As the industry has made its way towards becoming a financial planning profession, Perceptive Planning director Phil Billingham has been there every step of the way. He is a veteran of both ‘industry’ and ‘profession’, having marked 40 years of service last month.

His career has seen him involved with advice and planning professional bodies at the highest levels, and working with regulators, policymakers, fellow planners and clients across the globe. Phil has decided that now is the time to begin to transition out of the Perceptive Planning business.

We chat about his career to date and the changes he’s seen over the past four decades, shifting market dynamics and what he hopes will come next, both for financial planning as a profession and for him personally.

A life in advice

Phil says his start in financial services in the early 1980s was born out of “a mixture of accident and desperation”. He left school at 16 to join the Navy, then switched to work as a trainee industrial chemist at the steelworks in his hometown of Port Talbot, a place now synonymous with the British Steel pension transfer saga.

He was the third generation of his family to go into the steelworks, but following the national steel strike of 1980 it became clear to Phil that future prospects in the sector were set to be significantly reduced.

So it was that he began life as an insurance direct sales rep for Pioneer Mutual. The company specialised in working with people in the armed forces, and he got organised in getting to know his patch in and around the Midlands and building his relationships from there.

Phil carved a steady path into management before a secondment into training following the introduction of the 1988 Financial Services Act led him to discover a love of training and development. He then worked in various training roles, including at Hambro Guardian and Leeds Permanent, as well as some time spent working as an IFA.

Following the Leeds merger with fellow building society Halifax, Phil took a year’s sabbatical to live in San Francisco. He found himself getting involved with regulatory change in the US advice market, earning himself the lofty status of accredited journalist for Money Marketing in the process.

He spent some time in consultancy in both the US and UK before setting up his own consultancy, Phil Billingham Associates (PBA), in 1999.

Phil says: “Looking back it was a time of transition, when salesforces were shutting down and the new world was becoming one of IFAs and networks.”

Phil ran PBA for 10 years, then joined support services firm Threesixty as head of business consultancy, going on to take on the not insignificant task of helping to take Threesixty advisers through the RDR.

“[FinaMetrica co-founder] Paul Resnik called it correctly when he said I’d become an expert in regulatory change. He identified it before I did. That’s what I’d become, I was always at the edge of regulatory change.”

Phil’s wife Shannon Currie had previously joined him on the consultancy side, but was keen to get back to her former role as an adviser. With Phil also keen to return to a more financial planning-led way of working, they set up Perceptive Planning as a place to grow and maintain long-term client relationships.

The change along the way

Phil’s professional achievements are too many to list here, but include six years as director and vice-chairman of the Society of Financial Advisers, and four years on the board of the Institute of Financial Planning.

He was also seconded onto the regulatory advice panel for the Financial Planning Standards Board, gaining international insight into the way US, Canadian, South African, UK and Australian advice markets worked – how they were similar as well as the stark differences.

When Phil started out in advice the environment was one of ‘buyer beware’, a pile ‘em high philosophy that was purely about selling and churning policies as captured in Ned Cazalet’s influential 2006 report Polly Put The Kettle On.

“It was a very sales-led, macho, aggressive culture. And the stupid thing about it was that nobody profited, except the few clients that just kept saving £50 month into their maximum investment plan. So the contracts did what they were supposed to do, but only if they were sold to the right people.

“Yet they were often sold to the wrong people in the wrong way. Hence regulation. But the regulator's focus, and the focus of many regulators, has been on trying to make buyer beware work by insisting on more and more disclosure.”

He remembers one adviser he was working with who, testing the theory that nobody was reading the reams of papers they were given, started putting the words ‘pink elephant’ in the middle of reports. Apparently it took six months for clients to clock the rogue phrase.

Phil suggests all this does is encourage a paternalistic relationship between planner and client – a kind of ‘don’t worry about this, it’s fine, you can trust me.’ And while this might work to an extent, Phil argues this isn’t very empowering for the client, and leaves them vulnerable to those who don’t share the same ethics as more trustworthy advisers.

He says while the RDR was widely acknowledged at the time to be a wholesale change to what had gone before, it’s only looking back you can see what a dramatic shift it represented. For one thing, advice and planning businesses are far more focused around client retention than client acquisition, reflected in the typical 1% ongoing charging model.

There is also more talk now of intergenerational wealth, but Phil believes planning practices also have to be more intergenerational within themselves.

“I've been having conversations with clients for a while saying: ‘I can start this journey with you, but I'm not going to finish it. This is a 20 or 30-year journey for you into retirement, I'm not going to be there. But we've got people already who are 10 years younger, who will be there for the longer period of it. So firms are having to be more intergenerational in their approach.”

He characterises financial planning as a team sport, with a more collegiate mindset. He notes the greater flexibility to move between adviser and paraplanner roles and vice versa. Thankfully, advice and planning is now a more welcoming environment for younger people and women (at least compared to those early sales days).

The platform/provider cycle

Phil was there to witness the dawn of platforms in the UK, and while he saw it as a positive at the time, he’s less convinced now.

