Since Cavendish Grant merged with Chartwell in November 2005, the new business, based in Bath, has been developing rapidly.
The chief executive of the new business, former Cavendish Grant managing director Jim Grant, has come a long way since, at the behest of his father, he embarked on a career as an electronic engineer. He recalls: “‘Get a trade, young man,’ my father told me, but I had no love for electronics.”
Grant gave up electronics for financial services in 1986 as a sales consultant for Allied Dunbar. Working his way up during the next decade, he was eventually able to buy his first business. By 2000, he had formed advisory firm Cavendish Grant and, five years later, was looking to expand again. Grant recognised the potential for merging Cavendish Grant’s advisory business with the fund management services of Chartwell. Grant says: “It had discretionary fund management, direct sales, an execution-only offering and contacts and reputations we did not have.”
Today, the firm operates across four main business lines – Chartwell Private Client for financial advice, Chartwell Fund Management, the Chartwell Annuity Centre, and Chartwell Funding, an independent mortgage brokerage.
Before the merger, the two firms had a combined turnover of £3.6m but Chartwell investment director Craig Wetton predicts turnover this year to reach £6m. The business plan is plotting a course for £7.8m. He says: “Much of the growth is based on recurring, rather than initial, income.”
The latest addition to the Chartwell family came with the launch last October of online non-advisory service, theinvestorcentre.com. The centre has an online dealing facility administered by Cofunds and provides access to more than 900 funds from over 50 different fund managers.
The separation of Chartwell’s business lines made good sense to Wetton, who was originally involved in setting up the firm in 1995. He says: “The forte of advisers is in financial planning, not the dark arts of asset allocation and fund selection. Most IFAs are particularly poor at the latter but spend a lot of time getting involved in these activities rather than planning.”
Former police sergeant Wetton has been at Chartwell’s helm since the firm was formed in 1995. After a stint as director, he became chief executive in 1997 and took on the role of investment director after the merger with Cavendish Grant. He welcomed the 2005 change in leadership.
Chartwell had been owned from 2000 by Newday, a charitable organisation set up to invest in educational research. But, says Wetton, the parent company failed to deliver the investment in financial and human resources which Chartwell needed. He says: “The company lost direction, so the arrival of Cavendish Grant was a significant positive with its ambition and complementary business. We had previously worked under a paralysis of analysis.”
Wetton continues: “Having spent a number of years in that stagnant environment, it was a shock, albeit in a positive sense, to have to pull yourself into a different way of thinking and approaching decisions.”
Although Cavendish Grant acquired Chartwell, the board decided to adopt the latter’s brand as the umbrella name for the new business. It was a decision prompted partly by the advice of new addition to the board, former Tesco and Vodafone chairman Lord MacLaurin. The name change was a pragmatic decision for Grant. At the time of the acquisition, Chartwell had 30,000 clients and 60,000 contacts on its database, while Cavendish Grant had just 3,000 face-to-face advisory clients.
Grant says: “Chartwell was well known within our marketplace and had 10 years of experience in building relationships with clients and the press.”
Cavendish Grant’s clients also embraced the new brand, contrary to expectations, because they liked the associations with the name, explains Grant. He says: “Chartwell was also the family home of Winston Churchill.”
An underlying ethos of the company is that the employees should have a stake in the business. Nearly half of its 85 employees, from senior management and advisers to personal assistants, own shares in Chartwell. Grant says: “This adds a new dimension. Rather than simply being an employee, the staff have that shareholder mentality.”
He says the workforce have had to make some adjustments but even the management have not escaped. “I used to have a desk by the window but now I don’t,” he says wryly.
A focus on training and development has reaped rewards. Staff turnover is very low. In seven years of the advisory business, just two of 17 advisers have left.
Wetton says: “People leave because of lifestyle choices, such as relocation, not because they want a change of career.”
Despite demonstrating an aptitude in dealing with changes to their own business the pair are more reserved by the changes proposed by the retail distribution review. They believe the industry should be more professional and transparent but consider that the FSA’s discussion paper is “confusing” and “bizarre”.
Grant says: “If commission is such a big issue, why don’t product providers just stop paying it? There is room for them to be bold. If there were not any commission, then we would have to talk to clients about fees but commission seems to be going up, not down.”
Despite possible opportunities, Grant is critical of moves to redefine independence from the type of advice given to the way in which advisers are paid. He says: “I could make more money by charging a fee and only selling our own funds, and still be called independent. I would be manufacturer and distributor, and compliance would be an awful lot easier but for the industry this would be a huge step back.”
Wetton adds: “The paper is trying to shoehorn the reluctant masses into being transparent. Independence is the one term that clients understand. The RDR risks turning this on its head.”
Born: Johannesburg, South Africa, 1960
Lives: Salford, Bath
Education: St Peter’s School, Johannesburg, Manchester University
Career: 1995 to present: director, Chartwell: 1993-95 appointed representative, Equity & Law; 1989-93: sales consultant, ICI; 1986-89 IFA, Chase de Vere; 1981-86: Metropolitan Police sergeant
Likes: Can-do attitude, cider, rugby
Dislikes: Politics in the workplace
Drives: Mercedes Estate C-Class
Reading: James Patterson
Career ambition: To be part of a winning team
Life ambition: Retiring soon and skiing in Canada
Born: Aden, Yemen, 1963
Lives: Lansdown, Bath
Education: Singapore international school, Forres Academy Scotland, Hellesdon school Norwich
Career: 2005-to present: chief executive Chartwell; 2000-05: managing director Cavendish Grant; 1998: bought Premier IFA; 1996: bought David Shepherd IFA; 1992-2006: NPI broker; 1990-92: sales consultant Eagle Star; 1986-90: Allied Dunbar sales consultant
Likes: People who deliver, punctuality, beer, rugby, cars
Dislikes: Poor person management
Drives: Mercedes SL55
Reading: Retail Distribution Review
Film: Shawshank Redemption
Album: Bridge Over Troubled Water
Career ambition: Involved in growing a good quality business known for being among best at what it does
Life ambition: Retire in a few years and ski six months a year in the Alps