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Doug Crawford

The chief executive of Personal Touch Financial Services is diversifying the business in a bid to create a greater sense of community and a different kind of relationship between advisers, networks, product providers and members
Interview by Gregor Watt

Personal Touch Financial Services chief executive Doug Crawford wants to change the relationship that IFA firms have with Personal Touch. He says: “Our vision is to be the financial services community everyone wants to join and nobody wants to leave.”

He talks of creating a sense of community between the IFAs, Personal Touch and the product providers and says this is more than just management waffle.

In January, the company reorganised its field salesforce and now has 30 staff across the country. This follows a restructure of the business last October which saw the company move the recruitment and development of IFA firms back under its direct control rather than outsourcing to selected member firms.

Crawford, who was appointed chief executive in April 2010, says this follows a decision to diversify away from the core membership of Personal Touch. “As a new chief executive, I was aware of the company’s historic position as a mortgage/protection business and made a decision not to confine ourselves to that area. We wanted to be in four product areas – mortgages, protection, general insurance and IFA/investment and pensions.”

The IFA/investment and pension business is now the fastest growing part of the company. Last year, this increased from 3 per cent of new business to 20 per cent. At the same time, the size and incomes generated from the mortgage-based side of the company has fallen. “In 2010, mortgages would have accounted for a quarter of income. Back in 2007, it would have accounted for 55 per cent. The business has been repositioned in a much lower-risk way.”

Personal Touch also offers a number of other niche services, from will writing to surveying and debt management. This is part of a strategy to diversify and offer extra services but Crawford says these are auxiliary to the main business.

In fact, he says the extra strands and the reorganisation of them (several loss-making businesses were closed in 2009) have distracted from the performance of the main business.

In October, Personal Touch reported a £3m loss but Crawford says this figure does not reflect the experience of the financial services business. “That referred to the holding company. Financial services, even in 2009, made a profit of around £2.1m. All the other little companies in there that were loss-making in 2009 pulled the numbers down. It is a bit of a bugbear because it does not reflect the fact the network business continues to be profitable.

“We have not had our results audited yet but we will finish ahead of 2009. It will be another year of profits between £2m and £3m for 2010 for our financial services.”

The network continues to be the mainstay of PTFS. It accounts for 90 per cent of the business, with around 850 member firms and 1,750 advisers, and Crawford says regulatory pressures mean the network model is still very viable.

“There will be a number of directly authorised firms that, because of the increased regulatory burden, either from a capital adequacy requirement or an advice liability perspective, will not want to be in that area and will move to the safer haven of a network. We have seen some quite big firms move across in the last three or four months.”

But the traffic is not all one way and Crawford says the business is keen to expand the number of DA clients.

“Our focus traditionally has been on appointed representatives. AR numbers were almost the be all and end all. That is important to us and we are experiencing growth in AR numbers but we also want to grow the DA proposition.”

PTFS was linked to a number of potential acquisitions in 2010 as well as one enquiry about a buyout of PTFS itself.

Crawford confirms an offer was made but refuses to comment further. He is happier to talk about potential acquisitions. After looking at both Home of Choice and Pink it was decided they were not the right targets. Crawford says he is interested in the right acquisition at the right price rather than buying for its own sake.

“There are too many acquisitions that are all about ego. There are high-profile examples such as RBS but there are lots of other ones where it is the wrong thing to do. If the right opportunity is there at the right price, we would want to be at the table.”

Crawford says the aim for him and his team is to build value in the business. With PTFS majority-owned by private equity firm Lloyds Development Capital, he says the end goal is for the business to be sold but that is not what is keeping them busy.

“At some point, like any private equity business, they will look to sell their investment. That is not something we are actively looking to do at the moment. We are focusing on developing and growing the business.”

One way of growing the business while increasing value to its member firms is a new referral service launching this month.

Crawford says the ability to refer clients to other specialist advisers should pay dividends to all involved but a lack of trust has held this back. PTFS has developed a referral system based on a legal contract that involves the two adviser firms, as well as the network, to set out the terms of the referral.

“Many advisers have arrangements on an informal, local level but, on a network scale, if you have 800-plus firms with 1,700-1,800 advisers, the possibilities are huge for the adviser and the network.”

Crawford sees initiatives like this as essential to creating value for all the businesses involved and the sense of community he is striving for.

“I want individual members to see value in being a part of Personal Touch, so they can say that has added ’x’ pounds to my business that would not have been there previously.

“That has got to be the priority for this year. That will drive this sense of community that we want to achieve.”

Born: Belfast, 1961
Lives: Solihull and Perthshire
Education: Royal Belfast Academical Institution, MBA Heriot Watt
Career: 2010-present: chief executive, Personal Touch Financial Services; 2000-09: Cattles Invoice Finance (now Aldermore); 1997-2000: Commercial Union (now Aviva); 1995-97: sales and marketing director, Fishers
Likes: Honesty
Dislikes: Arrogance, people who think they are better than everyone else
Drives: Jaguar XK
Book: General fiction or autobiographies but I only get a chance to read when I am on holiday
Film: The Quiet Man
Album: 21st Century Breakdown by Green Day
Career ambition: Being a chief executive is a genuinely privileged position as you have the ability to have a positive influence on people’s lives. To help people fulfil their potential and become what they can become is fascinating and is one reason why I do what I do
Lifetime ambition: I would love to have been a professional rugby player but it is probably a bit late for that now
If I wasn’t doing this I would be…In some sort of people development business


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