We are in the eye of the IFA storm. We want to play in what is going to be a very uncertain sector over the next few months.” With his tongue at least partially in cheek, Birchin International chief executive Rick Abbott is explaining his company's position now it has acquired national IFA Park Row.
After years specialising in helping financial institutions outsource their training and recruitment activities, the move will see Birchin concentrate on becoming an advice group.
A well-trodden path it is not but Abbott is keen to steer the business into an area he believes promises greater rewards at a time of sweeping regulatory change. “I believe our asset value as a public company has never reflected the true worth of the business. We wanted to be part of a leading IFA to exploit the opportunities that will arise during a period of change and consolidation.”
While Abbott is fairly vague about the motivation for such an unusual move, he is less opaque about his vision for the new group, which will be rebranded Park Row plc. Through a recruitment drive and the establishment of new branches, Abbott hopes to double its number of RIs to 400 within the next 12 to 18 months and intends its annual turnover to hit £50m by 2006.
It will be no easy task but Abbott is fairly bullish about his chances. He talks a good game, speaking of raising the public profile of the group, ensuring conformity in quality of service across the branch network and building on the good work that Park Row's management team has done over the last few years.
“We bought Park Row because we really liked the drive of the people there. They have done a fantastic job since 1998 and we are looking to free them from the everyday management tasks they have had to perform to get them doing what they do best – building the business.”
Park Row's management will be unshackled from the grinding mundanity of tending to accounts and the like, while Abbott will be busy seeking out potential acquisitions to bring into the group. Some will be rebranded under the Park Row banner but this will be no franchise operation and the IFAs with strong local names will keep their identities.
When pushed, Abbott will admit to having “a number of exciting opportunities” on the go but, when asked to name names, his tone informs you that this is an avenue not worth travelling down.
Keeping things on a strictly need-to-know basis is one of Abbott's fortes, having spent more than two decades as a corporate financier before he made the switch to Birchin in 1998.
Working for firms such as ABN Amro, Bank of America and Morgan Grenfell, he raised the finance for some major deals, including the £630m privatisation from British Rail of rolling stock company Eversholt Leasing in 1997.
It is this deal that he is most proud of. It eventually secured a huge profit for the MEBO consortium that acquired the company – it was sold a year later to HSBC for £1bn – and sated his desire to pull off the near-impossible. But even though it came at the pinnacle of his career as a corporate financier – he was global head of financial institutions at Grenfell – the deal convinced him that his future lay beyond the banking world.
“To get the management to realise that they could buy the company themselves from a third party and then for them to sell it on for a £370m profit was very satisfying. It was creating something from nothing. It was one of the reasons why I switched to what I am doing now, making the most of opportunities I have created.”
Abbott says he earmarked the IFA sector as a potential area for him to move into two years ago, when he thought it was clear there was going to be some seismic regulatory changes in the market. In his view, none of the existing distribution channels – bar IFAs – are capable of cross-selling products efficiently.
Still, he is already looking beyond being the chief executive of an advice group and says, ideally, he would like Park Row to become a provider of retail financial services. “There may be product niches we look to develop ourselves in stockbroking and private banking because having in-house products always helps. It is something we are debating at the moment.”
Another source of debate is currently in the Abbott household, where the rising proficiency of his 14-year-old daughter Georgina at the piano is causing her dad some consternation. At 47, Abbott senior has been playing for nigh on 40 years and prides himself on hammering out a mean Bohemian Rhapsody or Elton John oldie. But his daughter is already beginning to upstage the more experienced maestro and he is not taking it well.
“I play for around three hours every weekend but my daughter now plays better than I do, which is a bit sickening. But I am a piano freak. It is very therapeutic and a lot of fun.”
Lives: Near Winchester, Hampshire.
Born: November 30, 1954.
Education and qualifications: Sedbergh School, degree in business studies from City of London University.
Career to date: Bank of America 1978/85, Samuel Montague 1985/87, Morgan Grenfell 1987/98, ABN Amro 1998/2001
Career ambition: “To be successful.”
Life ambition: “To be healthy and happy.”
Likes: Wine, opera and travelling.
Dislikes: Tardiness, arrogance.
Peers say: “He has seen good and bad businesses so he should know how to run one.”
Car: 10-year-old Land Rover.