What do farming and financial advice have in common? More than you might think. Senior Qualitative Researcher Philip Leigh draws parallels between his worlds cultivating insights and crops.

I write this article as the NextWealth team emerges from a winter of intense research for a number of market reports we will soon be publishing, and whilst we prepare for our not-to-be-missed annual conference on 19 March (you can buy tickets by following this link).

It also feels like a good time to take stock as, in my other life running my family’s Wiltshire farm, we ready ourselves for the spring planting period.

I am the current younger generation of many farmers on my father’s side. Our farm grows mainly wheat, barley and grass as well as managing the land under environmental stewardship schemes.

At times, my two lives feel a world apart. In just one day, I might be sitting with a client discussing our research findings on how to communicate the value of an advice proposition; fast-forward 8 hours, and in the evening I’ll be lying underneath a plough getting covered in dirt as I change the shears ready to get going early the following morning.

In other moments, I’m struck by how similar the challenges, and the highs and lows of these two sectors can be.

Hidden value: Where would we be without quality financial planners and environmentally responsible local farmers? We’d like more of the population to benefit from both. Sadly, the value often tends to go unrecognised. In, the words of the (unlikely) farming hero Jeremy Clarkson:

“You need a doctor once in a year and a fireman once in a lifetime, if you’re unlucky. But you need a farmer three times a day.”

 How many times a day do financial planners impact their clients’ lives? I interviewed a consumer recently who brought this home to me when she described how a chance encounter with a financial planner led her to an early retirement from her teaching career and she now runs a part-time business that she loves.

Regulatory cost and uncertainty

Like financial advisers, farmers invest vast amounts of time (and often unaccounted cost) to ensuring the highest standards. Meeting the ‘Red Tractor scheme’ standards on our farm is a prerequisite for us to be able to sell our produce and earn an income and I can liken it to Consumer Duty. We agree with the principles, but good businesses were pushing themselves to high standards anyway, and the cost of demonstrating compliance makes it difficult to run a profitable business. When it comes to future-proofing our farm (and securing choice and quality for consumers), we would like to see regulation that understands our business better. In both farming and financial advice, there are clear opportunities for regulation that uses more widespread data-driven insights to really focus attention where it’s needed, to tackle inequalities in the supply chain and further drive efficiencies.

Changing roles

Rarely a day passes that I don’t have a conversation about value in financial advice. The role of a financial adviser is a balancing act: spend more time in understanding what clients want and need – because the client assessment of value is no longer just about portfolio performance – but do so with a lot of pressure on the cost of business. For farmers, a drive to the bottom on price by (super)markets, global political and economic challenges and an ever-increasing focus on balancing environmental needs with food production and security, is causing them to question what farming ‘is’, what is expected of them in terms of food production versus land management, and what this means for their role in the industry – even their identity.

 What does this mean for the future of these two sectors?

Businesses in both farming and financial advice are continually assessing what these shifts mean for how they can measure and demonstrate their value and charge fairly and profitably. We see many advice firms reassessing their fee models, while on the farm we’re adapting to new potential income sources such as carbon credits. In both industries, firms are realising the efficiency-driving potential of technology for more precise oversight of their operational processes and tapping into shorter, more vertically integrated supply chains.

As a stakeholder in the farming industry, I appreciate the efforts of groups such as the Royal Countryside Fund that help us navigate change by providing insight and thoughtful content. What’s missing is that these groups often focus on just one element of the supply chain – farmers. We need the wider picture to be included to reflect that the responsibility for upholding standards whilst shouldering financial risk, in order to deliver value, should not rest solely with farmers; as well as to understand what’s happening further up the chain, and to get some insight into what consumers value about the work we do.

That’s our aim at NextWealth: to help businesses across the market adapt and thrive amid disruption.

Despite the challenges that I see in both farming and financial advice, both industries have a way of engraining that feeling of doing it because you love it and instilling a drive to deliver value in order to thrive. We just need to learn to be a little less hidden in how we do that.

To find out more about NextWealth and our upcoming reports including the Future of Financial Advice, Consolidators and Aggregators, and NextWealth Live – as well as consultancy and events on financial advice businesses, investment propositions and adviser tech – get in touch at enquiries@nextwealth.co.uk.