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The variety and independence of being a portfolio FD are great. But what are the secrets of success? From marketing to finding clients and setting fees, James Shand shares his advice.

The variety and independence of being a portfolio FD are great, and I wouldn’t change my choice of career. But 18 years on, what advice would I now give my younger self?

I love being a portfolio FD for the variety of work, and for being really valued by my clients, in a way quite unlike any employed situation. My experience of wise mentoring in the early stages, combined with a passion to ‘level up’ the playing field against experienced portfolio FDs, led me to set up vfdnet. Being able to share this journey with other experienced FDs and FCs is a privilege and keeps me motivated.

To help you carve out a successful portfolio career from the off, I’m going to share my top five mistakes. I just wish someone had told me when I started!

1 Poorly thought out marketing and online presence

You need to develop what your business is all about, including your core values and key services, which all contribute to making up what could be described as your brand. Too often, independent advisers don’t invest in their brand, which becomes clear when you look at their website. A good website should include strong case studies, client testimonials and details of your experience. Our vfdnet associates can piggyback off our website, therefore avoiding this investment, at least initially. This can help enormously when you are starting out.

2 Seeking work in the wrong sector

If your experience to date has been in banking, seeking clients in FMCG probably won’t be successful. So identify sectors where you have established a good track record, then expand this by thinking about the broader sector that the business operates in. I would definitely tell my younger self to seek out a more experienced portfolio FD I could bounce my ideas off about generating work, rather than to ‘boldly go’ out on my own. Mistakes, particularly at the start of your portfolio career, tend to cost time, and time costs money.

3 Setting your fee level incorrectly

It’s a good idea to ask around so you understand what other advisers typically charge for their services and avoid pitching your rates excessively high or too low. Better still, devise standard solutions with defined scope, allowing you to offer these to prospects on a fixed-cost basis; this will increase your likelihood of success.

4 Doing free work for a prospect, hoping to prove yourself

We all love to be valued for our advice, so when we see a challenge we can solve, the temptation is to outline to the prospect how you can solve their issue, and in the process give away the answer. Instead, spend some time writing up your own experience, not as a traditional CV but as a series of projects. Then turn these projects into case studies that demonstrate your capabilities to prospects, rather than working for free.

5 Thinking that winning clients will be easy

If you want to go fast, go alone; if you want to go far, go together.

I have known associates win a significant first client early on. However, if that means the adviser does not put in the work to build their reputation and relationships, it can lead to feast or famine later, and frustration in building up a balanced portfolio. I would expect it to take up to a year for an adviser to win their first client, and up to two years to build a sustainable portfolio, although with our experienced mentoring we find these times are normally cut to about six months and 12-18 months respectively.

As well as avoiding these mistakes, there are things you should do. Make sure you identify the regulations you need to comply with, such as money laundering, and decide whether or not to apply for a practising certificate. In any event I would definitely recommend obtaining professional indemnity insurance cover, having seen the financial impact a lack of cover can have on an adviser.

You could go it alone, but do still seek out good mentoring support. This is particularly useful for the hard times, such as when you can’t get your ideal prospect to engage, but it’s also good for someone to encourage you.

Consider joining a network of portfolio FDs and FCs, particularly if you want to continue to learn and develop, receive practical support, extend your network, and be able to outsource work such as management accounts production, bookkeeping or even marketing. I often quote the African proverb: “If you want to go fast, go alone; if you want to go far, go together.”

Find out more at vdnet.com

Related resources

About the author

James Shand, owner, vfdnet, and experienced virtual finance director

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