As a world-renowned financial centre, Edinburgh already has a large number of financial advice firms. But three important things make the newest firm, rockwealth Edinburgh, stand out from the crowd, as founder DAVID BOWEN explains.

David, rockwealth Edinburgh officially launched on 23rd August. What sort of clients are you looking to work with?

I don’t really have a model client. I’ve worked with a number of different types of clients over the years, and charities as well. I’m happy dealing with anybody, as long as we can both see that there’s going to be value added to the relationship. 

There are essentially two types of financial advice. There is what I would call the transactional approach, and then there’s the relationship, or partnership, approach. The transactional approach doesn’t work for me. I just don’t see what value it offers for clients. I really do feel that the value is in a partnership between adviser and client, and if clients believe in that as well then that’s who I want to work with.

The transactional approach doesn’t work for me. I just don’t see what value it offers for clients.

What can you offer those clients that other firms don’t?

I think there are three main ways in which rockwealth Edinburgh can add value. The first is long-term financial planning. It seems so obvious to me that financial planning is where the real value lies. There are lots of advice firms that play about with planning and maybe don’t do it as well as they should because they’re too focused on products and investments. For me, everything is built around the plan.

Secondly, I strongly believe in being accountable to the client. At rockwealth we prioritise the needs of the client, and provide them with a best-in-class, evidence-based investment solution which gives them the very best chance of achieving their goals.

Finally, and crucially important for me, I’m thoroughly transparent about fees. Clients of rockwealth Edinburgh will be charged fair, fixed fees that are simple to understand. I’ve had too many conversations with clients in the past about the different layers of charges for products and services. It can be very complicated to explain, let alone for clients to understand!

 

For those who don’t know, explain how big a difference fix fees can make.

The real benefit is that the client knows, in advance, exactly how much they’ll be paying. To be clear, the fixed fee will tend to grow with inflation each year. But if your investments outpace inflation, which they generally do, then, under a percentage-based fee model, the fees you’re charged each year will increase at a much higher rate than it would do with a fixed fee.

For those with larger portfolios, paying fixed fees can save tens of thousands of pounds a year. Even over a relatively short period — say, ten years — the compounding effect of paying percentage fees can add up to a very large sum of money. The fixed fee effectively works as a cap, and it should save you a lot of money in the long run.

Rockwealth is very much an outlier in offering fixed fees. Why, in your view, has the fixed-fee charging model not been more widely adopted?

Good question! It’s as if everyone has agreed to charge a percentage fee,  that’s what they’re going to do, and no one’s allowed to blink. I find it quite embarrassing that, 20 years after people first began talking about fixed fees, most firms still don’t offer them. 

I think the fixed-fee model adds to the professionalism of our industry. It also helps clients to understand the value we’re offering. We are ultimately providing a service, and I think a monetary value can be placed on that service. It’s so much better and fairer for clients who’ve worked hard to accumulate large portfolios. They shouldn’t be paying higher charges for what is basically the same service. For people with more complex needs, there’s usually more work involved, for which we charge a higher fee. But that’s only fair. What isn’t fair is penalising those clients for having bigger portfolios.

How can a financial planner help me?

As a firm, rockwealth also advocates sustainable investing, which, despite its huge growth, has attracted some criticism in recent years. What are your thoughts on it?

When I started out in the industry, there was very little attention given to sustainable investing. In those days, the question was what to do about, say, tobacco stocks, if a client didn’t want to invest in tobacco.

Things have changed so much over the years, and sustainable investing has become much more mainstream. There is also a much bigger focus nowadays on the sorts of companies we want to see in the future. If companies take a sustainable approach to what they do, that’s not just good for the economy and the environment, it’s also good for the companies themselves. In other words, it makes them better investments. So I’m generally positive about sustainable investing.

 

Edinburgh is a major centre for UK financial services and home to a number of big active fund managers. At rockwealth we don’t recommend active funds, or indeed active investing at all. Is that going to be a problem for you?

I think it will be a challenge with some prospective clients. There are plenty of people who still think that the more you pay to invest the better it is. It can be difficult to persuade those people otherwise. But I firmly believe in the planning-first, rather than the investment-first, approach. As an adviser you can’t control the markets. But by building your service around financial planning you’re offering value in a much more controlled way.

I’m also convinced that, increasingly, people are realising that financial planning is what they actually want and need. The majority don’t want an hour-long conversation with their adviser about whether Shell or BP is a better investment. Of course, the investment part is important, but, for most clients, that sort of conversation is completely irrelevant. 

 

What, then, in your experience, do clients want to talk about instead of the relative merits of different investments?

They’ve got much more important things to ask me about. We’re currently seeing a huge intergenerational transfer of wealth from baby boomers to the next generation. When clients sit down with me, they’re more likely to ask questions like, Should we pay off our mortgage? How can we afford school fees? When are we going to be able to retire? How much money do we need to accumulate to retire with a monthly income of X? Will my savings last long enough?

That’s financial planning. That’s what we do. If people allow me to have these sorts of discussions with them, then I think they will instantly see the value that we can add.

IFA and Financial Adviser in Edinburgh

rockwealth Edinburgh is an evidence-based and fixed-fee Independent Financial Adviser situated in Edinburgh, Scotland.

About Us: Located in the historic heart of Edinburgh, rockwealth Edinburgh is your committed local financial planning firm. We provide a wide range of financial services, including personalised financial advice, detailed pension and retirement planning, investment strategies, and inheritance tax planning, all designed to support your financial journey in Edinburgh and across the wider region.

Interested to work with us?: Begin your financial journey with us through an Initial Discovery Consultation, completely free of charge and without any obligation. You can visit us at our office, schedule a video call, or call us on:  0131 3928822.

Discover rockwealth Edinburgh at: rockwealth Edinburgh, 23 Melville Street, Edinburgh, EH3 7PE.