The Addidi/Progeny independent financial adviser talks about the perks and pitfalls of investing in start-ups, a very British problem, and ‘job shame’ in the industry.
Anna Sofat co-founded independent financial adviser Addidi in London with her husband in 2008, with the aim of helping women grow their wealth and build their businesses. In 2019, Anna was named Financial Adviser of the Year at the Women in Financial Advice Awards. In December, Addidi joined Progeny, a national advice firm. This month, Anna won the Professional Adviser Personality of the Year award.
Growing up, what did you learn about money?
My biggest money lessons come from my mum and include not spending money needlessly, but also the idea that you can’t take it with you. She has a philosophy that what you need will come to you. This happens because you scale back on unnecessary expenditure perhaps, cutting your cloth as it were, or through adapting your mental attitude to be satisfied with what you already have. There’s a way of thinking right now that suggests that if you visualise what you want, and put your energy out there, then you’ll grow to be rich, for example, and abundance will follow. My mum’s philosophy is more about abundant generosity of spirit and being kind to people. While money buys you things and those items do have meaning, the main meanings in life are around family, love, and being a good person.
My primary school education was in Delhi, India. I moved from one capital city to another, arriving in London when I was 11. In India, education was very numbers-orientated. Maths held no fear for me, and I was at least three years ahead of my school classmates when I came to London. My brother was seven when we arrived in the UK and knew his times tables. Now, he is a bit numbers-phobic, and it’s interesting that this developed as he went through schooling in this country. I think “numbers phobia” is quite a British thing. During my time in the sixth form, I can remember banks visiting and talking about opening bank accounts, but there was nothing around money management.
Who takes care of the money in your house?
Both of us. In the early days, I took care of the day-to-day money because I was around at home more with our two daughters, and now it is the other way around, and my husband does it. All the big financial decisions are made jointly.
What was your first investment?
I started training to be a banker with Woolwich, which is now part of Barclays. I remember joining the pension scheme; being in financial services, there was definitely an understanding that pension savings were important. My father encouraged me to have an endowment, but the first conscious investment that I made was a PEP.
What was your best investment?
My husband and I have done some angel investing, and in pure money terms, it is probably one of those firms. We run a business angel club for women. As women’s wealth increases, they have to take their rightful place in the money world. Part of that is investing in small start-ups and small businesses because that’s where the vibrancy of the economy is. If you don’t invest in those little companies, they don’t grow up to be big ones. Over the last 10 years, I’ve invested in probably a dozen or so start-ups.
And your worst investment?
Probably a start-up. Such businesses can be amazing, but they are high risk and probably out of every 10, six or seven are going to go belly up.
What’s the best thing about your job?
Helping clients make things happen. I’m privileged to share the picture they have in their head about what their idyllic life looks life. Clients open up and share their hopes and aspirations. The fact that I can use my expertise and know-how to help them achieve their dreams is a privilege.
And the worst?
The financial services industry should know the value of things, but it doesn’t always. As an industry, we don’t acknowledge value beyond the bottom line sometimes, but things are changing. For a business to be successful, it’s not just about profit. If profits are up, that is because of the action that people have taken, but that is not always recognised.
As an industry, for far too often financial services has looked at money as a way of lining its own pockets. The industry charges the most for those people who can least afford it. Take credit cards and loans, for example, and the biggest price is paid by those on low incomes.
We haven’t learned to be good citizens in our industry yet. When we got more freedom in the 1980s and banking deregulation came in, there was a Wild West element initially, where people looked for the shiny gold. But it comes at a big cost, and 2008 was that cost. I had hoped that we would take a moment to reflect about how we were going to move forward, but I don’t think there has been as much of that as there ought to have been.
If you could change only one thing about the industry you work in, what would it be?
The industry has amazing scope to be a force for good for people throughout the world and we need to make it happen and also build a legacy that we can be proud of. Who is going to be proud of 2008? I know ex-City people who, for a number of years, did not want to be known as bankers and investment managers. I didn’t want to be known as an IFA for many years. I would like an industry where people are proud to be who they are. We should be able to say, from the top to the bottom: “I work in financial services and I do good.” HSBC, for example, are going to enable people without a permanent address to open a bank account. There’s a vicious circle, where if you have been homeless or have had to move out of your rental property, you can’t do a great deal in financial service. A bank facility is a basic function in modern-day society. Through good product design, some real hard-headed thinking around sustainability, and a little bit of work, we can have an amazing industry.
If you had to save money, what could you do without?
Lots! When I was a student at the University of Hull [where I read South-East Asian Studies], I had a weekly £10 budget. I cycled, avoided dining out at lunchtimes, and ate cheap meals.
What financial advice would you give your younger self?
To take more risk. Nowadays, women do need to consider taking more risk.
What do you do for fun?
I like yoga and reading. A favourite novel is The Alchemist by Paulo Coelho. One of my 2020 plans is to carve out more me-time, and perhaps take up dancing, as I love music.
In another life I would be a…
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