Speed has always been a passion for Lee Birkett, the chief executive of online network Prestbury Holdings, which deals with non-regulated business. Having loved fast cars and motorcycles from an early age, he has only been able to indulge his passion from his armchair since founding Prestbury around 10 years ago.
Recently, however, Birkett – at 32, one of the youngest chief executives of a plc in the financial services industry – has signed up to race Porsches after gaining his racing driver's licence. “It is great to be back in the driver's seat. I have a passion for motor sports and exotic cars, so this is the perfect fusion of both those interests.”
The father of two young girls has also bought a motorhome and is keen to make these weekend racing trips a family affair.
Ironically, it was after a motorcycle accident had left him temporarily disabled and out of work for 18 months that Birkett set up Prestbury Holdings as a partnership in 1993. “I could not carry out my duties as an adviser with Allied Dunbar and decided to go out on my own.”
He jokes that his business partner and co-founder Stephen Keenan effectively became his driver as Birkett recovered from his accident and they set about launching a small consumer-focused brokerage selling mortgages and personal loans in the North-west.
He bought a fax machine, put ads in the local newspaper and hoped that business would come in. “In the early years, we had no money and just a handful of credit cards. Six months from launch, we had made almost no revenue.”
Birkett and Keenan examined why the company was failing and decided that using a middleman, or master broker, had resulted in low margins. Birkett decided to go to direct to the finance houses. “It was a bold move at the time. I only had three years' experience as an adviser and was embarking on a relationship-building strategy not commonly in place at the time.”
But the shift in strategy paid off. After making only £30,000 in the first year, the company made £90,000 and £300,000 in the next two years. “This was fantastic growth and it came just from mortgages and personal loans.”
Birkett puts his success down to the company's unique business strategy. “At the time, I was one of very few people in that side of the industry that had a background in financial advice. This gave me the edge over other mortgage and personal loan brokers. I pushed an advice-based process rather than a product.”
With the business running well locally, Birkett decided to go national. Marketing the company through the London newspapers, he worked on developing a mortgage packaging proposition for consumers. He believes he was one of the UK's original mortgage packagers, signing deals with the likes of Kensington Mortgages and igroup.
“Again, it made sense to provide a complete service rather than rely on middlemen. The margins were higher and we were confident we could provide a better service for our clients by doing it all ourselves.”
While he was developing the consumer side of the business as www.loans.co.uk, Birkett also rolled out Solution Mortgages as a packager for the intermediary market.
At that time, Prestbury was a member of Misys. But Birkett says the company's online execution-only model came under fire from the network, which said the business was not compliant.
“This was an unnecessary problem. Misys had been aware of our business model from the outset. Our execution-only business was all non-regulated life and mortgages so the clash was ridiculous. We did not see it as sensible to be using Draconian IFA sales processes for this type of business.”
He says Prestbury went head to head with Misys for six months until it finally obtained a release from its contract. “We believed in our business model and were not going to be dictated to by Misys.”
Birkett believed that other similarly-minded IFAs would jump at the chance to go direct to a provider to sell a product with fewer overheads and soft-launched a new-look Solution Mortgages as Solution Network in 2001 to provide IFAs with access to non-regulated life and mortgages.
But Birkett has taken something of a beating in the trade press for having a business plan based on avoiding regulation. He rejects this as at best misinformed and at worst deliberately misleading. “People were calling our operation non-professional but we have the same high calibre of people who have simply decided to trade through our portal for their non-regulated business.”
Following depolarisation, Birkett says there will be no need to change the way that the operation runs. “We are operating today the way we will be required to after depolarisation. Our forms are with the FSA for being a controlling principal, our capital adequacy is there and we have our training and competence already in place.
“We are better prepared for depolarisation than most IFA networks out there and we intend to take advantage of this as much as we can.”
Born: Blackburn, 1972
Education: Comprehensive school
Career: 1988-89 – bank clerk at NatWest; 1989-90 – customer services at Adidas; 1990-93 – adviser at Allied Dunbar; 1993 – became founder and chief executive of Prestbury Financial Services; October 2002 – listed Prestbury Holdings on the Alternative Investment Market.
Career ambition: To be the most professional financial services distribution firm in the market Life ambition: Health and happiness
Likes: All sports, good food and good company
Dislikes: Cheats and people who do not stick to their word
Drives: Mercedes S500