Interview with Danby Bloch

Helm Godfrey Partners Ltd – how tech is boosting better client outcomes and adviser productivity

Danby Bloch

The pandemic has accelerated the use of tech in our business, although there has already been a revolution in the use of tech in the financial advice sector in the last five or more years.

Helm Godfrey is a 25-adviser independent wealth manager and financial adviser firm mainly operating in the south east of England. The main office is in the City of London but we have clients all over the country, especially around Oxford, and geography is increasingly irrelevant with the greater use of tech for meetings with clients.

We look after more than £1bn of clients’ money with a growing emphasis on responsible investing’. Helm Godfrey specialise in investing for individuals but we also have an employee benefit business that looks after companies and their staff. The firm in its current form goes back to 2000, when five separate smaller businesses geo together, some of whom dated back to before WW2.

The main driver of the introduction of tech in the business is the improvement of the client experience and the impetus to provide better and more consistent advice and processes across the business. Providing financial advice is a complicated process covering investment, pensions, insurance and tax planning. We need to record, analyses and understand each client’s aims, circumstances and needs.

Our aim is to digitise our care of clients at all stages from recording their aims and objectives, values and circumstances through to buying, selling and reporting on their portfolios and other financial plans. Increasingly, and especially as a result of the pandemic, we are seeing clients regularly by video conferencing. That saves time for clients and advisers but something human and valuable can be lost if we aren’t careful. So we expect to go back to a lot more face-to-face meetings for clients who want that when it is safe and possible to do so

We regard the tech we use so extensively as a means to make the advice more personal and more powerful. It is a means to enhance the personal advisory service rather than to replace it. 

One of the key ways to enrich financial planning is to use a tech approach called long term cashflow modelling to help clients think about their future needs and spending by prompting them to focus on their lives in the future after they stop work. They think what they will need to spend money on each year and the adviser projects their likely income to see how long it will last, using reasonable assumptions about their pension income and their investments. We normally assume an expected lifetime of up to 105 years – because an increasing proportion of people live beyond age 100. The danger we are aiming to avoid is that people will run out of money before they die – we need a margin.

These projections of income and expenditure need reviewing each year to monitor how clients’ investments are performing in relation to their current spending and future plans. We use a well-known technique called stochastic modelling or Monte Carlo simulation to gauge the probability of achieving the projected outcomes – an approach that has only relatively recently been applied to this planning technique. If a client’s portfolio goes up more than expected that might allow higher expenditure – but if there has been a decline it might mean that spending will have to be trimmed for a time.

Long term cash flow planning has also become one of the main ways to help decide what sort of portfolio to recommend to particular clients – how much risk they can afford to take on. We can project the impact of a decline in the value of a portfolio on possible future expenditure. Some clients can invest very substantially in riskier assets that should grow in the longer term better than assets that are less likely to fluctuate in value – they can afford to see their portfolio decline for a time without it affecting their spending. Others can’t afford to take this risk.

It is also possible to use the technique to help a client determine whether they can afford to make substantial gifts to family members – which would have much the same potential impact as an investment loss.