How I approach financial planning, what I think the job is really for, and why Chapter3 is fixed-fee and deliberately small.
Most financial planning starts with what someone already owns.
The pension. The investments. The tax wrappers. Their attitude to investment risk, usually expressed as a number between one and ten.
Those things matter, but I think they are the wrong place to start.
The first question should be what you want the money to make possible.
What does enough look like? When would you like work to become optional? Do you want to spend more, help the children, protect the family, sell the business or simply know that you could stop if you wanted to?
Once those questions are clearer, the financial decisions become much easier to judge.
The portfolio is still important. It is just no longer the plan.
When I first work with someone, I am less interested in their investment statement than I am in their overall financial position.
That means looking at the business, pensions, ISAs, cash, property, debt, future earnings, State Pension, defined-benefit income, protection and any money likely to be given away or left behind.
More importantly, it means looking at how all of those things may change over the next twenty or thirty years.
A snapshot tells you what somebody has today. A proper financial plan shows what each part is there to do and how the decisions interact over time.
Take a fairly ordinary question: should you use investments to repay the mortgage?
A spreadsheet can compare the mortgage rate with an assumed investment return and produce an answer. That is useful, but it is not the whole answer.
Being mortgage-free may allow someone to reduce their hours, take a year away from work or retire without a large monthly commitment hanging over them. For someone else, keeping the mortgage and retaining accessible investments may provide more flexibility.
The calculation matters. So does what the decision changes in real life.
The same applies to the larger questions.
For a business owner:
For someone approaching retirement:
Those are planning questions.
Pensions, investments, tax wrappers and financial-planning software are tools used to answer them. They should not become the conversation simply because they are easier to measure.
A lot of financial advice still focuses heavily on selecting investments.
Investment choices matter, but for most clients the larger opportunities are structural:
These decisions affect tax, risk, flexibility and ultimately the lifestyle the money supports.
The product comes afterwards.
Before building a clever structure, I also want to know whether it genuinely improves anything. There is no point paying £15,000 to solve a £5,000 problem, or creating something complicated that the family will struggle to manage later.
Good planning is not about using every available option. It is about knowing which ones matter and which ones can safely be left alone.
A technically sound plan is only useful if somebody can stick with it when circumstances become uncomfortable.
Markets fall. Businesses have poor years. Tax rules change. Children need help earlier than expected. Parents need care. Retirement spending turns out differently from the forecast.
The plan should expect some of that.
Part of my job is to provide a second view when decisions are being made under pressure.
Sometimes that means reminding someone that a market fall was already allowed for. Sometimes it means changing the plan because their life has genuinely changed.
The important distinction is between reacting to short-term discomfort and responding to new information.
A plan should not be so rigid that it ignores real life. It should also not be abandoned every time the news becomes unpleasant.
Many financial advisers charge a percentage of the assets they manage.
That does not automatically make the advice poor, and there are very good advisers who use that model. It is simply not the model I wanted for Chapter3.
A percentage fee means the adviser's income rises as the portfolio rises. It may also fall if money is used to repay debt, buy guaranteed income, make a gift or move outside the assets being managed.
That does not mean the adviser will give unsuitable advice. But it creates a structural preference that I would rather remove.
My fee is based on the work, complexity and ongoing responsibility involved. It does not automatically rise because markets have risen or because a client has sold a business and temporarily has more money to invest.
That lets me consider the options without the fee changing the answer.
Sometimes the right decision will be to invest. Sometimes it will be to hold more cash, repay the mortgage, fund a pension, make a gift or leave money inside the company.
Fixed fees are also visible. Clients can see what they are paying in pounds and decide whether the relationship continues to justify the cost.
I think that is a healthy discipline for both sides.
Financial planning is personal work.
To do it properly, I need to understand the business, household, tax position, investments, protection, family circumstances and the reasons behind earlier decisions.
That becomes harder to maintain as a firm grows and the relationship is divided between several people.
I therefore keep the client list deliberately small.
Clients work directly with me. I write the plan, give the advice, attend the meetings and speak to the accountant or solicitor where needed. When something changes, the person responding already knows the background.
That does not make Chapter3 suitable for everybody. Some people prefer a larger firm with a broader team and more institutional infrastructure.
The clients who tend to value this model want continuity. They want one person to understand the whole position and remain involved as it changes.
That is the kind of work I enjoy, and it is the firm I wanted to build.
The aim is not to produce the most detailed plan or the most sophisticated portfolio.
It is to help people make better decisions with what they have already built.
That might mean:
Most of the value will not appear on an investment statement.
It will appear in the decisions made differently because somebody had worked through the consequences in advance.
I cannot promise a particular investment return, a certain retirement date or a life with no financial surprises. No honest adviser can.
What I can offer is a clear structure, disciplined decision-making and an ongoing relationship designed to improve the odds.
That is what I mean when I say Chapter3 is a financial-planning firm rather than simply an investment firm.
— Colin Bates
A 30-minute introductory call is usually enough to discuss the issue that brought you here and decide whether Chapter3 is likely to be the right fit.