CompaniesNov 5 2014

Firing Line: John Spiers

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He was chief executive until 2007, when the company was taken over by private equity group 3i, then came back in 2008 to help the firm out, and left again in 2010.

He was until recently a non-executive director, but the memory of his executive departure – both times – is still fresh.

He said: “It was very, very upsetting, not least in the way in which it was done. I was told that my services were no longer required. I’ve been associated with the firm since 1986 – I have very strong links with the staff.”

Now, launching his new business, EQ Investors – the EQ stands for emotional quotient – he has had nothing to do with Bestinvest since its merger with Tilney, to form Tilney Bestinvest. Of this merger he will only say: “When you put together two businesses of broadly equal size and different cultures it would be surprising if there weren’t some challenges for management.”

This latest deal was backed by private equity as well, and experience of this kind of backer has left a bad taste for Mr Spiers in terms of where the industry is going, as more and more firms get bought up.

He said: “These external shareholders are motivated by reasonably short-term financial gain. The people who are delivering the advice and services to the clients are no longer in control of the strategy of the firms.

“That can lead to significant conflicts of interest. It means the shareholders are focused on maximising short-term growth, and it makes it very difficult to make a long-term investment and keep up service standards to clients.

“If you look after 100 clients, a private equity firm will say, ‘Why don’t you look after 150 clients?’ After a while, the service standards slip, and it takes a long time to play out. But after a while the client realises they’re not getting the services that they need.

He added: “I think it’s widespread and growing.”

Mr Spiers has decided to strike out again with the new business, which he has bought with his own money from Truestone Asset Management.

He has created EQ Wealth and EQ Direct out of the wealth management business of Truestone, which wanted to focus on the product side of the company. The idea is that EQ will be run on an ethical basis, without the pressures of external shareholders, which is owned by the staff.

Mr Spiers said: “We don’t have external shareholders, and never will have; and we are not going to sell the business – we don’t have a requirement to sell the business at some point in the future. It’s about thinking long-term.”

What this means, said Mr Spiers, is that the company can take all sorts of decisions about its future direction, if it is in the best interests of the client, as long as it does not adversely affect the running of the business.

He said: “We don’t have to write a business plan to show return on capital is more than 20 per cent to get it past the board. We can show something that’s going to improve the services to clients. If it turns out it was a good financial investment for us, that’s great.”

EQ Wealth will be the face-to-face financial planning part of the business, while EQ Direct, which launches next year, will offer a lower-cost service for people with less to invest.

Mr Spiers said: “What we don’t have is, where you’ve got someone who wants to put £1,000 a month into an Isa and can’t justify face-to-face advice, we don’t have a service for them - there’s a gap. Some customers are happy to use the phone or online.

“EQ Direct will definitely make it pay for itself.”

While the company is being promoted as an ethical business, there are still challenges for those who have even less money to invest or who are financially naïve.

Mr Spiers is concerned about what will happen to those coming up to retirement next year, faced for the first time with a decision over their pension.

He said: “I think a 30-minute consultation is definitely not enough. These are complex decisions. To think that will be enough for most people to have a clear idea of what they should be doing is fanciful.

“We have to make sure people are as well-informed as possible about all the options. That would be good if it was provided by a government agency. But when you look at the history of these things, they produce gobbledegook that’s almost impenetrable to everybody.”

Mr Spiers has been in the industry for 41 years, and despite the trauma of his departure from the company he founded, he still enjoys the business.

He said: “I love the wealth management industry; I’ve been a professional investor all my life. I love the different ways you can interact with your clients and provide good services to them.

“It’s good to be back in charge.”

Melanie Tringham is features editor of Financial Adviser

John Spiers’ career ladder

2014

EQ Investors, chief executive

2008-present

Spiers Foundation (registered charity), chairman

2010-2014

Bestinvest Group,

non-executive director

2008-2010

Bestinvest Group,

chief executive

1986-2007

Bestinvest Group,

founder and chief executive

1984-1986

Greenwell Montagu, corporate finance, head of venture funding

1983-1984

Granville & Co,

investment analyst

1981-1983

W Greenwell & Co,

investment analyst

1979-1981

WI Carr, investment analyst

1975-1979

Galloway Pearson,

investment analyst