the leaders of new model businesses.
‘I am lucky to have worked with some top people
but I had become frustrated as an employee and
looking back, everything in my career prepared me for
this,’ says Hall.
Neal Hall
CURRICULUM VITAE
CAREER
2013-present Atherton York, director
2009-2013 Lift-Financial, chartered
financial planner
2006-2009 Charles Reynolds
& Associates, IFA
2002-2005 Santander / Abbey National,
branch manager
1996-2002 Abbey National, financial adviser
PROFESSIONAL MEMBERSHIPS/
QUALIFICATIONS
Chartered Financial Planner
Fellow of the Personal Finance Society
Just as activeeveivetivctiactacs aas aast ast austusJu
market can beatateateabeaben bnancancat cetketkearkarkmamam
ddeciecisiosions.ns.’.s.’ns.onsoniosiocisicisecdecded
ortfolioooioolioolfortfoortoro
benchmarkrkrkarkmamahmchmchnchencenbebeb
r years.s.rs.arsareayeyer yr
vingggngingvinvi
NDND
PASSIVESSSSESESESVESVEVEVEIVIVSIVSIVPASSI
201441401202
SSIVE FUNDSSSDSDSNDSUNDUNDUNFUFUE FUVE FVEVEIVESIVSIVSIVSSISSSSSSS SDSNDFUNE F
eurial urge that often
l businesses.
h some top people
n employee and
areer prepared me for
Chartered Financial PlannerneanalncnFiedretertearthahaChCC rernennanPlaPll PialciancannaFind Federe
Fellow of the Personal Finance Societyetyoccenanl FonPerhef thofwlowelloFelFeF ytyietcieociSoSoe SncencancnaFinFinalnalonasonrsoersPePee Pthethofw oowllo
*Data is net of fund manager and platform charges. Dividends
reinvested
5. STAR PROFILE 37
citywire.co.uk/adviser I 12 October 2015 I New Model Adviser®
UP AND RUNNING: Starting a business six months after the retail distribution review came into force was perfect timing,
says Hall, as he had harboured concerns that the reforms could effectively destroy the profession
2013
2014
2015*
FUNDS
UNDER
ADVICE (£M)
PERCENTAGE
OF RECURRING
INCOME
TOTAL
INCOME
(£000)
2013
2014
2015*
TOTAL NUMBER OF EMPLOYEES
1
1
2
2013
2014
2015*
TOTAL NUMBER OF CLIENTS
32
68
105
2013
2014
2015*
TOTAL NUMBER OF ACTIVE CLIENTS
32
68
105
TOTAL
COSTS
(£000)
ATHERTON
YORK
I just want to have an
honest relationship with
clients. I deliberately
use phrases like ‘old
fashioned’ in my
brochure and website
Neal Hall Atherton York
Starting a business six months after the retail
distribution review (RDR) came into force was also
perfect timing, he says, as, interestingly, he had
harboured concerns that the reforms could effectively
destroy the profession.
‘That meant I could see that the sector wasn’t going
to collapse, which gave me additional confidence to go
it alone,’ says Hall. ‘I had already worked in an RDR-
friendly model at Lift, so I had a good idea of how it
would work.’
Hall has also been working toward the Investment
Management Certificate (IMC) but jokes that his study
was ‘rudely interrupted’ by starting a family and this
business.
He hopes to find time to complete the IMC because
‘investments are core to our business and in the new
pension freedoms era, an additional investment
qualification is desirable.’
But finding time for qualifications while running a
business, advising and coping with family demands is
one of those fundamental challenges facing small IFA
firms – no more so than since the RDR.
Hall concedes that running a small business has
brought added frustrations; he does all his own
administration and paraplanning, which takes five to 10
hours a week. Growth would seem to be one solution.
But, despite the difficulties, Hall wants to stay small, and
says he does not want to compete with the likes of
Lift-Financial, which has offices around the country.
Atherton York started out with just 32 clients, but
Hall has increased that to more than 100 over the last
two years.
The biggest source of new clients is accountancy firm
Mostons, located in the same office building.
‘Sharing offices with a well-established accountancy
firm has been a huge benefit for us,’ says Hall. ‘The
proximity makes a big difference. There are also
reciprocal benefits as all our tax work goes to Mostons
and we are helping with its auto-enrolment proposition.
‘Other sources of new clients have been client
referrals; lead generators Unbiased and VouchedFor; a
solicitor connection; and local marketing initiatives such
as joining the local chamber of commerce. We are very
pleased with that spread of sources. “Keep it local” is a
key phrase for us because clients like dealing with a
local firm.’
In the next 12 months, Hall plans to capitalise on this
feeling with a local advertising and marketing push.
