Given that Allan Rosengren says work is his main hobby, it is not surprising the Falcon Group chief executive has ambitious plans for his company.
As chief executive since the company became a non-listed PLC in 1985, Falcon recently made news with its joint venture with Stroud-based Inde-pendent Financial Services.
Rosengren, who prides himself on his strategic vision, thinks link-ups such as this are part of an industrywide trend. He firmly believes businesses have to be big to survive.
He says a wave of consolidation has been sweeping financial services, starting back in the 1950s with the banks and now finally reaching IFAs. He believes future capital adequacy requirements will fuel this phenomenon among product providers, which IFAs will be forced to reflect.
Rosengren says: “One hundred IFAs combined are worth much more than a hundred single IFAs.”
Falcon Group and IFS combinbed would have 50,000 clients. Annual turnover of the two amounts to £9m.
While merging back-office functions will lead to increased profitability and the ability to grow the business quicker, there is more to it. “This is a way of protecting ourselves. We are also looking to consolidate with other firms. This is not the end of our consolidation but the beginning.”
Falcon Group has exten-ded its offices in Clifton's Triangle near Bristol. Rosengren lives only five minutes from the office over the Clifton suspension bridge, with his wife and two sons, aged 10 and 13.
He used to race cars but now describes himself as “much more staid”.
While he is a proponent for defensive consolidation, he is far from being a doom merchant. He believes there is some truth in the assertion that IFAs have complained too much when they have been doing remarkably well.
“I can't see many IFAs struggling. Most are doing quite well, thank you. If you look, IFAs are spending remarkably little on marketing.”
He believes IFAs act as a kind of quality benchmark and effectively drive down costs. He points out IFAs have increased their market share at the expense of all other forms of distribution.
As for the forthcoming son of Myners report that so many IFAs view with trepidation, Rosengren does not believe it will be terribly negative.”If you compare us with Europe, we are more regulated and compliant.”
Despite his Continental origins, he is unwilling to be drawn on how the EU and the euro might affect IFAs.
His name comes from his Swedish diplomat father, whose career led to Rosengren being born on the island of Menorca some 43 years ago. By the time he came to England when he was 15, he had lived in 16 countries. Not surprisingly, he describes himself as cosmopolitan and still speaks Swedish.
As for another Labour Government, he is sanguine. Against prevailing IFA opinion, he thinks Labour has been quite good for financial services as a whole. He cites in particular the lowering of capital gains tax for business assets from 40 to 10 per cent.
While he can understand the consternation that the move to regulate products has caused, he thinks it has been beneficial. Rosengren says: “If the end result is that people who need to save have bought stakeholder, then the result has been beneficial for the population as a whole.”
But why, given their success, should IFAs be driven to consolidate? Apart from protecting the freedoms of IFAs from predatory providers, he has two further arguments.
First, there is the high average age of the IFA, which means many will be looking towards retirement. On the other hand, those who want to expand and grow their business will have to merge.
When asked what will be lost in his scenario of IFAs predominantly becoming bigger firms, Rosengren admits an intimate relationship akin to that of a GP with his patient might become a casualty.
Lost, too, will be the notion of IFAs serving the needs of the whole of society. For him, consolidation goes hand in hand with a shift up market.
IFAs are in the fortunate position of being able to select clientele and will seek to work with the middle market and above, he says. “We can add much more value for someone who has a significant portfolio. For someone who just want to be able to save £10 a week, it is difficult to see what value we can add,” he says.
But above all, his strategy is based on continuing independence. “Our objective is to rem-ain an IFA. We exist to serve our clients and we can do that much better being independent.”
Ambitions for the Falcon Group include stockmarket flotation at “some time in the future” together with more mergers and acquisitions. Given Falcon's rise to prominence, it will be interesting to see which other IFAs will be asking for its hand.