The deal has finally been done after a failed attempt and several other potential suitors and now Millfield chief executive Paul Tebbutt is looking ahead after the merger with Keith Carby's Inter-Alliance to form the biggest IFA firm in the UK.
Armed with £15m in loans from Axa Sun Life, Friends Provident, Prudential, Scottish Widows and Skandia Life, Tebbutt finalised the deal last week and immediately ran into fire from the press and IFA rivals for the way the deal was set up. But Tebbutt says he is not one to lose too much sleep over such criticism, believing he has seen enough in his life to understand the hows and whys of what he describes as “uninformed comment”.
Before coming to financial services in 1972, Tebbutt had a number of diverse jobs around London, including working in the accounts department for a gentlemen's club, doing public relations for a film distributor and working as a cashier for a casino. “At one time, I was the youngest casino cashier in London. It was an amazing introduction to a very different life.”
Tebbutt grew up in Holloway in North London in the 1950s and 1960s. His father worked in a foundry and he says in those early years money was tight.
Casino life was a real culture shock for the young Tebbutt, working from 6pm to 7am, and he says he learnt some surprising lessons on how the other half lived. “I was shocked one night to see someone walk into the casino and lose £50,000 on one spin of the roulette wheel. That type of gross waste made me sick to my stomach.”
He says from that point on he has never gambled, believing it to be a mug's game and a waste of money and time.
Another great concern for Tebbutt is drug abuse. He believes in drug counselling and education for young people. He is a parent and believes that parents and teachers need to talk openly and candidly about drugs with children “who learn a lot of the wrong lessons through their peers and on their own. Life is short enough as it is without making it any shorter with hard drugs”.
Tebbutt has had to confront his own mortality on more than one occasion. He was pronounced clinically dead after an accident at the age of 17 and then once more after a tonsillectomy in his 30s. “It is a humbling experience that makes you think about life and why it is worth living. I now love every day and make the most of it from the outset.”
Towards the end of his time at the casino, Tebbutt felt his career was stalling. He was told by a friend of his about a financial services company called Property Growth Assurance. He was attracted by the idea and got a job there to make his entry into financial services.
Tebbutt says his days before financial services were a time when some life lessons were learnt. As the accountant for the Hunt's Club, he became friendly with the chef and the wine waiters. “Although I learnt a lot about accounting – which gave me a good base in finance, the real lessons I learnt were about etiquette, food and wine.”
H e has a passion for good food and wine and cooks as much as he can, many of the dishes variants on what he was taught at Hunt's. His favourite dish is slow cooked lamb, which he roasts with herbs and garlic, and eats with a Château Margaux: “It is a long drawn out process, but well worth the wait.”
Also well worth the wait, he says, is the deal with Inter-Alliance, which was on and off over the past year. He is excited to be working with Carby and believes he has similar views on the industry and where to take the new company. “Carby has done a great job in turning around Inter-Alliance and has dealt with all its recent issues.”
On Inter-Alliance's liabilities, Tebbutt says they are under control and are all identified. He says both himself and Carby are “dead against dumping these liabilities”, saying the practice is bad for the industry and “the FSA needs to close the door on it fast”.
But critics have been lining up to take potshots at Tebbutt and Carby, especially because of the £15m in loans that needed to be taken out from providers to complete the deal.
Tebbutt is blunt to his opposition. “That is not a lot of debt for a deal like this. They are all five-year loans with different terms. We would have got the money from banks rather than providers but we couldn't. Banks do not understand our industry. They would not lend to us because we are not in continuous profit. banks only want to lend to you when you do not need the money.”
He is damning of people criticising the deal without what he says is an understanding of a “large, plc plan”. “A lot of these 'rival IFA firms' that are criticising us have no idea how to run companies of the size of 1,800 advisers. They have no idea how a good plc is run. I would take notice of the chief exec of Shell or Tesco but why should I listen to these people if they do not know what they are talking about. These small people will not be well enough informed.”
He is equally irked by suggestions that the loans may influence the Millfield and Inter-Alliance multi-tie deal, which will be called Millfield Alliance. “We have been working on our multi-tie offering for a long time and the loans will not affect the make-up of the panel, positively or negatively.”
Tebbutt says he has been looking at the US model for multi-ties and believes five to be the optimum number of providers to put on the Millfield Alliance panel. But he says that whether or not the panel members are those which have lent the money will depend on other factors.