Double act

Meeting Joel Adams and Michael Holden, founders of Lift-Financial, you could be forgiven for thinking you are talking to a comedy duo from the Northern club circuit.

But while the pair have a refreshing approach to making work as much fun as possible, the banter the two share contrasts with their deadly serious approach to delivering workplace benefits.

Understanding what they can offer, and communicating that to clients, is paying off. Based in Altrincham, Cheshire, Adams and Holden make a virtue of their regional cost base – amplifying the message that they can match or exceed what established City-based organisations do, but for a fraction of the price.

It is a strategy that is paying off. Lift-Financial, which rebranded from Chartwell Financial Management at the beginning of the year, has targeted top-end FSA-registered organisations as its client base and now has one of the world’s largest asset managers on its books. Other clients include Skandia, two ombudsman services and some other fund managers.

For a company that has only been going for two and a half years, few would argue this is quite an achievement. The organisation’s progress was acknowledged by the industry in February when Lift-Financial scooped up two gongs at the Corporate Adviser awards, in the pension adviser and best use of technology categories.

The firm’s strategy has been straightforward – target the best possible clients, as Holden, executive chairman of Lift-Financial, explains.
“We have found ourselves a niche market by focusing on FSA regulated business. We have done this because painters never paint their own houses. These people are too busy, and they haven’t got the time to sit down and sort out their own affairs,” he says

“Ask yourself what are your ideal clients and the answer is you want merchant bankers and professional footballers. And that is what we have done. We have asked – that’s all we have done, and some of them have said yes,” says Holden.

There is obviously a bit more to their success than simply knocking on doors, however. Their investment in technology has paid off, making it possible to offer a slick group pensions model. A judge at the Corporate Adviser awards described Lift’s technology offering as being on a par with the very best in the market, even though the company has barely more than 30 members of staff.

Technology is central to Lift’s offering, says Adams, the chief executive of the organisation. “We are a service-oriented business, which is reflected by the fact that we have 11 advisers and 20 support staff. We offer a service and are not selling products,” he says.

“Ask yourself what are your ideal clients and the answer is you want merchant bankers and professional footballers. And that is what we have done”

Holden is charged with getting and winning clients and describes his days at General Portfolio, selling what he describes as ’all the nasty stuff’ as a perfect training ground for winning new clients. Since moving up market in client terms, his strategy is remarkably simple, but made easier by the fact the firm gives face to face advice to all members of staff.

“We have kept in personal contact with all the employee clients from big financial companies we have served, and when they go to different companies, we ring them up and ask them who their HR director and finance director is. We then ring up and say who is running your scheme, because we can probably do it better and cheaper.” says Holden. “We clobber big EBCs every day of the week on price.”

The firm offers a range of risk-rated profiles for clients, and then rebalances them for them, on the basis of OBSR ratings and, occasionally, the firms’ own call of where the market should be. This is carried out by emailing all members and suggesting to them, on an advisory basis, that they switch.

“The services we provide are advisory and not discretionary. What we typically do is get our clients to sign online switch documents. If they are then invested into one of our pre-defined portfolios and we think change is necessary, maybe a change in fund manager or a change in asset allocation, or maybe a straightforward rebalance, we can do that quite efficiently on their behalf. We typically email out an authorisation asking people to agree to it, and they send it back to us,” says Adams.

This approach sounds like coming to the governance solution life offices are starting to offer contract-based schemes through a different route. But does the firm have the expertise to make these calls?

“We are making adjustments according to the asset allocation models that we have established. But also, because we use OBSR to pick the funds we use, they update their funds on a quarterly basis. If they make a call to say that a fund should be sold, we make the change. We don’t have time to sit around doing this.

“Everybody accepts now that the asset allocation you adopt is going to make the biggest difference to your returns. Why put everyone into one fund where they won’t have the opportunity to make an allocation call and where they are not able to select a portfolio that matches their risk profile?” says Adams.

“We clobber big EBCs every day of the week on price”

So what proportion of staff reply to the recommendations? “The vast majority,” says Adams. “All the changes made have been perfectly called over the last few years. Although we use OBSR where possible, we will make changes. Two years ago before the height of the financial crisis, in the summer of 2007, we felt markets were quite toppy so we changed a lot of our lower risk funds to put an absolute return fund in as a core holding and that was in hindsight an excellent strategy and protected them from volatility,” says Adams.

The firm is clearly achieving engagement with staff with both the level of response to rebalancing communications and with use of a range of funds.

“For one of the schemes that we manage on Skandia’s behalf, there are 500 funds available on the platform. Nearly 300 of those funds are being used by members. For those people who want to self-select, there is clear demand,” he adds.

The firm is also taking a fresh approach to delivering non-pensions advice through the workplace, particularly in the field of mortgages, where it is tapping into the huge potential market that big workforces represent.

“Lift Mortgages was set up off the back of a 900 member scheme where the firm started offering mortgage advice services to staff. It now has 180 live mortgage applications across that employer’s workforce,” says Holden. Figures like that replicated across even a small proportion of corporate intermediaries’ workforces would mark a significant cross-selling opportunity, as well as offering another service.

“We say, don’t leave your desk, we’ll do it over the phone and by email. The employee is happy because they don’t have to leave their desk, and so is the employer,” says Holden, who believes most intermediaries are still missing a trick here. “There are a couple of firms having a go at this, but the big EBCs don’t want to go anywhere near it because they don’t want to give advice.”

And with so much change about to hit the group pensions market, what would Lift like to see from providers? “Providers have got to support the group market – they have got to keep on top of technology, they have got to keep their investment ranges up to date and also, very importantly, corporate IFAs will need help through the personal accounts minefield.”

He thinks the proposal to abolish commission is misguided, as it could lead to a reduction in overall pension saving. “There is definitely a space for commission to remain in the group market although you have got to be open about what the figures are. I hope consultancy charging isn’t the way it goes. Where we do deal with clients on a commission basis it is usually structured as a fee that comes off or trail, without taking a big chunk out on day one,” he says.

And how would it be greeted if the firm did take a big chunk out on day one?

“I can’t imagine the employers will put up with that, and I can’t imagine members of schemes putting up with it either.”

Adams and Holden each own 39 per cent of the firm, with the remaining 12 per cent split equally between six fund managers, who have invested their own money in the organisation. The firm achieved chartered status earlier this year, and has four advisers who are chartered, with another three just about to emerge from the pipeline, but is looking to recruit more staff to deal with new client wins.

The duo have big plans for the firm that they are bent on implementing with a smile on their face. If their meteoric rise continues it is sure to bring them sunshine.