John Charcol executive chairman Ian Darby is trying to explain the new identity of his IFA business, the recently rebadged Wren Sterling. The national IFA formerly known as Towergate Financial became Wren Sterling in April – “Wren” for a sense of history, buildings and strength, and “Sterling” for its connotations of money and value.
“Clients tell us they think it feels big, safe and established,” he says. “The logo is a compass. The idea is we are guiding people through their financial lives.”
Meeting with Money Marketing seven months after securing the ownership of both Wren Sterling and John Charcol in a private equity-backed management buyout, Darby is now in his fourth stint at the broker and second with the IFA firm.
Recruited by John Charcol as a graduate trainee in 1984 by now managing director Walter Avrili, Darby climbed through the business until 2000, when he helped to sell it to Bradford & Bingley. Darby became B&B’s group commercial director and stepped away from John Charcol for broader responsibilities, only to rejoin as chairman after a 2004 management buyout.
So when the business was sold to Towergate in 2007, it was perhaps no surprise he followed a year later, also taking on the leadership of the insurance broker’s consolidated financial advice business, constructed out of a raft of acquisitions, under the Towergate Financial brand. Darby left three years later, feeling it was unlikely to get investment from a parent that was interested in general insurance in the midst of a financial crisis.
After 15 months at Aviva as interim retail director and subsequently taking up an ongoing role in the world of private equity, Darby returned to the business in March this year.
“I like the John Charcol brand and I like what it does for customers. We finally have the team, the environment and the backer to fulfil its potential,” Darby says.
“There were good reasons why the market and John Charcol ought to flourish. I knew the reasons that were holding it back and I knew we could fix that.”
It has not all gone smoothly, however. Only months after his appointment as Wren Sterling chief executive, Warren Page, who succeeded Darby at the helm of Towergate Financial, stepped down, with Darby taking on the role on an interim basis. Darby says it was always the plan for him and Page to review his position upon completion of the MBO but says Page had “a tough few years” between a draining sales process and running a business that was not being fully supported by its parent.
In the meantime, he says his own position as both chairman and chief executive will be maintained for the foreseeable future. “At some juncture, I’ll do something else but at the moment I’ve got a big agenda. What is clear is that it needs me and my management team to be doing what we are doing,” he says.
Darby admits both the FCA and private equity backer Palatine were keen to discuss fears of misselling during his time at Towergate Financial before rubber-stamping his appointment. The regulator and Towergate are continuing an investigation into the sale of ETVs and Ucis, although the broker retained the liabilities for both as part of the Towergate Financial MBO. Darby is not contributing to the regulator’s review of what happened.
“I was comfortable with what we were doing and I’m still not sure it’s been concluded there was anything wrong done either,” he says. “The regulator worked with me and Palatine on this acquisition in detail for months. It is fully aware of who I am and what role I was going to play, and I assume it would not have authorised me if it didn’t think that was appropriate.
“Both were keen to ensure the regulatory and risk and governance processes for a newco were robust and strong. It is the same thing you want for any business.”
Regardless, Darby is confident about the potential for growth on both sides of the business. John Charcol, he says, will be well positioned to increase its scale when it takes its share of a planned £4.5m investment in IT and infrastructure to strengthen and separate the businesses after three years amalgamated under one brand in a larger group. He adds that a long-mooted interest rate rise will also be good news.
“In our call centre, as soon as there’s talk of a base rate change, traffic goes up. There are millions of people sitting on incredibly low base rate tracker variable mortgage rate products that will do something when they need to or when they think they need to,” he says.
“Gross lending is just over £200bn but it was something in the order of £365bn at its peak. I can’t see the demand dropping, even if there’s an interest rate rise.”
Meanwhile, part of the plans for Wren Sterling will see the IFA take advantage of John Charcol’s existing relationships with building societies to put more advisers in branches, building on a deal with Darlington Building Society, announced in July.
It is a growth strategy that steers away from Wren Sterling’s consolidator roots at Towergate and aims instead for recruitment and increased distribution capability.
Darby says acquisitions will likely be back books, rather than entire firms. “My first year was about fixing the foundations to be able to do that, and that has been my real focus: to make sure I have something to grow on the back off. Years two and beyond will be about bulking up in scale and capability.
“It will be a bigger business than it is today but that is not the only driver for me,” he says. “If they’re really well run, businesses with the right quality of earnings, with a high client service proposition and quality advice that is repeatable are massively sought after.
“There are not many businesses that can tick all those boxes. We certainly can’t today but it is what we’re trying to be.”
March 2015-present: Executive chairman, John Charcol
March 2015–present: Executive Chairman, Wren Sterling
2012–present: Advisor, Palatine Private Equity LLP
2010-present: Chairman, Connection Capital LLP
2012-2013: Retail director (interim), Aviva Life Insurance
2008–2011: Chief executive, Towergate Financial
2006–2008: Non-executive director, Sesame Services
2005–2007: Chairman, John Charcol
2000–2005: Group commercial director, Bradford & Bingley
1984–2000: Managing Director, John Charcol
What is the best advice you’ve received in your career?
Surround yourself with great people.
What has had the most significant impact on financial advice in the past year?
The election result.
What keeps you awake at night?
If I was in charge of the FCA for a day I would…
Chair a workshop with representatives from the industry and the regulator, and a number of financial planning clients to debate whether the industry is meeting their needs.
Any advice for new advisers?
Giving people advice on financial planning is extremely fulfilling. Always put your customer first and invest in developing yourself and your job satisfaction will be enormous.