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MM Profile: Peter Craddock

Perspective Financial Management’s group operations director has a few golden rules when acquiring new businesses – do not lose the advisers and take care not to destroy what made that business successful in the first place.

Perspective Financial Management group operations director Peter Craddock is adamant that the business is more than just a consolidator. “We are a national adviser group and we are building a sustainable business, regardless of future ownership.”

Although the business is chaired by Paradigm Partners founder Paul Hogarth and based at the same offices, Perspective is run as a separate entity and since its establishment only four years ago, it has grown to become one of the top 15 IFA businesses in terms of revenue but Craddock says the business has a low profile and is “a bit of a secret”.

Craddock’s career began at Commercial Union, which he joined straight from school. He was with the firm for 20 years and rose to area director of CGU following the merger with General Accident.

He says the merger was more of “a collision” and after two years and just a few days before the announcement of the merger of CGU with Aviva, he left to join Skipton Building Society.

His role at Skipton was to grow the diversification of the business and says working for former Skipton chief executive John Goodfellow was “a fantastic business education”. His job involved setting up the IFA strategy at Skipton, which grew to include Pearson Jones, Torquil Clark and Skipton Financial Services but in early 2011 Craddock was made redundant. “I had effectively restructured myself out of a job and had taken Skipton IFA as far as I could.”

He set up as an independent consultant before joining Perspective. Craddock says the growth strategy at Perspective is not a case of seeing what businesses are available at what price. “So far, we have made 30 acquisitions but we have met with over 300 firms.”

Businesses have to demonstrate high levels of recurring income, profitability and a decent compliance record. The long-term growth target is to continue to increase assets under administration and turnover without having to meet a set number of buyouts.

“We are not slaves to a target. If you stick strictly to a target you are more likely to make bad decisions.”

However, the business does have some targets. Craddock says it is aiming to increase assets under advice from £2.5bn to £3.5bn in the next two and a half years and to boost turnover from £25m to £35m. He says the business needs to ensure 70 per cent of income is trail or repeat rather than one-off transactional business.

The firm wants to grow the percentage of assets run through platforms. It has £650m of its assets run through wraps and plans to increase this to £1.3bn of the targeted £3.5bn.

Craddock says in addition to making the quality of acquisitions central to the business’s expansion policy, he is also keen to ensure new acquisitions retain their individual identities and an element of flexibility in how they operate.

Perspective is able to make efficiency savings by introducing common approaches to areas such as accounting, regulatory reporting, cash management and compliance and Craddock says they do not want to destroy what made the IFA successful in the first place.

The individual businesses that make up Perspective continue to operate independently within the group and are not given a set investment approach to follow or told to use a preferred platform. As a result, Craddock says they have few advisers leaving the business following an acquisition and of the businesses that have completed the two-year earn-out period put in place, the vast majority of the principals of the individual businesses have remained. “One of the golden rules is do not lose your advisers. If you keep your advisers happy, you keep your clients and the business grows.”

As well as protecting the value of the business, Craddock says this approach helps to capitalise on local brands for marketing and business development.

The one exception to the use of local identities for the Perspective brand is the corporate advice business. “Where we have gone national is on the corporate side. This is important, particularly to be able to attract business from accountancy firms.”

Perspective Corporate Solutions now makes up 15 per cent of Perspective’s overall turnover and Craddock says this is exactly where they want it to be.

He says he does not see any problems with the RDR. “We treat it as history. Bring it on tomorrow. Adviser-charging and professionalism in our sector are overdue. In terms of the key drivers for the RDR, they are right in our view.”

Many IFAs are weighing up whether to remain independent but Craddock feels the industry is too hung up on the issue. “Clients view independence as being on the same side of the table as them, not being able to offer advice on every single option in the market.

Instead of worrying about the exact description, Craddock says it is more important for the Perspective businesses to achieve chartered status, as this is much more attractive to clients.

“In future, we could well offer a combination of independent and restricted. Chartered status is much more important.”

Born: Plymouth
Lives: North Yorkshire
Education: Left school with three A-levels but later became a chartered insurer and chartered director
Career: June 2011 to present: group operations director, Perspective; 2011: established his own consultancy business; 2000-11: director of financial services, Skipton Building Society; 1979-2000: various roles, rising to area director, Commercial Union/CGU
Likes: Working with people of high integrity, industry and skill, challenging myself and constant personal development
Dislikes: Unwieldy bureaucracy and people who do not strive to use their full potential
Drives: Vauxhall Insignia
Book: The Lord of the Rings by JRR Tolkien
Film: Aliens
Album: Favourite album is Season’s End by Marillion but currently listening to Amaryllis by Shinedown
Career ambition: That Perspective becomes the pre-eminent UK national financial advisory business
Life ambition: To see my son, Oliver, who is 13, grow into the best he can be at whatever he chooses to do in life
If I wasn’t doing this I would be… A business coach

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