Spotlight on Rob Harris

Rob Harris is CEO of Your Financial Friend. He is a financial educator, teacher, mentor and friend. His passion is to empower each and every person he can with the tools, information and skills to grow their money, investments, pensions and to take ownership of their financial future. He gave financial advice professionally for over 30 years before setting up his own company.

What would you say is the difference then between a financial educator and a financial advisor?

Well, the regulator would say that the financial adviser will tell you what to do. The educator can give you guidance and information. An educator can even suggest to you what you might want to do but they can’t tell you what to do. It is a very narrow borderline.

How did you end up in the finance world as a young man? I was in a situation where I did an apprenticeship within the print industry from the point when I left school, but it wasn’t really the right place for me to be. I was trapped in for about six years. I became a qualified journeyman. I stayed in the industry for a while. In the church that I used to go to, there was an admirable man, whose name was Jim - Jim always had a twinkle in his eyes!

Jim was an amazing man. In the Second World War - he trained our guys to fly and parachute down behind enemy lines. He would always be the first one out of the plane, then he would work his way back to the UK through enemy lines, and then do it all over again. I was fascinated by him and his character. I kept nagging him – “Jim, I want to come and work with you.” He was an insurance broker. He said to me – “I’ll give you three life assurance application forms, go and see your friends and your mates. If you can sign them up, I will have to take you on, won’t I?” So within about seven days, I came back with three application forms, all signed up for life assurance. He had to take me on!

In the 1960s there was no regulation of any sort. You could just become an insurance broker if you wanted to. I bought myself a book from WH Smith, it was called “Teach Yourself insurance”. That’s how I began to learn. I went cold calling and that’s how I came into it. That was the very early beginnings for me.

Is it a better world now it’s quite heavily regulated? An interesting question. I think in some ways, most certainly it is. And in other ways, it most certainly is not. You have to have regulation. I do smile sometimes. Every time the regulators fine somebody, I think they failed - regulation should have prevented the wrongdoing in the first place. This is a personal view, but we do find at the moment that the financial advisors are often limited and can’t actually do what they believe is the right thing to do because there have been Financial Conduct Authority warnings.

Perhaps the advisor believes a concentrated portfolio, rather than a diversified spread of investments would be the best advice. However the text book and the regulator would require diversification. The economic background may mean diversification will not bring the best result for the client.

That’s a controversial view I’ve just exposed I’m sure. I think it’s key and it does validate what I’ve explaining recently to people who have small amounts of money in their pension. They’re often not to access those pension funds without getting financial advice. That’s very sensible in many ways. However, if someone’s got a pot of £7,000, a financial advisor cannot afford to help them.

Recently a lady was told that she couldn’t access a pension fund without financial advice. She was recommended to an advisor who wanted to charge £720. That’s quite understandable because the advisors got to cover all their costs. There’s nothing wrong in what the advisor’s doing with that. What is wrong is all the fear and warnings of going against the regulator’s advice to do what you think is the best thing.

So how does somebody going about choosing a financial advisor as there’s quite a lot of choice out there? I’ve been in this industry for 50 years, so I do feel as though I know the industry from the inside out. I’m aware of things that are outside of the industry, that as a client seeking advice, you wouldn’t necessarily be aware of. There are many different levels of financial advisor. Please don’t choose your financial advisor, just because you like them. It’s important if you have a chemistry with the person you’re going to work with when they are looking after your wealth and your pension.

However, you really must ask them deep questions. In the world of business networking, we often talk about getting to know somebody, getting to like them, and then feeling if you like them, we trust them. We need to go deeper than just feeling. There needs to be a bit of forensic science around the question. The kind of question that I would be asking with the knowledge I have is: are you truly an independent financial adviser? By that I mean are you directly regulated with the Financial Conduct Authority? Or are you regulated through a company midway between you and the regulator, a kind of an umbrella company? That may not be a bad thing. In my view however, that could limit the kind of advice that the advisor could give you. I sometimes say to people, ask your advisor, if they felt with economic conditions were such that it was right for all your money to come out of investments and sit in cash for the meantime, would they do it?

There are very few advisors that would do that because the principle is you should always diversify your money across different kinds of investments - some will go down, some will go up. You might be comfortable with that. But on the other hand, you might think I want to do a bit better than just the average. You need to find out whether your financial advisor you’re choosing is “outside of the box”, or is he or she rigid in the regulatory framework?

A proactive financial advisor will always look two steps ahead of the market. For example, if there was going to be a sudden spike in inflation, I would hope that your financial advisor would be aware of that. Therefore they would be taking some steps; maybe to shape your portfolio to take care of that inflationary possibility and to take advantage of it. This might be changing your investment over to gilts that have an inflation linked rate of interest.

A fundamental mistake that is made is based on the textbook about financial advice and indeed regulators. Many advisors will decide that certain kinds of assets or investments are high risk and others are low risk. I shake my head controversially maybe with all my 50 years of background - I know that the risk of any investment is not what the textbook may tell you. The risk and reward for your investment depends on the economic and political conditions around the investment. So you see, you need a financial advisor who is market aware.

Why do you do what you do? What gets you out of bed in the morning? ‘Why’ is the big question we all ask about life and everything else? Why are you here? Why am I here? So if I talk about why I do what I do, that’s just one little piece of the jigsaw. To understand why I do what I do, you have to understand more about the rest of my life really to get the proper picture.

Some people are pretty knowledgeable about investments, that’s good. But the bulk of people actually know very little. They’re in the stage of greyness about investment of money and how to handle it and what to do with it, or they are just dependent upon a financial advisor. They don’t really understand where their money is or what it’s doing. For some people, they’re completely in the dark, there’s no light about the subject.

People who are in this place are just missing out usually. We are living in a world now where because of the economic conditions we’re facing now, it’s not going to be easy. That means we all need to make the most of every pound we’ve got. That actually means you’ve got to move money out of banks and building societies and into proper investment. To do that, you’ve got to understand what you’re doing and weigh up whether it’s what you want to do. That’s what I’m about. I help putting the light on for people.

An awful lot of our money and our financial thinking and what we do with it can often be traced back to our parents' attitude. I guess it’s that old thing of still keeping your money under the mattress! If you see it and can touch it, you know it’s there. Whereas if you invest, it goes into the air a little bit, doesn’t it? I can totally understand that fear.

What would you say has been your biggest challenge to date? I think the biggest challenge is people’s attitudes. It’s very difficult to help people to move from one attitude to another. The challenge isn’t competition in the wider marketplace - it’s very hard to find another financial educator. I have to be very gentle and careful about how I approach people. I can look over a roomful of people and know that if I can get my message across to them, their financial well-being will grow; be substantial. The difference that handling money profitably, sensitively, prudently and knowledgeably can make is absolutely huge.

In a world where we know there are so many people struggling and suffering, wouldn’t it be great if we could make some surplus profit, and have that surplus to share with the world of people who are suffering from lack of food and all the other things? An interesting question for people out there really is what is your wealth? Does it buy happiness?

If you were to give one top tip for any business owner out there, what would your top tip be? I’ve learned from quite an early stage in my business life, to offload the things that I don’t enjoy, to offload the things I’m not good at. I don’t want to learn how to do it and take up hours of my day. I can get more benefit to other people face to face, sharing my knowledge. That’s my income as well. So as much as I’m on the coalface and not in the admin work, that’s good for my business and other people’s business will flourish as well.

You’re also gaining back the time which is an investment in itself – time to invest to make a business successful.

Watch the interview

This is an extract of a video interview – to watch the full session, visit: https:// www.youtube.com/ watch?v=YutaLvGu7zA