A triumph of focused energy

Date Published:15/11/2010

Classic car enthusiast David Ferry appreciates how a great model can punch above its weight and his business is doing just that with quality of service at its heart

Classic car enthusiast David Ferry appreciates how a great model can punch above its weight and his business is doing just that with quality of service at its heart.

Can you run a profitable business with only 15 clients? David Ferry, founder of Ferry Financial, is proof that you can – some of those clients just have to be lottery winners.

Ferry started the business in 2007 with only three clients, which he admits was terrifying. But, aided by his experience advising lottery winners at previous employers Ernst & Young and BDO Stoy Hayward, he has steadily built relationships with enough high-net- worth individuals and families to make Ferry Financial a success within three years.

Ferry says his ideal number of clients is about 50, but he’s not setting any deadlines. How long will it take? ‘I don’t know and it doesn’t matter,’ he says.

‘I’m not in it to build a huge empire but to do a good job for my clients and enjoy what I do. The business is growing very nicely. But if I set targets, there’s a huge pressure that I don’t need. If clients are not right for the business, they’re not right, it doesn’t matter when they appear. But every year there are new clients based on word of mouth. This will get easier as the numbers grow.’

This approach chimes with Ferry’s easy-going character and his decision not to wear suits.

‘I am relaxed personally – professionally I’m quite different,’ says Ferry. ‘But when I’m dealing with clients it’s with the personal side, which is why I don’t wear a suit. I’ve asked clients “do you want me to wear a suit at meetings?” and they’ve said “what do you think? It’s what you say and do that is important.” There are enough people around that I can help. If potential clients don’t like me wearing jeans, that’s fine. If you want the flash suit, go and find it because it’s not me. There are plenty of people who have got past that, I think it’s the intuitive ones – they’ve built a business and they know what’s what.’

But underneath the relaxed exterior, Ferry has a more intense side which sees him working long hours and weekends.

When not in the office, he’s been rebuilding a 50-year-old Triumph TR3 from wreckage and this year drove it down to the Classic Le Mans race, where he was taking part in another driver’s support team. Ferry also owns two TR4s – one is being built as an endurance rally car, and the other as a lightweight race car. ‘I’ve got oil and petrol running through my veins!’ he says.

Enduring relationship

Ferry says he was driven to set up Ferry Financial out of sheer frustration with his work in larger organisations. ‘The bigger the organisation, the greater the possibility of clients not being the number one priority,’ he says. ‘Clients are beginning to realise this. They want an enduring relationship.

They don’t want to be told “Fred’s gone, here’s George”. I have one client who was with Goldman Sachs but left because of this, and we all have stories like that.

‘If you have an ethical foundation you start to question why things are happening [at a larger organisation]. Who is the most important person? Is it the client, or the adviser who has pressures of targets, or the firm itself?’

Ferry Financial was therefore set up with the intention of putting the client at the centre of everything. ‘It’s simple. If it’s not right for the client, it’s not right for me,’ says Ferry.

He is a discretionary manager but, perhaps oddly on the face of it, passionate about passive investing to the extent that he has turned away clients who want active investment.

Ferry explains that, as with many new model planners, he believes money is only a means to an end. ‘With proper financial planning, you should ask “if you have £5 million let’s work out what you want – is it travelling the world, for example, or providing for your children?” Once that point’s established you can draw up a plan to make it work. That’s turning it around from chasing returns on your investments to living life and it’s why we have the tagline “Investing for life”. I want to facilitate and be part of them enjoying their lives. Discretionary management is important because, if there is a rebalancing, or they need cash, I can get on with that, I don’t need signatures.

‘So it’s discretionary management of assets but in low-cost, passive investments. Over time, I think more advisers will want to provide this service to their clients. It’s about not wanting to trouble them.

They accept my advice, so it makes sense for me to just get on with it. In a nutshell it’s: I’ll invest the money – you live the life.’

Segment 7

This commitment to passive investment has spurred his involvement in Segment 7, an association of like-minded planners.

‘It’s a number of individuals around the UK with different skills forming an association,’ explains Ferry. ‘For example, if I have a client with connections in Northern Ireland who needs advice, I know I could phone David Crozier [another Segment 7 member based there] and he would give a great service. I don’t want anything out of that. Again it’s about looking after the clients. Also you can kick technical ideas around with the other members.

One problem in a business of this size is you don’t otherwise have that resource.’

Segment 7 is still new and finding its feet but, after a recent meeting, Ferry says he is positive about its future as a vehicle for marketing and collaboration.

Another one of me

Ferry admits that running his own business has been hard work. ‘I learned that, in your own business, everything takes longer and costs more than you expect. There is so much to do.’

This burden has been lifted to an extent by the employment of Tania Cooper client services manager, last year.

Ferry says: ‘I wouldn’t want more than 50 clients, because I want to be dealing with them, I want overall responsibility for the relationships. People want continuity and to know that I am here. If I had more than 50 clients, I could not cope with the structure, so I would need more support staff, or another one of me.

‘It would be fantastic to have another one of me, or merge with a similar business,’ says Ferry. ‘I would love to have someone else who could do discretionary management. There is a lot more power having two people rather than one. It’s probably a blessing for the world but it’s difficult to find another one of me who has similar experience – someone who is prepared to throw away the corporate shackles and indoctrination, live their own lives and help our clients live their lives.’

