Carbon

A Message from Lord Pickles and Lord Blunkett, followed by Carbon's best practice article

The ability to listen and learn from one another has always been vital in parliament, in business and in most aspects of daily life. But at this particular moment in time, as national and global events continue to reiterate, it is uncommonly crucial that we forge new channels of communication and reinforce existing ones. The following article from Carbon is an attempt to do just that. We would welcome your thoughts on this or any other Parliamentary Review article.

Blunkett signature Rt Hon The Lord David Blunkett
Pickles signature Rt Hon The Lord Eric Pickles

www.carbonfinancial.co.uk

THE PARLIAMENTARY REVIEW
Highlighting best practice
32 | CARBON
Gordon Wilson, managing
director
Financial services companies often appear to live in fear of
setting realistic client expectations. In Gordon Wilson’s
experience, being open, clear and honest about costs
and likely outcomes builds trust, and results in more people
wanting to become clients. Sometimes, his company, Carbon
Financial, advises clients to spend more, invest less or even give
money away. Doing the right thing for the client is also doing
the right thing commercially if you want to grow in a strong
and sustainable way; his experience, and Carbon’s success, is
evidence of that.
The vision
I founded Carbon with four colleagues in June 2011. Our aim was to create a market-
leading financial planning and investment firm. We didn’t set out with any grand
ambitions for our size or scale; we simply believed that in trying to be the best we
could be across all aspects of the business, growth would come as a consequence.
After just four quick years, we were accredited as 2015’s Chartered Financial
Planners of the Year, which was a hugely satisfying achievement: the title is awarded
by the professional body for the financial planning profession, the Personal Finance
Society (PFS). As of 2018, I am a director of the PFS, and have been contributing to
the improvement of standards, professionalism and trust across the industry.
We have also won the Gold Standard Award for Independent Financial Advice
five years in a row, between 2013 and 2017. This award has been a real test for
us, as in the very detailed submission for this award we must show demonstrable
improvement year-on-year.
Where we are now
We have now grown to a staff of 40 with annual income approaching £5 million.
We have offices in London, Edinburgh, Glasgow, Perth and Aberdeen.
Above all else, we are most proud of our people. They are among the most highly
qualified professionals in the industry. That is not what makes them different,
however; we are in a business grounded in relationships, and it is the way that each
member of our team interacts with clients, and each other, that breeds success.
They truly care about finding the very best solution for clients, secure in the
knowledge that this is also the best solution for the business.
Values matter
We worked towards summarising the values that drive us:
»To be the best we can be » To do the right thing » To be free to be different
We feel strongly about openness and transparency, an area where the financial
services industry has room for improvement. Our team is supported in this ethos
through training and mentorship in doing the right thing.
AT A GLANCE
CARBON
»Managing director:
GordonWilson
»Established in 2011
»Offices in London, Edinburgh,
Glasgow, Aberdeen and Perth
»Services: Independent
financial advice for private
clients, business owners and
professionals
»No. of employees: 40
»Gold Standard for
Independent Financial Advice
winner – five years in a row
Carbon
33CARBON |
BEST PRACTICE REPRESENTATIVE 2018
We have another rule: that there
should be no surprises. When offering
investment advice, we are clear
and open about all risks, costs and
likely returns. This might seem like a
given; the financial services industry,
however, could do better.
Delivering the dream
1. First, name it
Step one for a client coming to Carbon
is to create a lifetime financial plan.
Most commonly, this plan concentrates
on what kind of life they want to lead
when the balance shifts from work
to enjoying their own rediscovered
free time. We encourage clients to
live their dreams and, rather than be
constrained about what they think
they can afford, we ask them to get
their bucket lists down on paper.
Once we are clear on what life is going
to look like over the next 20 or 30
years, we calculate a cost and work
back to the rate of return required,
ensuring they can enjoy all they want
without ever worrying about running
out of money. This plan then informs
the strategic advice we provide, advice
concerning the best ways to use
savings, property, business interests,
pensions, legacies and investments.
Our aim is to help clients meet all of
their goals – not just some of them.
2. Build the road map
In helping people to create a road map
to their financial and personal goals,
we probably spend more time advising
clients to spend and give away money
than we do advising them to invest it.
This is part of what makes us different.
We can do this because, unlike most
of the industry, we don’t pay our
teams based on the amounts of money
invested or fee income received. We
employ career financial planners who
share our values, and we pay salaries
with relatively small bonuses for going
the extra mile.Because of this, our
advisers are free to advise clients to do
nothing if what they have is perfectly fit
for purpose. They might even suggest
spending more and enjoying life,
or giving money to family or charity
during their lifetime so they can see
others benefit from their generosity.
3. Predicting the future
We are honest about people’s ability
to predict the future – specifically
the ability of fund managers. The
investment industry promotes the idea
that fund managers can pick shares or
that advisers can pick funds that will
outpace the market.
Unfortunately, data and academic
research works against them. We tell
our clients the truth, namely that the
chances of a fund manager achieving
more than the market return is under
one in three. Those odds are very poor.
We couldn’t possibly proceed on the
basis that our client’s plan had a one-in-
three chance of success with ouradvice.
4. Keep costs low
We focus on keeping costs low, this
being the most accurate predictor of
future returns. We invest in areas of
the market proven, through academic
research, to deliver excellent returns.
What lies ahead
On occasion, our honesty has put
Carbon at a commercial disadvantage.
We have lost business, especially where
the competition chooses to hide costs
or exaggerate likely investment returns.
It is important, however, to think long
term and stay true to our values. Our
success to date has demonstrated that
our philosophy on openness is working
and good business practice brings
good clients.
The challenge for the industry is to
embrace this wider view. Only when all
firms understand the real commercial
benefits of only giving advice in the
clients’ best interests will financial
services start to repair the deficit in trust
as we provide the vital services that
everyone in society needs to plan for,
invest in and protect our families’ futures.
Mark Christie, corporate
director, receiving The
Gold Standard Award for
Independent Financial Advice
from Sir David Amess MP
Carbon supporting sport
in the community
It is important
to think long
term and stay
true to our
values

