Top five mistakes to avoid as a new portfolio FD or FC

portfolio FD career

Top five mistakes to avoid as a new portfolio FD or FC

James Shand is an experienced Virtual Finance Director and owns vfdnet, here he shares mistakes he wishes he’d been told to avoid when starting his portfolio finance career 18 years ago.

What I wished I’d known when I stepped into the portfolio FD world

The variety and independence of being a portfolio FD are great, and I would not change my choice of career for anything. However, what would I want to tell myself 18 years ago when I started out? Perhaps not to go for every part-time FD role, even when I lacked relevant sector experience, or that it is much easier for a business owner to buy into a defined, fixed cost solution rather than a vague part-time offer? It was my experience of wise mentoring in the early stages, combined with a passion to ‘level up’ the playing field against experienced portfolio FDs that I originally set up vfdnet.

I’m going to share my top 5 mistakes to help you avoid making them and carve out a successful portfolio career from the off! Sharing these mistakes is my gift to you, I wish someone had told me when I started out, it would have saved me time, energy and money!

Top 5 rabbit holes you don’t want to go down as a new portfolio FD or FC

  1. Seeking work in the wrong sector. For instance if your experience to date has been in banking, seeking clients in FMCG probably won’t be very successful. A good step is to identify sectors where you have established a good track record, then expand this by thinking about the broader sector that the business operated in. I would definitely tell my younger self to seek out a more experienced portfolio FD to bounce off my ideas about generating work, rather than to ‘boldly go’ out on my own. Mistakes, particularly at the start of your portfolio career, tend to cost much time, and time costs money.
  2. Setting your fee level incorrectly (too high or too low). It is a good idea to ask around to understand what other advisers typically charge for their services to avoid pitching your rates excessively high or too low. Even better still, devise standard solutions with defined scope, allowing you to offer these to prospects on a fixed cost basis; this will increase your likelihood of success. You could build up your own bank of client solutions, or alternatively tap into proven, pragmatic solutions, such as our diagnostic ReadiMaps, which I now make available to our associates so that they don’t need to re-invent the wheel!
  3. Doing free work for a prospect hoping to prove yourself. This can be very enticing, as we all love to be valued for our advice, so when we see a challenge which we can solve, the temptation is to outline to the prospect how you can solve their issue, and in the process give away the answer! Instead spend some time writing up your own experience, not as a traditional CV but as a series of projects. Then turn these projects into case studies to demonstrate your capabilities rather than working for free!
  4. Thinking that winnings clients will be easy. I have known associates win a significant first client early on, however if that means the adviser does not put in the work to build their reputation and relationships, it can lead to feast or famine later, and frustration in building up a balanced portfolio. I would expect it to take up to a year for an adviser to win their first client, and up to 2 years to build a sustainable portfolio, although with our experienced mentoring we find these times are normally cut to about 6 months for first client and 12 – 18 months to build a good sustainable portfolio.
  5. Poorly thought out marketing and online presence. You need to develop what your business is all about, including your core values, and your key services, which all go to making up what could be described as your brand. Too often independent advisers don’t invest in their brand, which becomes clear looking at their website. A good website should also include good strong case studies, client testimonials and details of your experience. vfdnet associates piggyback off our website, so avoiding this investment, at least initially which can help enormously when you are starting off.

Bonus: Make sure you identify the regulations you need to comply with, such as money laundering, and decide whether or not to apply for a practicing certificate. In any event, I would definitely recommend obtaining professional indemnity insurance cover, having seen the financial impact a lack of cover can have on an adviser.

Don’t go it alone

Our community at vfdnet have learnt these mistakes the hard way (take a look at our Virtual Finance Director and Virtual Financial Controller profiles) and we now have solutions to help you avoid going down these rabbit holes and derailing the growth of your portfolio career.

You could go it alone, but still do seek out good mentoring support, particularly for the hard times, such as when you can’t get your ideal prospect to engage, but also for someone to encourage and believe in you. Do consider joining a network of portfolio FDs and FCs such as vfdnet, particularly if you want to continue to learn and develop, receive practical support, extend your network, and be able to outsource work such as management accounts production, bookkeeping or even marketing. I often quote the African proverb: “If you want to go fast go alone, if you want to go far go together”.

In summary, I do love being a portfolio FD for the variety of work, and for being really valued by my clients, in a way quite unlike any employed situation. Being able to share this journey with other experienced FDs and FCs is a privilege and keeps me motivated! If this article has raised questions in your mind about a portfolio career for you please book a time in my diary for a chat.


James Shand
Virtual FD and vfdnet Founder & Owner

First published in ICAEW Independent Advisers and Consultants Community Newsletter


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