Personal Touch Financial Services CEO Max Wright is a little annoyed by the rumours that surrounded the network in 2012.
Wright took over as chief executive following the departure of Doug Crawford last February and, with several other senior managers leaving the business over the summer, there has been a lot of speculation about changes that may or may not be made to the business.
“The industry has a disproportionate number of people operating in the recruitment environment for networks who seem to have a problem with facts. We want to be transparent,” he says.
One issue that has got Wright’s back up is network member fees.
In September, PTFS changed its fees for members by moving from a charges-per-firm basis to per firm and per adviser. This has seen many firms’ fees increase substantially.
Wright says there were three reasons for the change. “The first thing was to remove all deals, special terms, one-offs, individual arrangements. All the administration is much simpler, much more straightforward.
“The second thing was to reflect more equitably the costs against the service for the membership. Clearly the numbers of advisers you have in the businesses drives some of the costs for us.
“The last benefit was we were able to encourage some of the dabblers to move on and we also had a chance to talk to some of the businesses we felt were not a fit with [us] and allow some businesses to move under the cover of price.”
Another issue for Wright is that of membership notice periods.
Last autumn it was rumoured that the firm was increasing its notice period for advisers from one month to three months.
He says: “That is complete bunkum. I think the origin of this story is at one of our events I was asked by a member if I could give people more than a month’s notice, and I said ‘I would love to give you three months’ and this has turned into three months’ notice.
“You drop in a pebble of truth and it becomes a wave of rumour.”
However, PTFS has introduced an option for member firms to increase their notice period from one month to three months if they wish. In return they will get three months’ notice of fee changes. A six-month notice period is also being offered.
Wright’s career in financial services started in 1987 when he joined Eagle Star as trainee business development manager. At the time he was also training to become an accountant. He says: “My mother was horrified that I was going to leave what was an appropriate career to get into financial services.”
Wright moved on to Australian firm Colonial Mutual, which was keen to expand into the UK. However, when sterling strengthened against the Australian dollar, the company gave up its UK plans to focus instead on Asia and Wright moved to Countrywide Independent Advisers, part of Misys.
At the time the business was seeking IFA acquisitions, including Financial Options, IFA Network and Kestrel Network.
Wright recalls dashing between hotels to get the deals done in time. “It all felt very ‘City’ and very glamorous,” he recalls, but while it suited his lifestyle at the time he says it is not something he would want to do now.
Next Wright joined EMX as chief executive. Set up by the Association of Unit Trusts and Investment Funds – the forerunner of the IMA – EMX was a dotcom business created to automate the trading of investment funds.
Wright says he came on board in 2002 in the final round of fund raising that brought investment from Hargreaves Lansdown and Skandia.
“It was a typical dotcom start-up. It had spent a lot of money, more than £10m, and its daily revenue was less than £25 a day,” he says.
Unlike many dotcoms, however, EMX managed to fulfil its potential and by the time it was bought by Euroclear in 2007, it was making several million pounds profit each year.
The terms of the deal included a two-year earnout, so in 2009 Wright joined Personal Touch, initially as a non-executive director.
When Crawford left PTFS last February, Wright stepped into the day-to-day running of the business, a move he describes as like “moving from being director of football to manager”.
His first few months as CEO appeared a bit bumpy, but Wright says it did not feel that way inside the business. “It may have looked bumpy from the outside, [but] we had a plan and we have been operating to that plan and so far we are slightly in front of the strategy and the plan.”
The changes to the business will inevitably lead to advisers leaving the network, but Wright says he is happy with this outcome.
“Everyone always looks for the floor level. What I am interested in is consumer outcomes. What we are trying to get to is a business where we have a network of high-quality firms, with high-quality advisers, driving good customer outcomes. The number is less important than the quality of advice they deliver.”
In October, PTFS announced it was cutting its workforce by 12 per cent, but Wright says ending bespoke charging arrangements has enabled it to cut its own costs without damaging service levels.
The business is split 90/10 in favour of mortgage brokers over investment and pension advisers, but Wright says the network was deliberately quick to declare it was to be restricted under the RDR.
He says the change was one of labelling, rather than the process of advice. “It is much more important for advisers to be well qualified than to be independent,” he says.
Wright is confident the business is in good shape to meet the RDR and he is equally bullish about the mortgage and protection side of the network and its prospects under the MMR.
“If I was a lender I would see the networks as offering me comfort over quality. MMR will increase the need for mortgage brokers. It will lead to opportunities for us to recruit quality firms into the network.
“That is the big deal from the MMR for brokerages: it is satisfying the lenders over quality.”
One bump in the road was the removal of PTFS from the Abbey for Intermediaries fast-track panel last autumn.
“We had a small number of brokers who the Abbey believed hadn’t responded to it. I am confident that the brokers we have are quality mortgage brokers and I am sure if you asked other lenders they would say that is the case.”
However, Wright is in no hurry to get the fast-track back. “We were reviewing the merits of fast-track. We are not rushing to get it back,” he says.
Born: West Bromwich, 1964
Lives: London and Lincolnshire
Education: Winslow Grammar School, Preston Polytechnic
Career: 2012-present: chief executive, Personal Touch Financial Services; 2009/12: non-executive director, PTFS; 2002/09: chief executive, EMX; 1999/2002: network director, Misys; 1987/97: strategic accounts, Eagle Star Life
Likes: People who do what they say; working people who are enjoying themselves
Dislikes: People who confuse rumour with fact
Drives: Mini Cooper
Book: Jonathan Livingstone Seagull by Richard Bach
Film: The Incredibles
Album: Chewing the Fat by Blue Rondo a la Turk
Career ambition: To make sure I stay true to myself
Life ambition: Live a long time and be happy
If I wasn’t doing this I would be: Chopping wood