It was almost a year ago that Lloyd Davies set up rockwealth Aberdeen. Here he tells Robin Powell about the first 12 months, the changing local economy, and what clients are telling him about their hopes and fears.

RP: t’s almost a year since you founded rockwealth Aberdeen, Lloyd. How has it gone?

LD: I couldn’t have asked for it to go any better, to be honest with you. You’re obviously going to be nervous going into something like this. You think you’ve got good client relationships and professional connections, but it’s not until you set up your own firm that you actually get to test them.

The first client got in touch at 9.45am on day one, and I’ve had a steady stream of phone calls and email enquiries ever since. I soon realised I needed some support, and thankfully Claire Rocks, who’s worked with me before, was able to come on board as Client Support Manager. Having her here has allowed me to keep moving forward and taking on new clients.

Why do you think there’s been so much demand?

I think whatever’s going on in the world, whether it’s positive or negative, there’s always a reason to seek advice. If you win the lottery, if you lose your job, if you inherit money, if your relationship ends and so on and so forth… All of these things prompt people to make make sure their finances are in order.

The pandemic was probably the one time when there wasn’t a large number of people seeking advice. I suppose that’s because there were other things to worry about. I don’t hear of many advisers nowadays who aren’t busy.

The fact that rockwealth has a distinctive value proposition also helps. It’s really clear on the website and in our content what our values are. People are reading about evidence-based investing and coming to see us for that reason. They like our fee model too, and the fact that we’re so transparent.

There’s been a shift in focus in the financial advice profession in recent years — away from investment products, and towards holistic financial planning. Do you think the public is aware of that shift? Or do most people still come to you with investment-related questions?

I think we’re never going to get away from that, because investments are still important. I also find that a lot of clients come to us to compare what we say with what they’ve been told by another adviser.

But again, people can see from our website and our videos that the key thing for us is financial planning, so they already get that. I can’t recommend an investment strategy to somebody unless I know their background, their time horizon and what they’re looking to achieve.

Generally, though, I think that, as a profession, we still need to explain to people that it’s the wider financial plan that’s the most important thing. The majority of people still see financial planners primarily as investment advisers.

Do people who’ve had other advisers in the past find the rockwealth way of doing things very different?

Absolutely. The financial plan, and the cash flow modelling that stems from it, very much form the backbone of client meetings at rockwealth. It’s all about making sure the client is still on track. The plan is obviously not set in stone, because people’s circumstances change, and the plan has to adapt to that. But it’s the plan that’s all-important.

Clients who come to us from other firms find our annual review meetings very different to what they’re used to. In fact they’re very different from what I’m used to myself! Previously I would issue a review pack with the latest portfolio value, performance figures, investment data and so on, and that would be the focus for the meeting. At rockwealth, review meetings revolve around the wider plan, where the client is on their life journey, and how their situation and goals are evolving. It’s the client who is front and centre, in other words, and not the investment portfolio.

The oil industry played a huge part in the economy in your part of the UK for several decades. As oil inevitably declines, what impact is that having on general levels of wealth in the area? And how well placed do you think North-East Scotland is to weather structural changes to the economy?

The city of Aberdeen and the surrounding area are very much in transition. We’re moving from fossil fuels to renewables, and though it might not be moving at the pace that some people would want, it’s definitely happening. What’s happening in Russia has perhaps slowed things down slightly, because it’s made people aware of how reliant on oil and gas we still are, but the trend towards renewables will obviously continue.

As a financial adviser, the majority of the people I’m seeing are those who are already approaching retirement, or are actually retired, and who have therefore accrued wealth in the past. So, for those people, there isn’t a huge impact. But clearly oil and gas won’t be as lucrative for the next generation, who may well have to retire later. There’s also some concern about whether there’ll be enough jobs for everyone.

I think any city would find it hard to replace what the oil and gas industry has brought to Aberdeen. But we’re certainly moving in the right direction. There’s a lot of expertise here which can be used in the renewable energy sector. I’m sure that all the knowledge and understanding that’s built up over the years will be put to good use. But, as a local economy, we really need to diversify and look to attract other sectors to pick up some of the slack.

So what are clients telling you about their hopes and fears for the future?

As I say, most of our clients have already accrued fairly substantial wealth for themselves. It’s future generations that they’re more concerned about. It’s their children’s and grandchildren’s futures they’re thinking of, and helping those generations get on the property ladder and so on.

In the past, young people around here would go away to college and then come back to work in oil or gas and buy a house. It’s not that simple any more.

As a father myself I can relate to that. Having children and making provisions for their future is a big financial commitment. We all want to give our children the best possible start.

It was widely reported that the pandemic made people think about their lives and their plans for life after work. In your experience, is there still plenty of interest in early retirement or semi-retirement? Or has rising inflation and the current economic situation put paid to that?

Yes, people are still thinking carefully about retirement. A lot of clients are coming to me and asking, Am I in a position to retire? Perhaps the plan had been to retire at 65, but they might now be thinking of reducing their workload at 60.

But what I’m seeing as well is more people wanting the flexibility of working from home and not having to commute. This could potentially extend their working lives a bit, because it doesn’t seem such a grind.

Yes, the economic situation has made a difference for some who were planning to retire in the next 18 months or so. They may now be thinking of delaying it slightly.

But the beauty of financial planning and cash flow modelling is that you can see in black and white what’s possible. The important thing is to make sure you’re on track to enjoy the retirement you want for however long you expect to live. If you can see you’re on track, there are various options open to you.

It’s a big subject, but what advice (other than coming to see you!) would you give to people thinking about retiring in the next two or three years?

Without wanting to sound corny, the most important thing is to visualise what your dream retirement looks like. Crucially, how are you going to fill your days? What do you really like doing? What matters to you most. These are the big questions you need to ask. You might say, I’m going to play golf. But you’re not going to play golf seven days a week. So it’s not just a question of wanting to stop working. You could be a long time retired, so you have to make sure that you really enjoy that time.

There’s no point in discussing a financial plan for retirement if you don’t know what you want to do. If you’re unsure, I would urge people to try it out. Perhaps work from home a bit more, or work part-time and ease yourself into retirement. I know so many people who’ve just finished work altogether, without really thinking about it, and then found it a real a shock to the system.

Sorry, Lloyd, but you’re a big Dons fan, and we can’t finish without asking you about the historic defeat to Darvel in the Scottish Cup. What happened there?

I was hoping you wouldn’t mention that! It was a classic giant-killing. Our team had no confidence, they scored an early goal, and we never looked like getting back into the game. Ultimately it led to the manager losing his job, and now we’ve got to rebuild.

Who knows? Outside Rangers and Celtic, any team in that division can beat any other on the day. So we might manage to push ourselves up the league and perhaps compete for a European place.

But yes, that Cup result will be in the history books forever more, much as Aberdeen fans like me would rather move on and forget about it.


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