He says it used to be the case that people became clients because they were drawn to the big life company brands – it was the provider that was important, and advisers had to subscribe to that viewpoint.

“But platforms were a breath of fresh air because they were never about that. It was always: ‘This is your client, we're just doing the admin. So for planners and independent advisers, it was fabulous to be able to embrace the use of platforms because these people weren't after your clients. I'm not sure I can say that with the same conviction anymore.

“I think the challenge is for a lot of platforms now they’ve become the new providers. There’s a real lack of clarity with some platforms about who the customer is, and that has to be resolved.”

That said, he thinks platforms do have the potential to service more mass market customers – but his suggestion to achieve that is pretty radical.

The trouble with the direct-to-consumer platform market is that it’s often hard to break into. At the same time, Phil points to the huge number of people that could benefit from advice upfront, but who don’t really need an ongoing level of service.

“Once you get them all set up in the right place, once they're in a Vanguard 60/40 portfolio or whatever it happens to be, until they’ve got £50,000 or £100,000 plus, then really how much have we got to do? I think there's an awful lot that can be done to bridge the gap between this and D2C.

“I just wonder if an alternative hybrid model is where platforms actively say to advisers: ‘We'll work with you to take them on. But there is a mechanism here for you to then step back from this client'. And this client can then manage their own affairs via Vanguard, Nutmeg, Hargreaves Lansdown or whoever else.

"HL in particular has historically regarded IFAs as the enemy. And I'm thinking: ‘We could be your friends, we could bring you the money, do the advice and you get it ongoing. We could be your best friends here, but you don't want to talk to us’.”

Planning prospects

Phil believes the financial planning sector is generally in a good place, but identifies a couple of challenges. One goes back to the intergenerational point – many advisers and planners are of a certain age and may be looking to their own retirement.

He has a lot of time and praise for organisations such as NextGen Planners, but suggests it may have been “a failure of our generation” to not recruit that missing cohort between experienced, established planners and those now starting out in their career.

For him, planning nowadays lends itself more to wealth management, which provides a lot of value, but is less about wealth creation or protection. Phil has faith though that the planners coming through now, who don’t have the baggage of an insurance or investment heritage, could be the ones to put the focus back on financial resilience and building wealth.

“I think those people will be better than we are at applying financial planning skills and disciplines to people who need to accumulate, and to safeguard their and their family's futures. So in some ways it would be stepping back, but also perhaps it would be reclaiming ground that we gave up.”

Reflections, and what next

Phil isn’t leaving Perceptive just yet, but is beginning the handover process to move away from client-facing work to focus on operations, business processes and supporting Shannon, fellow director Eleanor Clark and the rest of the team in the transition.

And so it starts

Thanks @HerdHire pic.twitter.com/TKFDL9jzP7

— Phil Billingham (@PhilBillingham) March 10, 2022

Phil and Shannon earlier this year, ahead of driving a van full of supplies to Poland to help Ukrainian refugees fleeing the conflict. The journey was supported by fundraising from fellow planners.

He plans to spend some time volunteering, continuing his work to support Ukrainian refugees. He also wants to spend more time in South Africa, his long time home from home.

In a separate conversation, in a quiet moment, Phil tells me that part of the reason for choosing to take a step back now was watching one of his best friends as he was dying, holding his hand. All the while, his friend was still working. Phil had a sudden, sharp realisation: I don’t want that to be me.

Looking back at his professional life, Phil has some notable firsts: first level four qualified adviser, first person to sit the advanced financial planning certificate.

He can also lay claim to being the one and only title holder of Insurance Mastermind, which he won as part of the Chartered Insurance Institute centenary conference in 1997. “On the stage in Granada studios, with Magnus Magnusson asking the questions, sat in the black chair with all the music and doing the whole thing. That was fun.”

He remembers how he and former Personal Finance Society chief executive Fay Goddard set up a graduate recruitment programme for advisers, only to find they were 15 years too early. Phil chalks it up as right thing to do, wrong time.

He is proud of his time representing the profession and working alongside the great and the good of financial planning: Rob Reid, Peter Williams, Nick Bamford, Julie Lord, Barry Horner, Marlene Outrim, Nick Cann, and countless others.

He is equally proud of the clients he’s helped: those who went from bankruptcy to secure home ownership, or those that were able to forego the City commute for a better quality of life.

For all its challenges, Phil is a fierce advocate of financial planning and the rewarding career it offers.

“I wish I had discovered financial planning earlier. I think more people are getting it. I'm getting more enquiries from people who just want the plan, they don't want to buy a product or for their money to be managed. They just want somebody to make sense of all this complexity, and just be on their side.

“So it is a lot of fun, and it sounds mad that I'm giving that up. It’s that ability to help people understand where some of the opportunities in their lives are.

“People make the mistake of thinking financial planning is in the money business. We talk to the money business, but we're actually in the people business. So if you like people, I would say: come on in - the water's brilliant.”