Smarter Business Innovators: Bradbury Hamilton’s Sheriar Bradbury


A big part of your growth strategy since you set up the firm has come down to acquisitions. What made you decide to go down that route?

Before I moved into financial services I was training to be a chartered accountant, and I learnt a lot of their revenue was recurring. They did not have to constantly go out there finding new business, which I thought was a problem with the system in financial services at the time.

I also realised the IFA sector had a demographic problem. The average age was 55 and regulation was increasing. The way I saw it, there were going to be more exams and it was going to become more difficult for the direct-sales companies to survive. So when I set up the firm in 1993 my plan was to buy other businesses and consolidate their client banks. Since then we have acquired almost 50 firms, predominantly one-man bands. We have accumulated a database of 50,000 names, of which around 2,000 are active.

Saying that, we have slowed our acquisition trail over the last 18 months. When you are expanding through acquisition, particularly if you put the costs through the profit and loss account, it actually suppresses profitability. There can also be a danger of having less focus on the clients you already have.

What does an ideal acquisition look like?
For us, an ideal acquisition would be a firm with a turnover of up to about £1m a year, ideally with a recurring revenue stream that has a relatively low ratio, so we can add recurring revenue value. You also want access to clients with potential. A lot of the time, the owners of the firms we have acquired have had great relationships with clients but have not maximised their potential. Some of my biggest clients have come from the smallest deals.

A particularly good acquisition was an IFA that had a 50/50 joint venture with a Top 100 firm of accountants in Essex. We have an adviser based in its office already and are looking to get one or two more in. They have some great clients so the potential is enormous.

What are the biggest risks ahead for adviser firms?
The big issue at the moment is the costs being imposed by the regulator. Our Financial Service Compensation Scheme levy last year doubled to £48,000. Take the other regulatory costs into consideration and it amounts to a quite sizeable amount of firms’ turnovers. Given a lot of the problems are not coming from IFAs it is rather unfair. The Government is going to have to do something and I hope the Financial Advice Market Review can address it. If costs keep increasing, more people are going to leave the sector.

Are you considering a simplified advice proposition?
There is such a large percentage of the population no one is interested in giving advice to because they are just not profitable enough. Also, because of the large amount of expenses we are now faced with, advice is not cheap and many people cannot afford it. People that want a simple solution are not necessarily going to want to sit down face to face. We have a large database, of which a huge part is not cost-effective to service. Robo-advice may be able to monetise and provide service to those people. It is certainly something we want to spend time on developing.

What would your message be to advisers that feel stuck in a rut?
There is a feeling at the moment that it is a hard time to be an adviser but there are some positives to look at. The number of advisers has fallen substantially, so there is less competition. At the same time, there are a lot of people that need advice. This year we have a tsunami of automatic enrolments on the way. A whole host of people are not going to have done what they should have and will be in trouble. They will need someone to help them. If you are in the mass affluent, high-net-worth, SME corporate space there is going to be tonnes of work to be done.

What is the best lesson you have learned about running a business?
Never think that just because things are going well it will always be that way. It generally never lasts. So if you are making a good profit in a particular year, do not spend all your money. Keep reserves as preparation for potential problems.

What has been your biggest business achievement?
Last year was our best yet in terms of turnover and profit, which is very pleasing. Another big achievement was being one of the first to attain chartered status back in 2007.