Starting up a new advisory business at the height of the financial crisis would be considered by many to be a baptism of fire.
But for Fairstone Group chief executive Lee Hartley, the erratic and uncertain financial backdrop presented an opportunity to prove the strength of his technology-centred business proposition.
He said:“Two thousand and eight and 2009 were the best of times and the worst of times. Looking back now, you could not have asked for a better environment to have to prove your concept because the crisis forced you to be even more efficient. But it didn’t feel like that at the time.”
Having run Liveroom, his own e-commerce and digital marketing business, which boasted such big-name corporate clients as Axa and Zurich, Mr Hartley identified a gap in efficiency in the advisory industry which could be plugged by the use of technology with solid business and marketing acumen.
He said: “The core advice service was generating money, but financial advisers have traditionally struggled with clunky admin, compliance reports and sourcing new customers.”
Fairstone operates on a core technology platform with integrated proprietary marketing which generates new customers and provides back office tools for advisers.
The group, founded by Mr Hartley and Dennis Reed, the firm’s national development director, was established as Moneygate in 2008 in Newcastle upon Tyne with financial backing from private equity firm Committed Capital and venture capital firm Northstar Ventures.
The group now has offices in locations nationwide including London and Edinburgh, and employs around 230 financial advisers. It was awarded the corporate chartered status by the CII in July.
According to Mr Hartley, Fairstone has a current run rate revenue of £26m, meaning that this is the figure the group would achieve if it were to perform at the same level as the previous year.
In addition Fairstone has funds under advice of £5bn, funds under management of £2bn, and more than 30,000 active clients.
In April this year the group completed its rebrand from Moneygate in a move to create a single identity across the group.
Mr Hartley said: “We wanted to build a really strong consumer brand, and the general consensus was that the ‘gate’ bit does not have positive connotations. When people hear ‘gate’ they think of Watergate.”
He added: “We are planning on spending a lot of money on marketing the brand, so it was a really valuable thing to get the brand identity right.”
Mergers have been a key facet in the group’s growth, and will remain an integral part of its future growth strategy, according to Mr Hartley.
With 34 businesses having been brought into the business since 2012, the group seeks to add a further 10 to 12 a year.