Damian Keeling could be described as fastidious when it comes to business. As managing director of IFA consolidation vehicle Perspective Financial Group, he turns down 90 per cent of firms the company considers for acquisition.
He says: “We want to make sure they are comfortable with what we want from them and that they are compatible with what we want. The great majority are not.”
It is this exacting approach to acquisitions, combined with a wealth of experience in running businesses, that helped Keeling lead Perspective, which was set up in 2008, to its declared target of 20 acquisitions last year with its purchase of Leedham Independent Financial Advisers.
“It was the big aim to hit that number. We got to the end of our buying phase and we are starting again now. We have four new acquisitions on the go and they will be closing over the next three months. It seems a short time to get everything finished but there is a lot of interest out there, especially as we get bigger firms.”
Surprisingly, for someone running a business that has quickly built a presence in the industry, Keeling has not always been involved in independent financial advice. A chartered accountant by trade, he gained business experience first at accountancy firm Clarke Whitehill and then at insurance broker Carole Nash.
However, his recipe for success has remained unchanged. “The team is the most important factor in how well a business does. We have a great bunch of people at Perspective and we did at Carole Nash. They are very competent, meaning you can give them more responsibility and they can go off and be empowered.”
This laissez-faire approach also applies to Perspective’s attitude to the businesses it acquires. “Operationally, it is about leaving people alone – that’s our big thing. We let the firms we acquire get on with their life and we empower the local management teams to do most of what they want to do.”
Keeling describes overseeing all the firms as “a bit like spinning plates” but it seems he is doing more than keeping all the plates in the air. Perspective’s annualised turnover now stands at more than £17m and its funds under advisory management are in excess of £1.3bn. However, that is not enough for Keeling.
“I want Perspective to be half as big again at the end of 2011, with about 10 more acquisitions. It will be a busy year but we are just doing the best we can.”
When it comes to which businesses to acquire, Keeling says it is more important to get the right business than the right size of business and says Perspective will not necessarily be targeting larger companies in order to grow its base.
“We may not have the appetite for bigger businesses. I am probably happier buying 10 firms with a profit of £300,000 each rather than one £3m job. We are not fussed particularly about size.”
One thing Keeling and Perspective are fussed about when looking at buyouts, however, is how RDR-ready they are. As 2013 approaches, Perspective’s two-year earn-out period means that if IFAs want to maximise their value and leave the market on their terms, then it is decision time. Similarly, if they want to leave the market before the retail distribution review comes into effect, they should be looking to consolidators such as Perspective now.
“We are not changing our business model as the RDR draws nearer because we buy firms that are RDR-friendly in the first place. The RDR is not something to be scared of any more. At Perspective we will not be losing any sleep worrying if the regulator is going to make it tougher, as long as it is fair. We need these level playing fields.”
The increased transparency and improved client relations that will come with the RDR may start to materialise this year, says Keeling.
“We will see a move to a closer relationship with clients. Getting business through word of mouth is what most IFAs do but people are wary of IFAs and product selling because of the bad publicity the IFA world has received over the last few years.”
In fact, Keeling himself may have fallen prey to the negative publicity over IFAs before he joined Perspective.
“I have learned a lot about the IFA industry. The quality of what IFAs do is far higher than people would think from what is written in the press. A huge amount of hard work goes on on behalf of clients. I think IFAs need to blow their own trumpets more.”
Keeling believes online presence is going to be a big part of the IFA world this year, highlighted by a recent 120 per cent increase in traffic to Perspective’s website.
“Everybody knows you have got to have better web facilities. Although I can’t see any serious transactional work going on on the web – the products are too complicated for that – people will want to see their own investments.”
Keeling cites transparent platforms such as Nucleus as vital in advancing how advisers use technology.
“Making the products simpler and easier to understand in order to make advice accessible to mass affluents is going to be a big issue for forward-thinking IFAs. They will have to be aware of how they redesign themselves to cope with what the FSA expects from them, particularly in terms of transparency.”
The widely held notion that the FSA will get tougher this year is shared by Keeling, and not only in terms of platforms.
“We will see the FSA clamping down more this year. Its recent risk-profiling announcement is a good example.”
However, Keeling does not think an increased regulatory presence will affect Perspective too much. “I am not worried about it from our point of view. We just want to keep growing the business and see where we go in the next 18 months. I am pretty happy at the moment but if Perspective made it to a top 20 IFA, I would be even happier.”
Born: Huddersfield, Yorkshire, 1957
Lives: Hale, Cheshire with his wife Pauline
Education: William Hulme’s Grammar School, Manchester; degree in English Literature at the University of Kent
Career: 2007-10: managing director of Perspective Financial Group; 1996-2006: managing director at Carole Nash Insurance; 1981-96: managing partner, Clarke Whitehill; 1979-81: chartered accountant at Clarke Whitehill, London
Likes: Food, wine and classic cars
Drives: A 1934 MG P-type and a 1959 MGA but a Range Rover day to day
Book: The Wind in the Willows by Kenneth Grahame
Film: Citizen Kane
Album: In Rock by Deep Purple
Career ambition: To be successful
Life ambition: Happiness for my wife and daughters
If I wasn’t doing this I would be…Less grey