Jonathan Polin has been busy since he joined Ashcourt Rowan in 2011 as chief executive, and this week thewealthnet caught up with Mr Polin to find out how the firm is progressing.
Back in 2011, Mr Polin stated that Ashcourt Rowan was well positioned to become a leading firm in the UK wealth management market over the next three to five years. A bold statement, but it seems that Mr Polin is walking confidently towards his goal, having declared a “pretty good” financial year. While firm reported a pre-tax loss of £2 million for the year ended 31 March 2014, during the second half of the year it made a pre-tax profit of £0.5 million, compared with a loss of £1.2 million for the same period the previous year.
“Second half took off, and got us into a position where we wanted to be - we were seeing real cash and real profits. The year has been the culmination of the second phase of our development. The first phase being ‘fix it’, as the business was in a horrible state,” Mr Polin said.
The last few months also saw Ashcourt Rowan successfully completing the acquisitions of UK Wealth Management Limited and Generali Portfolio Management (UK) Limited, and Mr Polin is currently looking at other prospects, as there is a “sweet spot” in the sector for another 12 to 18 months. According to Mr Polin, the wealth management sector was a “cottage industry led sector” with few scale players.
“There definitely needs to be more scale players. The regulatory burden cost is increasing the whole time, so only those who have scale can actually afford to not only continue to operate, but - more importantly - to invest in technology, and the new ways of interacting with the clients that we all need to do. That drives consolidation, and there is a huge amount of activity going on. There are some real opportunities out there.”
Another way Ashcourt Rowan is growing its client base is by continuing to focus and expand services for the mass affluent sector (£100,000 up to £1 million in investable assets). The firm has a range of clients that go from £100 million to those who have £50,000 invested, but the vast majority come under the mass affluent bracket. Mr Polin stressed that it is still a growing sector of the market in general, which he is looking to tap into further, and that the real challenge for all firms is how to engage with the next generation of the mass affluent clients.
“Around sixty percent of our clients are over 65, which is about the same as most of our competitors, and the way that we interact with those clients is going to be very different to the way a younger person would want to interact with us.” Ashcourt Rowan is constantly developing its technology, whilst still maintaining emphasis on face to face time when clients need it – “it is absolutely essential to offer both”.
Another big “once in a lifetime” opportunity, which Mr Polin is aiming to make the most of, comes from the changes in pensions regulation giving people the choice of how they invest their pension, which will be a very significant boost to advice. “People will not want to make that decision based on something like a website, because they will have to live off the income for many years, and they want to look at the person giving them advice. Wealth and asset managers can now get access to assets that had been ring fenced from them in the past, so the multiples on those businesses are going to rise.”
Location wise, Ashcourt Rowan is perfectly positioned, its offices giving it the full coverage of England. The firm has recently closed down two offices and amalgamated them into a new one in Leeds. Mr Polin explained that one of the reasons behind the acquisition of UK Wealth Management in particular was because it had a north eastern base.
“We don’t have a large presence in Scotland yet, we have one office in St. Andrews, and in time we want to develop an office either in Glasgow or Edinburgh.”
Finally, Ashcourt Rowan has re-structured the business slightly following last week’s departure of Richard Sinclair, the firm’s former chief operating officer (see thewealthnet 22/07/2014). “Richard has been offered a big opportunity in his old sector, and he has our huge support, thanks and love,” Mr Polin commented.
Steve Haines, former non-executive director, has stepped down from the board to assume an executive role as head of the group’s governance and risk functions, whilst also having a wider management role within the company. “When I joined the business, Steve Haines came with me, and he gave a lot of time to the development of the business, and now he is doing what I’ve wanted him to do for a long time – coming to the business as a full time executive. As a result of these movements, we need to find a new non-executive director,” said Mr Polin.
Hugh Ward, chairman of the board, has been appointed as the new chairman of the audit committee, a position previously held by Mr Haines. This appointment will be on an interim basis until a new non-executive director is appointed. Close to finalising the changes, Mr Polin looks confidently into the financial year ahead.