Phil McGovern & his Rapidly Growing Financial Management Company

Phil McGovern is the Managing Director of MPA Financial Management Ltd., a financial services company based in Warwickshire, United Kingdom. The firm started in 1998 but since 2010 the company has grown rapidly – from managing £40M to currently managing £380M on behalf of clients. Here Phil tells Finance Monthly’s readers more about the services […]

Phil McGovern is the Managing Director of MPA Financial Management Ltd., a financial services company based in Warwickshire, United Kingdom. The firm started in 1998 but since 2010 the company has grown rapidly – from managing £40M to currently managing £380M on behalf of clients. Here Phil tells Finance Monthly’s readers more about the services that his company provides and offers his tips on
retirement planning.

Can you tell us more about MPA Financial Management and the services that it offers?

We believe in employing people who have high emotional intelligence and can relate to normal people. We spend a lot of time and money training our staff to high levels of educational achievement through the CII and we have a strapline of Inform, educate, inspire. We want to inform, educate and inspire our clients and staff to meet their long-term goals of financial and personal satisfaction.

We mainly manage money on behalf of clients in various tax wrappers and 70% of our business is pension-related. We also offer the full range of mortgages, life and health protection but over the years pensions and investments have grown substantially.

We offer 3 main services on the wealth management side:

-MPA Private Client for clients with investable assets in excess of £500,000 pa. They are offered quarterly reviews, access to discretionary fund managers or model portfolios or bespoke offerings. We also arrange special lunches with fund managers and industry speakers and access to other professional services.

-MPA Wealth offers pension and investment services from £75,000 to £500,000. We usually recommend a Model Portfolio service from our panel of MPS (5 companies) which are risk rated against Distribution Technology. Clients will get annual or biannual reviews (depending on size).

-MPA Lite is a cost effective solution for small portfolios which uses 7IMs passive risk rated portfolios, under £75,000 in size.

We also run a post retirement investment solution that combines Prudentials PruFund Growth (40%) with Brewin Dolphin Balanced, reducing volatility down by 2/3 and performance by 1/3 (as against using Brewins only).

We offer whole of market mortgage service and a will writing and probate service. We are increasingly involved in long-term care planning.

We are pension transfer specialists and have advised many clients on the merits of transferring out (or not) of defined benefit schemes.

 

Can you outline the process you go through to assess your clients’ current financial situation and assist them with identifying financial goals and concerns?

We complete a comprehensive factfind in the early stages trying to ascertain, in the clients’ own words what they are trying to achieve with their finances.

We spend a lot of time trying to work out the clients’ attitude to investment risk and their capacity for financial loss using our own in-house questionnaire.

We then recommend investment solutions that will match their risk and long-term plan and recommend the tax wrappers that are the most tax efficient way of investing the money.

We then ensure that we monitor the performance of the investments, and the tax consequences on an ongoing basis so that they meet their goals. We spend a lot of time communicating with them to keep them happy about their investments and helping them understand how they react as they do

 

How should individuals plan for early retirement? What options are available above and beyond a pension?

Ideally, they should start early. Many clients come to us just before or at retirement and want us to manage the money for them when the wealth has been built up.

There are many ways to structure a retirement plan. We tend to use ISAs, OEICs, investment bonds, EIS and VCTs to get a balance between risk, reward, income, growth and tax efficiency. We will also use investment property as another asset that can generate income and capital growth.

Advising on DB transfers has become a large part of the advice process in the last 2 years while transfer values are so high and that has to be factored in to the advice process.

 

In your experience, are individuals fully aware of their assets and worth so that they can take advantage of tax planning? Which types of assets are usually missed?

No, in my experience they do not understand the difference between all the tax wrappers we use. They generally have an idea of worth but we take a lot of time explaining the strategies that we use to maximise returns and minimise tax.

Maximising pension contributions using carry forward is complicated and they don’t understand that. Also, the planning for high-earners’ pensions and the Lifetime Allowance is something they don’t understand.

We maximise ISAs and invest other monies in a general investment account and use this to fund ISAs each tax year. This works up to £250,000 but over this CGT becomes an issue. Therefore, we then use investment bonds as a very tax efficient income generator.

We use AIM portfolios for IHT planning alongside trust work.

 

What solutions do you offer in respect of maintaining and growing wealth for future generations of the same family?

We can aggregate asset value for family members so that they can benefits from large fund discounts. Discounts start over £500,000 and children with an ISA for £20,000 could get the investment with no initial charge and a reduced ongoing charge with Family Discount.

We have joint meetings with children so that if anything happens we have met them.

Also, trust-based work and long-term care leads to dealing with the children and beneficiaries.

 

As a Managing Director of MPA Financial Management, what are your key responsibilities? What does a typical day look like for you?

My key responsibilities include managing the day-to-day business, the finances, recruitment, marketing, strategic planning, discipline, investment management and also looking after a large client book.

I sign off all the DB transfers for the company and get involved with compliance and process for DBs.

A typical day would be as follows:

-Wake up at 4am, check the company bank accounts to see what money has come in today;

-Leave for office at 7.30;

-Catch up on emails and paperwork. Probably review sign offs for DB transfers sitting on my desk (usually at least 6);

-Write financial planning report for a client;

-Go on various platforms to check on performance of various portfolios;

-Maybe have a review meeting with a client. Administrator will prepare paperwork, so will check for accuracy. Check Intelliflo back office system for notes of previous meeting. Look at Analytics for research on portfolio;

-Meeting with client lasts usually 1 hour. Pass on notes to admin and any work to do;

-Have meeting with Admin manager for updates on how things are going. Deal with any issues;

-Talk with Office Manager for any logistical issues need to know about;

-Constantly replying to emails from clients or reps;

-May meet with rep from investment company;

-If any spare time, I tend do some investment research or talk to clients;

-Get home at around 6pm and carry on responding to emails I have missed.

 

What is your vision for the future of the services that MPA Financial Management offers?

I want us to be a firm that is respected countrywide for the levels of service it gives to clients and the level of ethics it employs in dealing with everyone. I want us to help more and more people reach their financial goals without having sleepless nights.

Our long-term target is to reach £1BN in funds under management and to keep striving to drive down investment costs for clients.

 

Website: http://www.mpafm.co.uk/

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