Ian Mattioli, chief executive of Leicester-based wealth management service provider Mattioli Woods, runs a business that many advisers may feel they aspire to.
Setting up the business in 1991 with his colleague Bob Woods as a pensions consultant, he has turned it into a company that has a £140m market capitalisation, a healthy share price and assets under management of £4.6bn.
Part of this has been through organic growth – Mr Mattioli said the company adds 500 clients and £100m of assets a year – as well as through acquisitions. To date, the company has made 14 purchases, and it has its eyes on several more.
But perhaps the shrewdest move has been to build a business that can weather a variety of conditions. The company is gradually building up the employee benefits division to complement the established financial advice business.
Mr Mattioli said: “The reason why we’ve got an employee benefits business that sits with the wealth management business is because it’s a great blend.
“The employee benefits division has got 50,000 employees who use our employee benefits, and a good number of those could use our wealth management services. But in our wealth management division, some of our existing clients are now running businesses where they have employees, so we feel that we’ve got both elements creating something quite unique.
“That blend of wealth management and different things is important because in some market circumstances, if something is doing well, something is underperforming. We can support it and change it to get back.
“What we try to do with the business is build something that’s got longevity. There are some businesses that are growing the business to sell.”
Employee benefits currently takes up about 19 per cent of the company’s £29m revenues against 30 per cent wealth management and 36 per cent in pension consultancy and administration.
However, employee benefits is one of the areas where the company is looking for acquisitions. It recently raised £18.6m on the stock exchange, money which will be used to expand the company further.
“Some people have been selling these employee benefits businesses because they don’t know how to run the business. There are other things we would like – maybe a stockbroker.”
To many advisers, Mattioli Woods is known as a pensions provider, and this is how it started. Mr Mattioli met his business partner and chairman Bob Woods at Leicestershire-based pension provider Pointon York. Then an ambitious 26 year old, Mr Mattioli felt he was never going to get his aspirations met by the management, so he and Mr Woods set up the company.
He said: “What we set out do was give people a real understanding of the pensions they have built up. We did the historical stuff and then we advised what they should do. That enabled us to build an estate of small self-administered schemes, and those clients ultimately required other services from us.”
The company is now a well-known provider of Ssases and Sipps, and the typical client may be a wealthy person with on average £1m in assets, though more in London. Sometimes it might be a businessman who wants to buy his office or factory. However, the company is more than happy to take on clients worth less.
Mr Mattioli said: “Some say we only deal with people with £1m. The socialist in me says that’s too elitist. There was a time when they didn’t have £1m. That’s the type of client we’re trying to create in the business. If a client is suffering in their business, we all give them a lot of support, above what you would expect.”
He said that the closest thing to his business model was that run by St James’s Place. It has both a financial advice division and a product division. But Mr Mattioli said that this did not create conflicts of interest.
“We’re quite happy to tell a client not to do anything; we’re quite happy to tell them they’re doing the right thing. Our own products have to be best in class because otherwise we would prefer to use someone else’s.”
But despite the entrpreneurial beginnings, Mr Mattioli takes a very conservative line on capital adequacy. With the FCA anticipated to bring in new capital adequacy requirements for Sipp providers in 2016, the company already adopts a higher level of caution that ranks with that used by the banking sector.
The company employs Icap regulations – which takes a tougher assessment of the risk involved. As such, the company holds about £7m as a hedge against its liabilities. If it complied with FCA requirements, this figure would amount to about £3m.
He also takes a conservative line over those Sipp companies that allowed investors access to high-risk assets. He said: “People did not carry out the correct diligence at the right time. The Sipp providers quite often were chasing volume business.”
The most important thing Mr Mattioli has learned over the years is that it is important to invest the time in one’s staff.
“The most important thing is trust and training other people, and don’t ever stop mentoring. It’s very time-consuming and it’s quite tiring. You’re just about to do something that will take you five minutes, but will take you half an hour to explain it. But if you take that half an hour, the business can go forward.”
Melanie Tringham is features editor of Financial Adviser
1991-present
Chief executive, Mattioli Woods
1983-1991
Senior consultant, Pointon York
1980-1983
Specialist pensions administrator, Phoenix Assurance
