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  • Writer's pictureHale Portfolio

Thinking about becoming a Portfolio FD?




I was recently privileged to be asked to deliver a talk on becoming a portfolio FD by FD Recruit. I have summarised my talk below, and I am always happy to chat with people who are considering this as a career option. 


Useful knowledge and experience  


Accounting qualification  

Having completed a degree in Biochemistry, my accountancy career started in 'The Big 4’ audit and I qualified with the ICAEW. I know of other portfolio FDs that come from ACCA and CIMA routes, so whilst the industry body does not matter, I would say that qualification is essential as it gives clients a level of reassurance. 


Experience 

I gained my experience from a combination of Big 4 audits of multinationals, and in-house large corporates in accounting, business development, and controls roles. 

After my last in-house corporate role, I relocated to Yorkshire to join my family’s SME, working for several years as their part-time Finance Director. It was only at this point I felt I had the experience and confidence to know I could help SMEs in a Portfolio capacity. 


Experience now tells me that so long as you’re sensitive to constraints in SMEs they are just the same as large corporates. For instance, an SME may have only one person in a finance role, making it impossible to maintain the same segregation of duties found in larger organisations. This means you must find other controls to safeguard the company’s finances. So, if you’re able to find solutions whilst working within the SME's constraints, don’t let “I’ve only worked in big companies” hold you back. 


Likewise, if you’ve only ever worked in practice, you need to consider what experience you have in the preparation of underlying accounts, bookkeeping, systems, controls, and budgeting – do you know how the information that comes to you is created? There may well be work you’ve undertaken that can help SMEs, especially if you’ve had SMEs for clients. 


I’ve found it helps to be a generalist rather than a specialist. If there is something you don’t know then you can always talk to the company’s accountants if you have a specialist query – remember you don’t need to know everything. 


Personal Qualities  


  •  Extremely strong communicator  

Like any FD role, you need to be able to explain complicated financial information to non-finance people. Likewise, being a good listener is important as often I find myself acting as an owner's sounding board. 


  • Flexible  

You need to understand that your workload may not be consistent, as there will be busier and quieter times. 


  •  Confidence and self-belief  

You will be going out to find work and as accountants, we don’t necessarily find this easy as we are not used to selling our services. To start with, I did not like networking at all, however, once I realised that networking is having a chat with like-minded people it became much less daunting. 


  •  Enjoy helping people  

You will be helping your clients but I also believe it is important to help people in your network. 


  •  Enjoy variety  

I love that I can be working with a manufacturer one day, a construction company the next, and a bioscience/ tech company by the end of the week. I enjoyed the variety in audit, but not the hours. Now I control my workload whilst still having variety which keeps me on my toes. 


  • Organised and time management skills 

You will be juggling a lot of different client requirements, so you need to be organised and able to manage your time very well, otherwise, any personal work-life benefits of a portfolio career won’t be enjoyed. 



Ways to find clients  


The first step is deciding what types of clients you want to work with, in what industry, what size companies and their locations, etc. This will focus your attention and help you to find your ideal clients. 


Networking is key  

  • I recommend joining established networking groups such as The Chamber of Commerce, Professional networks, and regional ICAEW events. 

  • Personal connections shouldn’t be ignored, indeed - one of my first clients was someone I knew through coaching cricket. 

  • It is important to remember that networking is an ongoing process, you need to keep popping up to remind people of your existence to help build long-term relationships. 

  • Depending upon where you are based, you do need to be prepared to explain the concept of a PFD/ Fractional FD. I found that whilst it was a familiar concept in London, this has not been the case in North Yorkshire so have your ‘elevator pitch’ ready. 

  • Remember SME business owners rarely have time to network therefore it’s about how you get to the clients… I’ve found Accountants, Bankers, and Solicitors are my best sources.


 

Referrals 


  • Most accountancy firms understand what a PFD does and how their services can help both the clients and their practices. My work as a PFD helps clients transform disorderly situations, address underlying issues, establish strong financial governance, and train finance staff. This results in better quality information and improved returns for external accountants. 