Behind every great man...
Hall recognises the huge contribution his wife Maria has
made to fast-tracking growth in the company. However,
she is really only on loan as she is on maternity leave
from her role as director of marketing for a City law
firm. He plans to make best use of her skills before her
leave ends in April. After that he will lose a valuable
resource that would be expensive to replace.
‘Because Maria is in professional services, she gets it,’
he says. ‘We would not have been able to afford a
consultant of her level yet, so she has helped a great
deal. She knows all about market segmentation, and
“understanding your clients”. She is also good with
client communications, cutting through the jargon and
*projected figures
d
p
h
d
to
it
f
w
M
w
b
‘i
p
q
b
o
fi
b
a
h
B
s
L
H
tw
57 31 7 60
96 32 15 65
142 38 23 70
6. 38 STAR PROFILE
New Model Adviser®
I 12 October 2015 I citywire.co.uk/adviser
making it clearer. It has also been useful having
someone from outside to discuss ideas with.’
After April, he plans to take on another staff member,
either a well-qualified paraplanner or a junior
administrator, to free up his time for business
development. Hall also likes the idea of finding a
trainee or graduate adviser. ‘We have reached a stage,
having got some money in the bank, where we can
grow the business and dilute some of the fixed
overheads,’ he says.
Client experience
Atherton York has three levels of service:
‘transactional’, ‘advisory’ and ‘advisory-plus’.
Most clients are in advisory and receive annual
meetings; those in advisory-plus are offered two
or more a year.
Clients have the choice of fixed, hourly
or percentage-based fees. Hall calculates
fixed fees against the hourly rate of £95
per hour.
‘Most clients prefer fixed fees, as
they like to know the cost at the
outset and to have a cap.’
If ongoing clients choose a
percentage, it is 0.5% for the vast
majority. However, Hall says an
increasing proportion prefer to pay
a retainer fee or an hourly rate.
‘Maybe clients are more switched
on to fees these days and £100 a
month as a retainer is easily
understandable.’
He says £95 an hour looks good
value, especially in London, where some advisers can
charge over £300.
Hall chose this fee because it is low enough not to
‘put people off’ but is still enough for him to earn a
comfortable income. He points out that it includes
paraplanning and administration, which he does himself.
‘I am happy to work on that basis,’ he says. ‘However, it
is massively important to know which clients are
profitable and which aren’t, so I time-record each job
for each client.
‘In setting up we had to be all things to all people, but
we are beginning to find a niche in this and surrounding
postcodes; and we are building a specialism in
retirement planning.’
Atherton York has achieved a 70%
recurring income already and Hall expects
that to keep climbing.
The firm has very few transactional or
pay-as-you-go clients. ‘Everyone who
has come on board, with two
exceptions, pays an ongoing
fee,’ he says. ‘Some people
haven’t been as receptive,
and at the next review
we will discuss
whether financial
planning and our
services are right for
them. If they don’t
use the services,
I will not take a fee
from them.’
Playing the long game
The firm’s income has also
climbed quickly from £57,000
in the first full year to
£140,000. ‘That income is
modest for a London firm
though,’ says Hall. ‘We can add
another £50,000 to that next
year, and get near to £200,000
income with £50,000 costs. At
that point it will become
important to find someone to
support me while I do more
farming and harvesting.’
He says his main targets apart
from recruitment are to work more
intelligently, become more
automated, and improve client
communications.
‘I would like to increase our quarterly
newsletters to every other month with a
more automated process and a
campaign monitor system to give us
more information about each,’ he says.
‘The client review and the on-boarding process needs
to become smarter and less reliant on me. In the next
three to six months, we need to be sharper on cashflow
modelling. We don’t use it much yet – just via a
spreadsheet. I will be looking at alternatives.’
Hall has no longer term plans beyond these, however.
‘This is evolving and I am keen to avoid the mistakes
that I see some businesses making – growing too
quickly and losing control and sight of their core values,’
he says. ‘I am playing a long game in that sense.’
‘I’m 41 so I have at least 20 years to go. It would be
great if this business lasts beyond me, but that is a long
way away. The accountancy business [next door] is a
family business – that is a great model, which I would
like to follow.’
Family circle
Work-life balance is tough with young kids at home.
Hall has had to work most weekends and many
evenings since starting up. ‘But it has been rewarding,’
he says. ‘Fortunately, you get some notice before having
a baby, so I did 85% of my client reviews in the first half
of this year before our second child was born.
‘I am pleased with the way things have gone. When
we set this up, we wrote a three-year business plan and
exceeded our two-year targets by 20%, so we are ahead
of schedule.’
