In another life, in a parallel universe, Adam Carolan could have been a professional cricketer. Or an investment banker. Or an actuary. He could have even turned his back on financial advice altogether.
Luckily for the profession, none of those things came to pass. Together with Postcard Planning director Rohan Sivajoti, Adam is spearheading a movement to bring together the brightest and the best younger financial planners. Through NextGen Planners, a growing community of like-minded professionals has been built to share best practice, develop and grow.
Adam’s route into advice was a long and winding one. His prowess at cricket helped get him into Durham University, but he decided early on that he would enjoy the student lifestyle far too much to take cricket seriously. Instead, following a long-held interest in all things money related, Adam chose to study business finance.
When he was 21 his father passed away. This led to Adam cutting short his degree to come home and help run the family business – a network of sandwich shops in and around Manchester, as well as some property interests. He then returned to university to finish the final year of his degree.
He says: “I then went to do investment banking in London, and hated it. I hated the whole environment; it was really greed-orientated, really aggressive. So I came back and lived with my mum. I went to so many interviews and they all said I was far too overqualified, that my degree was ‘too good’. I laugh with my wife about this now – I got down to the final two at Mercers for an actuarial role. I’m so grateful I didn’t get that job.”
Moving to Xentum
Adam’s first job was in sales support at Aegon, before moving into a trainee adviser role at Manchester-based firm Dewhurst Torevell. After being made redundant during the financial crisis, he was taken on by Xentum founder and managing director Dominic Baldwin.
“What was great was I hit every area of the business, from marketing to HR. We did everything together and there was no hierarchy, it was very much team-based. As the business has grown, it’s benefited from all our different skill sets. From the small team that was there when I joined, we’re all still together 10 years on.”
Adam’s career path at Xentum has gone from a graduate role to paraplanning, to becoming an adviser, and two years ago becoming a director and shareholder. The business is now looking at its succession plan, with the management team set to buy more equity in the company.
"If you don’t engage the next generation, they just leave, because there’s no relationship there. We’ve since learned from that and have attracted young accumulators with good wealth."
He has also played a key role in helping to evolve Xentum into a more future-proof advice firm. Adam explains there are now two sides of the business. There is the more traditional client book made of public sector workers, widows and older clients, and Xentum also specialises in divorce planning. Then there is the side that Adam focuses on of looking after younger business owners, particularly in the creative and digital sectors. He says the twin-track approach works well, with the traditional side of the business continuing to attract referrals, while the entrepreneur specialism benefits from the burgeoning Manchester technology scene.
“The issue we had was when we sat down and did the statistics about four or five years ago, we had quite an elderly client bank. We had quite a bad year where, to put it bluntly, clients were either dying or were making a power of attorney, and we hadn’t seen it coming. If you don’t engage the next generation [of clients’ children], they just leave, because there’s no relationship there.
“We’ve since learned from that and have attracted young accumulators with good wealth. There’s some really exciting entrepreneurs we’re working with which has brought the average age of clients down dramatically. We just think from an outside perspective it also makes our business more valuable.”
The birth of NextGen Planners
Even before NextGen Planners was founded, it’s clear Adam was driven. He is a fellow of the Personal Finance Society, and at the time was one of the youngest to achieve this. He admits he has an “addictive personality”, which saw him complete around 14 exams over a five-year period.
But around the same time, being an adviser started to lose its lustre. Adam says as a young adviser he felt like a rarity among the crowd of middle-aged men. “I had to create a company to get away from that. It was horrible. I look back and I can’t imagine what it would have been like for a young female coming into such a male-dominated industry. You go into a room and feel completely out of place. I remember the first couple of years were really difficult. I would go to events for CPD, and it was almost like: ‘What are you doing here?’
“I didn’t feel comfortable in the profession. I was listening to the same old stories, and was really disillusioned reading the comments in the adviser trade press. It didn’t feel like a great environment to be part of. It also felt like I didn’t have many peers, like there wasn’t that many of ‘me’. I’ve since found a lot more people like me, so it’s funny how that has evolved. But at the time it felt like quite a closed industry, like I was being shoehorned into a certain way of doing things. I’ve got to say, if NextGen Planners didn’t happen, I probably wouldn’t be in this profession.”
What compounded that sense of disillusionment was what had happened to Adam’s late father. Last month he told delegates at the sell-out NextGen Planners conference how his father was advised to transfer out of his defined benefit pension scheme, only for the adviser to go into liquidation and his father to lose almost £195,500 of his pension pot. Just £48,000 was recouped from the Financial Services Compensation Scheme.