  • Accountancy firms may also refer clients to you because they cannot support growing clients or because the clients require more time than the firm can provide. 

  • Insolvency practitioners - Insolvency practitioners are also a useful group. Not necessarily for links to their clients, although I have gained work this way, thankfully with a savable business. IPs network a lot, and the nature of their work means they have lots of contacts, especially with accountancy practices. This has been helpful to me as I was lucky to meet a few who were generous with their contacts! 

  • Other Portfolio FDs - It may sound counterintuitive to network with your competition; however, I find it useful. It’s a reliable source of knowledge and it’s nice to meet up with people in the same boat and share advice. There are times you might get a referral but are too busy to take the work on, so it is nice to pass the work on to your connections and vice versa. 

  • Other professionals who may refer you include bankers, funding providers, and solicitors so it is worth networking with these professionals too. 

  • Specialist recruiters - for example, FD Recruit and Headstar. Whilst they make a margin on your services, it reduces the need for networking which may be preferable for some people. 

  • Large chains of FDs - There are benefits to being part of a group - for example, they have dedicated staff for finding and securing clients, access to a network of colleagues for professional support, collaboration, and knowledge sharing, and less AML admin to deal with. The groups of course take a margin from the FD's income to cover these additional services, however, as they charge higher rates you likely will have a similar income working in a chain or as an independent.


 

Practical considerations 


  • Practicing Certificate - Some people say this is a grey area but, in my opinion, it is obvious that it is safer to get a practising certificate. The services I provide include the review and improvement of systems and processes, insight into the current financial position (management information), forecasting future performance, costings, and management team sounding board/ advisor. Additionally, my team provides bookkeeping services. I provide these services as an outsourced supplier and feel it’s essential to have a practicing certificate. For more guidance see here

  • Professional indemnity insurance - ICAEW requires practicing certificate holders to hold PI insurance. I do and I feel it is essential –we are only human and can make mistakes. 

  • IR35 - If you operate as a Limited company, which I would recommend, you need to be careful of IR35 legislation and consider each contract separately. There are checklists available to help you and if in doubt, seek guidance from your professional body. 

  • Financial nest egg - It’s unlikely you will find work straight away and it could take 6-12 months. Perhaps you are expecting a redundancy payout, or have personal savings, but you need to be prepared that work won’t arrive straight away. 

  • LinkedIn - LinkedIn is the expected place to have a business presence. I don’t think you can get away without being on there. It costs nothing and can be set up today. I use it as an extension of my networking interact with contacts, share posts, and articles, and publish articles like this one! 

  • Website - I view mine as a shop window where potential clients might do a bit of browsing. I believe clients will expect to be able to find out more about me and my site details the services I offer and introduces the team. I do not expect the website will directly bring me sales, but I still think it’s required. 

  • CPD - Putting to one side that it will be a requirement of your governing body, I believe CPD is essential as how can you advise clients if you don’t know what is going on with industry trends, developments, and innovative technologies that can help your clients? 


 

Benefits of a PFD Career  


  • The main benefit of this career choice is that it provides interesting and challenging work within brilliant businesses whilst providing the flexibility to fit around family commitments. 

  • I set the business up when my kids were 7 and 5 years old as I needed flexible work to enable me to be there for my kids, take them to after-school activities, and feel like I wasn’t failing everyone. Now my children are older and require less of my time, I can take on more clients and work full-time across them. 

  • There are lots of other reasons you might be considering a portfolio career and need the flexibility it can offer. 


Challenges of a PFD Career  


  • The biggest trap of portfolio work is the fear that you won’t find the next client and sometimes take on too many clients. I thought one piece of work was going to end by a certain date and so I lined up something else only for the first piece to carry on for another year! 

  • It is important to listen to your gut - if something and someone doesn’t feel right don’t do it. I started on a piece of work because I was scared nothing else would come along but it didn't feel right. I managed to extricate myself, but I wish I hadn’t bothered in the first place. 


If you are considering a PFD career and would like some advice, then I am always happy to chat. 

 

 

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