www.carbonfinancial.co.uk

This article was sponsored by Carbon. The Parliamentary Review is wholly funded by the representatives who write for it. The publication in which this article originally appeared contained the following foreword from The Rt Hon Theresa May MP.

The Rt Hon Theresa May MP's Foreword For The Parliamentary Review

By The Rt Hon Theresa May MP

This foreword from the then Prime Minister appeared in the 2018/19 Parliamentary Review.

British politics provides ample material for analysis in the pages of The Parliamentary Review. For Her Majesty’s Government, our task in the year ahead is clear: to achieve the best Brexit deal for Britain and to carry on our work to build a more prosperous and united country – one that truly works for everyone. 

The right Brexit deal will not be sufficient on its own to secure a more prosperous future for Britain. We also need to ensure that our economy is ready for what tomorrow will bring. Our Modern Industrial Strategy is our plan to do that. It means Government stepping up to secure the foundations of our productivity: providing an education system that delivers the skills our economy needs, improving school standards and transforming technical education; delivering infrastructure for growth; ensuring people have the homes they need in the places they want to live. It is all about taking action for the long-term that will pay dividends in the future.

But it also goes beyond that. Government, the private sector and academia working together as strategic partners achieve far more than we could separately. That is why we have set an ambitious goal of lifting UK public and private research and development investment to 2.4 per cent of GDP by 2027. It is why we are developing four Grand Challenges, the big drivers of social and economic change in the world today: harnessing artificial intelligence and the data revolution; leading in changes to the future of mobility; meeting the challenges of our ageing society; and driving ahead the revolution in clean growth. By focusing our efforts on making the most of these areas of enormous potential, we can develop new exports, grow new industries and create more good jobs in every part of our country.

Years of hard work and sacrifice from the British people have got our deficit down by over three quarters. We are building on this success by taking a balanced approach to public spending. We are continuing to deal with our debts, so that our economy can remain strong and we can protect people’s jobs, and at the same time we are investing in vital public services, like our NHS. We have set out plans to increase NHS funding annually by an average by 3.4 percent in real terms: that is £394 million a week more. In return, the NHS will produce a ten-year plan, led by doctors and nurses, to eliminate waste and improve patient care.

I believe that Britain can look to the future with confidence. We are leaving the EU and setting a new course for prosperity as a global trading nation. We have a Modern Industrial Strategy that is strengthening the foundations of our economy and helping us to seize the opportunities of the future. We are investing in the public services we all rely on and helping them to grow and improve. Building on our country’s great strengths – our world-class universities and researchers, our excellent services sector, our cutting edge manufacturers, our vibrant creative industries, our dedicated public servants – we can look towards a new decade that is ripe with possibility. The government I lead is doing all it can to make that brighter future a reality for everyone in our country. 

British politics provides ample material for analysis in the pages of The Parliamentary Review 
The Rt Hon Theresa May MP
Prime Minister