Finding new clients

His strategy for finding new clients is varied. ‘I’m talking to the right firms of other professionals about what I can do for their clients. But I’m not interested in swapping clients.

When we refer to lawyers or accountants, it’s because they will do a good job. I don’t want something back, because my objective has been achieved. I’ve done the right thing for my client. The main source of additional work for me is from my delighted clients.’

No initial fee

Ferry Financial clients need to have a minimum of roughly £500,000 to invest. Ferry does have clients with less but they are reasonably young with a big income; or who are adult children of clients.

Ferry works on a fee basis only. He charges 1% of the first £2.5 million invested, reducing by 0.25% for each £2.5 million after that up to £10 million – ‘after that we’ll talk about it!’ says Ferry. There is no initial fee except in unusually complex cases. ‘I certainly don’t charge an initial investment fee, I only charge 1% on the way in to build a financial plan. A lot of clients don’t know what they are being asked to stump up for, so I shy away from it. Perhaps I’m wrong or perhaps that’s why my clients are so happy.’

Although Ferry provided discretionary management with previous employer BDO, offering the service in his own company presented some logistical challenges.

His solution was to join Raymond James Investment Services (Raymond James) as an affiliated office.

He explains: ‘I could have been authorised directly by the FCA but I wouldn’t have had any time for client work, I would have spent all my time running the business and dealing with the FCA.

‘The solution was to go to someone who could facilitate my authorisation. Raymond James is not a network but it provides all the structures – for example, dealing platforms, FCA authorisation and indemnity insurance – that enable me to service my clients and provide the discretionary management services which are key to the offering.’

Lottery fever

Ferry’s biggest regret in setting up on his own is losing the relationship with Camelot that he had in his last two companies. ‘I did get in contact with them but they want national financial advisers on the panel,’ he says. ‘I don’t understand why. My clients are all over the UK, I can go anywhere.’
Most of his clients also enjoy coming to his office in a beautifully restored old building in Stratford-upon-Avon.

‘Lottery winners are fantastic. Suddenly a few million quid drops into your lap, which is empowering. It’s a fantastic time in their lives and it’s a privilege to be involved, to help and make a significant difference for them.

Lottery winners are invariably terrified of the money and spending it. It’s really strange. Most of them know how lucky they are. Unless they are going to give away their money, they have to get used to it, which takes time. I advise them to go and blow a bit of the interest. It’s nice to see them getting used to their money and enjoying it.

‘The sad part is what goes. For the guy who used to go down the pub every Friday – who’s going to buy the beer from now on? If he does, it changes the relationship. If it were me I’d say:“We’re off on holiday – all on me – and when we return, it’s back to normal.”

‘I love finding out about people. Lottery winners are interesting psychologically, because someone is lifted out of their world and it can blow their mind. The proper thing to do is put the money safely into cash or close to cash and then work with them – take as long as they need and get the life coaches or whatever they need – to help them work out what they want to do. Once we know that, we’ll look at the millions and decide what to do. You can go down the investment path or the “what do you want?” path. The latter is the key.’

CAREER

  • 1983-1995 NatWest Bank, bank clerk and financial adviser
  • 1995-1996 Prudential Assurance Company, executive consultant
  • 1997-1999 Sedgwick Financial Services, senior consultant
  • 1999-2000 NR Financial Services, senior consultant
  • 2001-2004 Ernst & Young Financial Management, manager
  • 2004-2007 BDO Stoy Hayward Investment Management, investment director
  • 2007-present Ferry Financial, investment manager and branch principal

PROFESSIONAL MEMBERSHIPS/QUALIFICATIONS

  • Certified financial planner and member of CII Advanced financial planning certificate
  • G10 taxation and trusts
  • G20 personal investment planning
  • G60 pensions
  • G70 investment portfolio management
  • Member of Personal Finance Society by diploma

5 TOP TIPS

  1. Excellence is the objective. Consider how you can be exceptional at what you do.
  2. Provide the service that together, you and your clients discover they need.
  3. Enjoy working with, and getting to know, your clients.
  4. Take proper care of your clients as their success will precede yours.
  5. Revel in a job well done.

Sydney to London rally

Ferry has a number of personal goals including completing at least one three- or four-week endurance rally, from Sydney to London. ‘You can only do one at a time, because the car will get destroyed in the deserts and mountains of Asia,’ he says.

‘I’ve had a race licence for two or three years now, but haven’t used it in anger.

The race car is hopefully going to be finished over this winter and I will be out on the race circuits next year.’

Another hobby which has been getting his adrenaline pumping for the last 13 years is snowboarding. ‘I’ve had various broken bones and operations to prove that!’ Ferry says. ‘I would dearly love to spend a ski season in a resort. I actually spoke to some of my clients about this and got a fantastic response. I asked if they would be comfortable if I was living and working for the season in Austria.

Some clients said “Make sure the apartment is nice, in a decent resort and big enough, because we will come and have meetings and stay with you”. I did not expect that! So I will do that at some point.’

What with racing and snowboarding, he’s already been to France three times this year. But he would also love to go snowboarding in northern Japan and visit Tokyo.

balanced stones