can be the biggest corporate intermediary in the market.
John Greenwood asks him how he intends to get there
Opinionated, outspoken and controversial. These are words that are often used to describe Andrew Fisher. Only time will tell whether visionary, mould-breaking and all-conquering will become more suitable adjectives to attach to the chief executive of Towry Law.
Fisher not only has a plan to revolutionise the entire financial advice arena, but has also gone on record as having an ambition to make Towry Law the biggest financial advisory firm in the UK. More interestingly for the corporate advisory sector, his ambitions for domination do not stop at the wealth management territory for which Towry Law has traditionally been known. On top of this, he wants the whole project to be achieved on the basis of his company’s core values – integrity, quality of advice, a strong emphasis on training and a zealous approach to fees over commission.
So on what timescale is Fisher predicting this dream will become a reality. On the wealth management side, he thinks recent financial turmoil may have made his task somewhat easier. “The way the private banks have been going lately we could get there in 18 months,” he quips. “But in reality I think a five to 10 year timescale is likely.” And within a decade he even sees his firm knocking Mercers and Watson Wyatt off the top spot in the employer space. “We do see ourselves being as big as the big four in the employee benefits sector, because we have got a more innovative approach than they have. Through our DC pensions proposition we can offer corporate clients a better solution than is currently on offer,” says Fisher.
Big talk, you might think, for a firm that seven years ago posted a £77m loss after the disastrous purchase of Advizas and its previously unknown mis-selling liabilities. But that was all pre-Fisher, and since he reversed JS&P into Towry Law at the end of 2005 the firm’s growth has been rapid. Its results for 2007 showed an 88 per cent increase in discretionary funds under management, a 45 per cent increase in earnings to £9m and a 38 per cent increase in recurring income to £28m.
2007 saw five acquisitions, including Baker Tilly Financial Services and the UK activities of MLP Private Finance, and a 37 per cent increase in staff to over 660.
So far 2008 has seen no acquisitions but Fisher is still predicting an increase in profits and assets under management, despite what has been by any measure a disastrous year for financial services generally.
“We are seeing £70m to £80m of new money coming into the business every month,” says Fisher. “Our assets under management will be up 20 to 30 per cent by the end of the year, despite the fall in markets, and our revenue will be up 15 to 20 per cent overall. We expect our profits to be on a par with last year’s, but then we have invested hugely in our infrastructure.”
Fisher is still in the market for more acquisitions, CV ANDREW FISHER and says large IFAs with corporate businesses in them will be targets in the future. He adds that the war chest that Palamon Capital Partners – the company’s private equity backers – have earmarked for these acquisitions is unaffected by the market downturn, although he won’t say how much is in the coffers.
Towry’s approach to acquisitions may sound contradictory at first – paying money for firms to get its hands on their client base only to then politely ask some of those clients to leave. But Fisher is adamant that this process of culling client bases and streamlining processes is the way to increase profits. On the private client side it has got rid of all customers with investable assets of less than £100,000, and it has taken a similar value-driven approach to its corporate book. Likewise, the switch from commission to fees can seem poor business sense at first glance, but Fisher says it is all part of the plan to increase the value given to the client and so improve long term profitability in a sustainable way.
“When we take over a client from a commissionbased organisation and we have been taking £120,000 off them for a group scheme, we have been able to save the client around £40,000, and in addition have reduced our take to £60,000. We always reduce the amount of income we generate when we take clients from commission to fees, but our cost base is lower,” say Fisher. “We operate in a more efficient way and we do not spend money getting new clients.
“The same applies to the private client side. Our revenue falls from commission of 9 per cent to 1 per cent but our profitability goes up. Our advisers are not spending their time prospecting so they can increase their revenues two- or threefold,” he adds. Fisher is critical of many of the players in the corporate IFA space, who he accuses of churning. “We think our corporate proposition is strong because noone out there is offering a service on behalf of the business they are advising. All our competitors are churning pensions and generating commissions,” says Fisher of those advisers operating in his target market, which he identifies as those small and medium sized employers with up to 1,000 members of staff. This sort of talk will not endear him to the many commission-based advisers who believe they do strive to give their clients the best possible solution, with workplace pensions as sophisticated as anything offered by the fee-based side of the business. But Fisher is not the sort of person to worry about ruffling feathers. Rather he appears comfortable with controversy, which only serves as a differentiator in the market place.
He says he has no regrets about pulling Towry Law out of the Association of IFAs, arguing the trade body’s stance on the Retail Distribution Review is so far from the approach that his firm is following that it would not be right to stay in.
His zeal for bringing integrity to the world of financial advice knows few bounds. “The fact is that we can completely revolutionise an industry. The whole of Towry Law can make a contribution to UK plc. We are revolutionary in terms of our approach to fees and professional qualifications,” he says.
This may sound like taking an almost missionary approach to spreading the Gospel of independent financial advice, and if there is a clue to why Fisher is quite so forthright in preaching the virtues of doing it well, it may be found in his upbringing.
His father worked for Pan Am, a job that saw Fisher living in eight different countries during his upbringing. But it was when the airline went down, leaving his father’s retirement plans in tatters, that the seeds of understanding of the importance of financial planning were sown in the mind of Fisher.
“When Pan Am went bust it left Dad at retirement with no retirement because Pan Am had spent it all,” says Fisher. “This brought it home to me that people really do need good financial planning. I have seen lots of widows, divorcees and orphans left high and dry because of poor planning, and that is appalling.”
He talks about making a difference to people’s lives through raising standards with real conviction, something that he has transmitted through to his staff. This approach to spreading belief in core values through the staff seems to have worked, earning the firm a place in the Sunday Times 100 Best Companies to Work For list this year. He is proud of the fact that his firm will have taken 880 professional qualifications across 660 staff by the end of the year.
Some may consider Fisher’s outspoken views as self-serving, others will argue it is hard to criticise a drive for higher standards, but whatever you think of what he is doing at Towry Law, his results so far speak volumes. One way or another, other firms will have to sit up and take notice.