Advisers explain how out-of-town offices are preferable to city centres and why the retirement market is key
It is easy for outsiders to make assumptions about the North East based on the so-called North/South divide. While acknowledging the real challenges in this part of the UK, local advisers are keen to highlight the positives that tend to be obscured by the national focus on what is lacking.
It means the feeling that the area has never fully recovered from the demise of its deep coal mining industry and fears the HS2 railway system could mean more people commuting to London rather than contributing to growth in the North East co-exist with advisers’ enthusiasm for the region’s unspoilt countryside and thriving business community.
“For all its national negative stigma, Teesside and the North East actually have an abundance of wealthy individuals and a rapidly growing business community, one of the fastest growing in the country according to the Office for National Statistics,” says Active Financial Planners managing director Karl Pemberton.
The North East has turned out its fair share of wealthy celebrities over the years, including rock musician Sting, England footballer Alan Shearer and former Girls Aloud singer Cheryl Tweedy. However, wealth in this part of the UK more commonly revolves around retirement, so that is an area which forms a big part of advice firms’ offerings.
“Our client bank is the silver market; we see people close to retirement or at retirement,” says Explore Wealth Management managing director Stephen Sumner.
“Several years ago, when clients came to retirement, all they had to decide was adding an annuity. Now there are other, more bewildering options, so it is important they get advice to make the right decisions.”
Explore Wealth Management’s focus on the retirement market prompted the firm to move away from a city office into a purpose-built out-of-town one.
“We relocated to a larger office in a business park eight years ago. We could see the city centre was busier with more cars on the road and it was harder for clients to see us in that location,” says Sumner. “We felt that some people lose confidence in driving when they get older and they had the stress of driving through the city centre, so it made us think we would be better located out of town.”
Also located out of town is Perspective (North East), formerly known as Rutherford Wilkinson.
“Clients recognise when they are paying for expensive locations and plush offices,” says managing director Ian Wilkinson. “We are slightly out of town in an office park where clients can get to easily and parking isn’t an issue. Many like the fact it’s a discrete place to have a meeting.”
Pensions are a significant issue for Perspective’s mix of large North East businesses, small and medium-sized enterprises, and private clients.
“Pensions can still be complex and mystifying for many people, and advice can help people make good decisions that will impact their retirement,” says Wilkinson.
Pemberton highlights the relationship between office location and the fees that clients are charged, pointing out that his firm’s newly refurbished out-of-town head office attracts quality clients.
“We’re not the cheapest, and we don’t want to be inundated with volume, yet we’re far from being seen as expensive by not being an inner-city firm,” he says.
As increasing regulatory compliance and administration prove challenging for smaller firms, Wilkinson believes larger businesses like Perspective are likely to grow in the North East, as well as nationally.
“However, more importantly, we believe the generalist model of financial advisers has been outdated for some time as clients require specialist advice. We have found that building teams serving corporate and private clients, as well as areas such as doctors and dentists, is the right approach,” he says.
Sumner suggests that advice firms in the North East may have to work that little bit harder to find wealthier clients compared with advisers in London and the South, but says the competition comes from banks, not other advisers.
“Our competitors are mainly the banks as they tend to get in first if a large sum of money hits someone’s bank account,” he says.
“Whoever gets the first bite of the cherry tends to keep the cherry, but we get a nod when people come up to retirement.”