Hall does have time to spend keeping fit, however,
and he runs at least two half-marathons a year.
‘One of my tips is to look after yourself because in a
small business you are the business,’ says Hall. ‘I’m at
the gym two or three times a week, and I run from
home to the office and back. However, I can’t do too
much as family is important and I am needed at home.’
Reflecting on how grandmother Atherton would have
felt about the success of the business so far, he says:
‘She would have been really pleased and would have
encouraged the innovation. But she was very modest,
as I hope I am, and would also say there has been no
“success” yet.’
5 TOP TIPS
I am keen to avoid
the mistakes that
I see some businesses
making – growing
too quickly and losing
control and sight of
their core values
Neal Hall Atherton York
overheads,’ he says.
Client experience
Atherton York has three levels of service:
‘transactional’, ‘advisory’ and ‘advisory-plus’.
Most clients are in advisory and receive annuala
meetings; those in advisory-plus are offered ttwo
or more a year.
Clients have the choice of fixed, hourly
or percentage-based fees. Hall calculates
fixed fees against the hourly rate of £95
per hour.
‘Most clients prefer fixed fees, as
they like to know the cost at the
outset and to have a cap.’
If ongoing clients choose a
percentage, it is 0.5% for the vast
majority. However, Hall says an
increasing proportion prefer to pay
a retainer fee or an hourly rate.
‘Maybe clients are more switched
on to fees these days and £100 a
month as a retainer is easily
understandable.’
He says £95 an hour looks good
for each client.
‘In setting up we had to be all things to all people, but
we are beginning to find a niche in this and surrounding
posp tcodes; and we are building a specialism in
retirement planning.’
Atherton York has achieved a 70%
recurring income already and Hall expects
that to keep climbing.
The firm has very few transactional or
pay-as-you-go clients. ‘Everyone who
has come on board, with two
exceptions, pays an ongoing
fee,’ he says. ‘Some people
haven’t been as receptive,
and at the next review
we will discuss
whether financial
planning and our
services are right for
them. If they don’t
use the services,
I will not take a fee
from them.’
Playing the long game
The firm’s income has also
climbed quickly from £57,000
in the first full year to
£140,000. ‘That income is
modest for a London firm
though,’ says Hall. ‘We can add
another £50,000 to that next
year, and get near to £200,000
income with £50,000 costs. At
that point it will become
important to find someone to
support me while I do more
farming and harvesting.’
He says his main targets apart
from recruitment are to work more
intelligently, become more
automated, and improve client
communications.
‘I would like to increase our quarterly
newsletters to every other month with a
more automated process and a
campaign monitor system to give us
more information about each,’ he says.
‘The client review and the on-boarding process needs
to become smarter and less reliant on me. In the next
three to six months, we need to be sharper on cashflow
modelling. We don’t use it much yet – just via a
spreadsheet. I will be looking at alternatives.’
Hall has no longer term plans beyond these, however.
‘This is evolving and I am keen to avoid the mistakes
that I see some businesses making – growing too
quickly and losing control and sight of their core values,’
he says. ‘I am playing a long game in that sense.’
‘I’m 41 so I have at least 20 years to go. It would be
great if this business lasts beyond me, but that is a long
way away. The accountancy business [next door] is a
family business – that is a great model, which I would
like to follow.’
Family circle
Work-life balance is tough with young kids at home.
Hall has had to work most weekends and many
evenings since starting up. ‘But it has been rewarding,’
he says. ‘Fortunately, you get some notice before having
a baby, so I did 85% of my client reviews in the first half
of this year before our second child was born.
‘I am pleased with the way things have gone. When
we set this up, we wrote a three-year business plan and
exceeded our two-year targets by 20%, so we are ahead
of schedule.’
Hall does have time to spend keeping fit, however,
and he runs at least two half-marathons a year.
‘One of my tips is to look after yourself because in a
small business you are the business,’ says Hall. ‘I’m at
the gym two or three times a week, and I run from
home to the office and back. However, I can’t do too
much as family is important and I am needed at home.’
Reflecting on how grandmother Atherton would have
felt about the success of the business so far, he says:
‘She would have been really pleased and would have
encouraged the innovation. But she was very modest,
as I hope I am, and would also say there has been no
“success” yet.’
TOP TIPS
control and sight of
their core values
Neal Hall Atherton York
Have a strong vision. Look at your own
values and embody them in your business.
Focus on knowledge. Achieve the
highest level that you can and always be
up to date.
Be your own boss. It is rewarding and not
as difficult to do as others would lead you
to believe.
Know and live your business plan. Make it
robust, update it quarterly and set targets
that will stretch you.
Look after yourself. You are your business,
keep yourself mentally and physically in good
shape.
