Skipton Financial Services managing director Simon Holt has just invested in a place abroad and would like to get the chance to use it. Resting on the Costa del Sol near Gibraltar, it is an apartment that, when finished, will be the perfect Spanish hideaway for him to escape from the busy series of acquisitions he has been involved in recently.
But it is not as if he needs to escape the hectic life of city, with SFS's head offices pleasantly located in the quiet Yorkshire market town of Skipton, overlooking rolling hills and dales. Holt quips that it is a nice place to shop, jog, raise a little family and run a £20m financial services business.
“You would expect a company as large as ours to be based somewhere like London or Leeds but out of this small market town we have developed somewhat of a quiet giant. We are big but others don't really see it because we do not have one consolidated brand.”
Holt points out that if you added together the turnover from all of Skipton's IFAs – which includes Direct Life & Pension, Pearson Jones, Private Health Partnership and Skipton Financial Services – it would be in the order of £40m-45m,placing them well at the top end of the market. Skipton is also quickly building an M&A strategy that will make it one of the most acquisitive players in the present market.
Acquisition and growth have become central concerns of Holt's over the past year. In his role as managing director of SFS, he recently secured the purchase of medical insurance specialist MIA and, as a director of sister IFAs Pearson Jones and PHP, he was also involved in the purchase of Pearson Jones and Direct Life & Pension. Through the process of buying and integrating, Holt has developed an appetite for acquisition. But he is a connoisseur with a choosy palate. Holt says there are two types of IFAs he is looking for – strong regional players with good local brands and well performing affinity brands.
On the local side, Holt cites Pearson Jones as the ideal buy, wanting to find more of the PJs of the world, with a strong local and regional reputation. He says they are hard to find – he is actively looking – but when you find them, they are more precious than gold, he says.
What really seems to excite Holt is the idea of building a good stable of specialist affinity brands.
“We bought MIA because it is a fabulous brand in its marketplace. We will let it run the way it always has but we will add to it things on the efficiency side. We can learn from MIA what are the key core competencies for affinity brands and hopefully cascade those ideas out to other like companies that we pick up along the way.”
But whether they be regional or affinity brands, Holt is still very particular about the size of any future purchases he makes.
“They need a certain scale of at least £4m-5m, otherwise I do not think they would have enough to offer us and, conversely, I do not think that smaller firms would be able to leverage our weight to their best advantage,” he says.
After an acquisitive 2002, Holt believes financial services is heading for a quiet year in terms of mergers and acquisitions. “It is an odd time with seemingly conflicting environments at the moment. On the one hand, you have industry issues such as the professional indemnity insurance crisis and piles of regulation, making selling a more attractive option. Many seemingly healthy firms are actually very close to trading on the margin. All this is pushing more people into a selling posture. However, bear market conditions mean that buyers are becoming very choosy. There are less and less people to sell to and this isn't likely to get better any time soon.”
But while many potential IFA buyers feel that the present market lets them cherrypick and that IFAs will take much lower prices, Holt has a different take on the issue. He describes IFAs as “interesting creatures” who are very independent and proud. “If they can't get the value they perceive to be correct, they are likely to say 'sod it' and not sell,” he says.
But he believes there is an inherent danger in this line of thinking and he argues that IFAs should be looking to get backing. “They will find it incredibly hard to survive if they don't. We all know that. businesses need to become more efficient and business models need to get away from back-office processing and face to face, which is inefficient. Financial services needs to get further away from paper-based systems. But the cost for IFAs to get the IT they need to become more efficient is huge. I think the only way forward is to partner with providers.”
Holt believes the industry has about two or three years before people start getting squeezed out. By that stage, he believes if you are not big, your chances of survival are slim. “There will only be about 10 or 15 big distributors for the big providers to deal with.”
Competition is key on his mind in his work and private life. An avid runner, he competes regularly in the Great North run and is a keen cricketer as well. But although he is a competitive by nature, he also describes himself as having no massive ambition or unfulfilled desires. “I don't think I have anything left to chalk off the board but enjoying life.”
He spends most of his leisure time at home with his family, creating a safe and happy home, concerned about the world his children will grow up in. “It is an old adage but things are not as good as they used to be. More than anything else, I'm determined to make sure my children are given everything they need to prepare themselves for whatever the world throws at them.”
Born: December 22, 1960
Lives: Skipton with his wife Carol and two children, Rebecca, 10 and Joe, 7.
Education: A levels at King Edward VII school in Lytham. He started a degree but says he did not finish it because it seemed pointless.
Career to date: Joined Clerical Medical as a trainee in 1979 and worked his way up to life inspector. Moved to Skipton in February 1988 as an adviser, becoming managing director in 1995.
Career ambitions: To see Skipton as one of the biggest financial services businesses in the UK.
Life ambitions: Centre on the home and his two kids. Wants to see them off into the world with the best possible chance for success.
Likes: Travelling abroad on holidays. Manchester United. Playing cricket with his village team (he is a decent batter and bowler). Getting the suit off and getting back to reality.
Dislikes: People with a lack of ambition and vision. He thinks it is easy to find reasons not to do things.
Drives: Lexus GS300 Sports.
Peers say: “He is passionate about what Skipton can achieve. Nothing excites him more than exploring future opportunities. He demonstrates 100 per cent commitment to his team and has built a great working culture at SFS.”