Joining the financial advice sector at the age of 21, Bellpenny chief executive Kevin Ronaldson says he was considered something of a rebel.
“I joined Hambro Life Assurance [later Allied Dunbar] straight from Oxford University, and with one of my brothers being a lawyer and the other an accountant, my family questioned what I was doing because in those days financial advice was seen as sales,” he says.
And despite “falling into” financial services, over the next 18 years, Ronaldson built up Hambro Life’s most successful-ever individual sales franchise.
As a sole trader, he managed 500 customers and the highest level of business ever managed by a single adviser at the firm.
So what drove that success? “Hard work and delivering on client expectations,” Ronaldson says. “I made sure I gave my clients exactly what I said I would.
“Looking after clients and fulfilling the trust they place in you as their adviser is not rocket science.”
In this respect, advice has not changed in the 35 years since he started out, Ronaldson says.
“My maxim was and continues to be, ‘look after your clients’. The biggest difference back then was the lack of technology, which meant the interface was much more personal than it is now.”
In 1997, when Allied Dunbar was taken over by Zurich, Ronaldson sold his business to the provider and joined the Allied Dunbar board as product and marketing director.
Joining “the corporate world”, as he puts it, was a major change.
“It was my first experience of managing corporate politics. Until then, I only had to manage myself and my PA.
“It was challenging, but challenge is what you want from a career.”
In 2005, Ronaldson left to set up network Intrinsic Financial Services as one of six founding members.
He says the depolarisation of advisers in 2005 and the introduction of mortgage regulation in 2004 meant this was an inflection point for the industry.
He says: “I felt the future lay in increased choice – delivering more products and more services to clients. And that meant my future lay in going back to my roots as a distributor.”
Building up a network from scratch was “tough”, says Ronaldson.
“Anybody who has started a business will tell you that. It always takes longer than you think to get it set up in the first place and to find willing investors. It takes a lot of hard work and commitment, but I’m long enough in the tooth in this industry to be able to see the opportunities.”
In April 2012, Ronaldson left Intrinsic to set up consolidator firm Bellpenny.
He says: “I decided to set up Bellpenny at the time of another inflection point for the industry – the approach of the RDR.
“I anticipated a lot of firms would have to change their business models and leave the industry, making the RDR a catalyst for acquisitions.”
He says acquisitions is also a long-term feature of the market as “the average age of a financial adviser is about 57, so this is an ageing population”.
Ronaldson adds: “Bellpenny is there to say, ‘If you are thinking about selling up, we are here as a willing purchaser and we can look after your clients because we have the right experience’. I have sold a business and I have looked after a large number of clients in the past so this is a safe home for firms.”
There are a number of other consolidators in the market operating varied models.
Bellpenny pays a cash consideration up front and says it would like the advisers to stay on as employees after the acquisition, although they can leave if they wish. The firm requires a high level of integration post-acquisition, with firms taking on Bellpenny branding.
Ronaldson says: “The reason we do things the way we do is because we are looking to build long-term relationships with clients and if advisers have been looking after those clients successfully, why wouldn’t we bring them on board? Our attrition rate – the percentage of clients which leave following the acquisition process – is just 1.6 per cent, so we must be doing something right.”
The biggest challenge in integrating businesses, says Ronaldson, is the quality of data and management information from firms, which can “vary greatly”.
Bellpenny has so far made 21 acquisitions, adding the largest and latest earlier this month with the buyout of Torquil Clark from Skipton Building Society for an undisclosed sum.
The deal brings 16 advisers and £900m assets under advice to Bellpenny, taking its total number of advisers to 56 and total assets to £2.5bn.
Torquil Clark also brings an execution-only business, TQ Invest, to Bellpenny, which Ronaldson says will be offered to all its clients in due course following a review of
He says: “This means we can offer something extra to clients and allow them to work with Bellpenny in whatever way they choose to.
“It will also help us to attract new clients.”
£5bn in assets
Ronaldson says the firm plans to achieve £5bn in assets under advice within five to seven years of its launch before looking for an exit strategy.
He says Bellpenny expects to announce several more acquisitions before the end of the year and the timeframe of its exit plan could be brought forward.
But he concludes: “What we will never do is go too fast and drop the ball so we cannot look after our clients appropriately.”
What’s the best bit of advice you’ve received in your career?
Never burn your bridges as you never know when you’ll need to re-cross them.
What’s keeping you awake at night?
Am I being the best I can be?
What has had the most significant impact on financial advice in the past year?
The Budget and changes to annuity rules.
If I was put in charge of the FCA for a day I would…
Spend some time understanding exactly what good advisers do to look after their clients.
Any advice for new advisers?
Work hard, listen to your clients and be respectful of the trust they place in your hands.
October 2012-present: Chief executive, Bellpenny
2005-2012: Chief executive, then deputy chairman, Intrinsic Financial Services
1997-2005: Product and marketing director, Allied Dunbar
1979-1997: Financial adviser, Hambro Life (later Allied Dunbar)