“It’s a really difficult situation to be in when you’re a financial adviser and you’re having to explain to your mother what’s happened. It took me a while to deal with that. I thought, ‘I don’t really want to be an adviser anymore’ because I didn’t want to associate myself with those kind of people.
“But then I felt I had put too much work in through my exams to get to where I was, to then turn around and give it all up. I started to reach out to other people, and one of those people was Rohan.”
Thank you @Nxtgenplanners for a great conference yesterday! A very inspiring and encouraging day, showing an exciting future for our aspiring planners! #TheNextGen #TheFuture pic.twitter.com/QSSTF0MKNl
— Thompson&Richardson (@TandRFS) December 1, 2017
Adam and Rohan met via Twitter, and began video conferencing to share ideas – Rohan was setting up Postcard Planning while Adam was developing at Xentum, and both were keen to learn from each other. Video conferences progressed to a catch-up over a beer, and the idea for NextGen Planners was born.
“We went for a beer in Wilmslow in Cheshire, and after an hour and half and a few pints of strong IPA, we’d bought the domain ‘nextgenplanners.co.uk’ and ordered a logo, though not our current one.
“Starting it wasn’t about money or revenue or anything like that. It was about asking: ‘Why can’t we do more of what we’re doing, but in a bigger room?’ I remember the first roundtable we did in Manchester, it was full with 20 younger advisers there. At that point we realised there might be something in this.”
The membership of NextGen Planners is split between two groups. The leaders group is headed up by former Threesixty managing director Phil Young, who sits on the NextGen board. Adam says these are the people tipped to “shape the profession” for the future, and the group is made up of those setting up their own business or looking to start on their own, as well those who are instrumental within their existing financial planning businesses. The second group is made up of employees and trainees. “It’s basically a membership about me, and the journey I’ve been on.”
Progress and innovation
In spite of his family’s experience of advice, or perhaps because of it, Adam is keen to better promote the value of financial planning and the difference it can make to clients.
“We’re in a profession where the bad guys don’t operate in public – they operate behind closed doors. All the people on Twitter and social media, they’re generally the good guys. The one thing we have to do that we’re terrible at is telling more good stories about what we do.
“All you ever read about in the press is bad stories about advice, and my family’s been part of that. But I’ve got 40 good stories that show the impact of advice, and we just don’t tell those.”
NextGen members use team working and instant messaging system Slack for discussion groups, including a stream on ‘Friday wins’ where advisers can share positive stories of how they’ve helped clients.
“Friday wins was really to start getting a database of good news stories. Clients care about what we can do for them, and by seeing these stories they’ll see what potentially that adviser could do for them.”
Adam is also a big believer in the role technology can play in making the advice process more efficient. He also sees the value in using technology to bring down the cost of servicing clients, and advocates the use of digital transaction services like DocuSign and using video conferencing with clients.
At a glance: NextGen Planners
Company launched: October 2016
Number of members: 150 premium members – a monthly subscription costs £7.50 plus VAT
Over 130 individuals trained to date
A total of 169 attended the first NextGen Planners conference
In a nutshell: “NextGen Planners is a community and delivers training for the next generation of financial planning. For us it is not about age, it’s a mindset that you are ‘always learning’.”
His concerns for the future of the profession centre around the impact of regulation, and the trend towards advice firms getting swallowed up by larger companies.
“I’m very worried about regulation. I think of my own personal experience at the moment, and a lot of my headspace is taken up by Mifid II, GDPR, the senior managers regime, and what the FCA will come up with next. These are good things and it’s all needed, but it’s blocking innovation as well.
“The worry is people will get disillusioned and leave the profession, and at the moment we haven’t got enough talent as it is. Regulation’s becoming favourable to bigger businesses. Deep down I think the FCA would prefer to have fewer, bigger businesses rather than lots of small firms.”
Understandably, Adam is also concerned about attracting talent to the advice sector, and says he often speaks to business owners who are struggling with recruitment. He says he already sees the lack of advisers driving up wages, but says while this is a good development in the short-term, the issue is many successful planning firms which don’t want to be driven into the arms of consolidators are finding it really difficult to appoint successors.
He reflects that NextGen Planners has achieved a lot in its first year, saying: “It’s crazy how far we’ve come.”
He adds: “We just want to impact more clients. That’s our driver. We’re doing a few initiatives, such as partnering with a charity next year to look at financial capability. We view the work we do with advisers as directly impacting on clients. That’s what success looks like to us. The more clients we reach, the better.”