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Life expectancy is rising. Mike Fosberry of Smith & Williamson discusses successfully advising a growing number of retirees.
I think the successes are people obviously living much longer nowadays.
Longevity I think it one of the biggest issues we face economically from a family life perspective. It's a huge impact in terms of well an economic perspective in terms of things like care costs, etc.
And how do you deal with longevity?
People are, let me say, they're retiring at 65, they may have a spouse who's three years younger than them on average, that's normally the case. One of them is likely to be alive in 30 years’ time, actuarially speaking.
So that's a huge issue because their retirement life may in some cases be longer than their working life. So do you have enough money when you retire to sustain yourself through what could be a very long retirement?
And bear in mind that the latter stages of the retirement are probably going to be in pretty poor health as well. So how do you cope with that? How much money do you need to cope with that? And so we've got to get people focusing on those issues now.
Government is looking at it.
Obviously we've seen extension of state retirement age. For most people it's going to be 67 or 68, perhaps longer in the future.
That's only part of the solution the government will put to it. They can't afford to increase the amount of money set aside for things like care bills, we haven't got the money to do it.
So there's going to be a huge incentive or a huge requirement for people to fund for themselves.
And that's part of my job, making sure that they focus on those issues.
In terms of success, well we have a lot of clients who are well into retirement, in their late 80s, who seem to be surviving on the income and capital that we're able to provide them with in their retirement.
So I'm touching wood when I say this because ultimately peoples’ expenditure patterns, etc differ.
But in the main I think we've done a pretty good job. And I think one of the issues there is being in a situation where you're able to provide that long term advice and have the capability of being able to do that as an organisation.
______________________________________________________________________________________Life expectancy is just one issue that is changing the ways businesses are thinking and operating. Inside Finance will bring you more perspectives on the big issues in 2014.
There is a big difference, there is a big difference because you walk in a room now and people know of you. Before, you'd walk in a room and people would like... they might know you, they might not know you but only through introductions.
I walk in a business meeting now or a business room now and it's like oh yeah that's Colin he won all those entrepreneur awards last year.
So it gives you that bit of negotiating power as well, and I guess belief in the business BetterBathrooms and the belief in you as an individual to back you.
So much so, because we've done so successful as a business, we've just done an equity release deal, so we've just got an injection of a lot of money, I can't comment on until after Sunday because Sunday papers hopefully will be publishing.
But the whole thing brought together and it's, like I say, it's been an amazing 12 months.
I think the National Business Award has been great in getting publicity involved with it. So I think the first thing is, as a result of winning, this will already create some prominence. But I think this is a great piece they can use to attract to their customers.
Talk to your customers about it, mention it to your suppliers, it's something to be really proud of.
There are not many who make it to be winners of the National Business Awards, it's been running now for 12, it's the 12th year, so it's very elite group of people.
Shout it off the rooftops and let people know that you've been part of it.
It's quite straightforward, you can't do it without them and I've been lucky from day one. My original first ever member of staff, my assistant, sales assistant, he become assistant manager, the manager of the Wigan store. Then he become the area manager, he's now in control of about 32 people and large turnover.
But if you can imagine from where he was to where he is now he's a completely different individual and one of the cultures that we've got in BetterBathrooms is you've got to innovate, you've got to come up with new ideas.
You've got to test the boundaries. Obviously a lot of these things get signed off and we've got this idea it's... and they bring it to my table and we say okay well what do you think about this, what do you think about that? But if it's bad they're not fearful, ie, I'm saying bad, if it doesn't work, some companies would go, well he's terrible or we have to get rid of him but we're not like that.
We allow people to make mistakes and the thing we don't allow is for when it starts and the project hits and it starts to actually have a negative, we just cut it fast. So as long as you can reverse engineer that whole process what you've just done. So I'd say all the team, the management team, even some of the guys down on the floor level, they come up with ideas and without their ideas and without their input you can't make it work.
And I mean we've done some amazing things recently, we flew the ex vice president of Disney World Florida over, a guy named Lee Cockerell. And the whole success of Disney World from a people side and the culture side has really been down to Lee. So it wasn’t that long ago we flew him over, he spent a couple of days with the staff, I still get regular emails off him every day, he's a little bit of a mentor to me. So we've done that investment there and then we've got a training strategy for the managers where okay we've got a concept, this is how we want to operate.
But they then have individual mentors and one to one trainers and managers and they then guide them individually throughout the process. Because obviously everybody's got their own problems and some people are good at statistics, other people can't create story out of statistics so it's helping them on those things.
Other people really... we've got some managers who have... are not outgoing as a people so they have to work on the people side to make sure that they're motivating. Some people find it hard to say hello when they walk into work, I'm one of those people.
Usually I want to get from my front door to my desk as quick as I can do to work as fast as I can do.So I've had to learn the skill of saying hello and smiling, so we all work on it together, we're all learning every day. But I can't do it without them and to be honest it's a lot more about them than it is about me now because I've moved up to sort of CEO level and I'm mentoring people who are 15 years older than me in management levels as well in some cases. So it's a bit strange at times but it's good.
I've had another Sky interview and a few more BBC Radio interviews but also because of winning entrepreneur of the year you get other opportunities. So I'm involved in the tenner campaign which is a government backed campaign where we give £10 to students at high school and they basically use that £10 to buy a product and resell it.
And this is something that's rolled out nationally.
So I went to a school in Manchester and worked with their students and it was amazing, like you're talking about 11, 12, 13 year olds who were thinking like entrepreneurs, they were really into it. I guess the Apprentice TV thing's really helped that. So I've been involved in that project, I've been involved in other charity stuff.
So it's just allowed me to get to another level for people to actually recognise that actually this guy's quite good at business and not only that, if this kid at 32 years of age can do all of this I wonder if he can share that knowledge.
So I've actually got involved in a few other things since then, a few other businesses and I'm mentoring someone now who's 21 years of old who's the next, in my opinion, the next super geek and he doesn't mind me saying that.
I'm a bit of a geek myself. So it's been an amazing journey this last year.
Amazing success stories. I think probably one of the big ones we did a few years ago was a large child nursery business, household name that had branches around the country.
Came to us, the business was performing reasonably well but they had a very large loan, debts, and they needed to be restructured.
We managed to arrange a restructuring, partly using the insolvency process, without it getting into the press, more importantly without the business suffering any stigma of insolvency which is an important thing if parents are sending their children to a nursery every day.