Firing lineOct 12 2022

Progeny boss: There's no substitute for hard work

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Progeny boss: There's no substitute for hard work

His business, which has been in its current format for six years, is based on the business model of bringing different professionals with varying expertise under one roof and the client pays an annual management charge and initial fixed fees for having access to them, alongside a range of other fixed fees. 

So for initial fees and 1 per cent AMC they will receive: a basic will, a tax return, lasting power of attorney and one conveyance a year, along with financial advice and wealth management. Other services comes with extra fixed fees.

This means that the client has tax advisers, financial advisers and solicitors all working for them. The advisers meet the client at the start, then thrash out the solution behind closed doors.

We can bring together other externals, and bring additional advice.

Moles says: "All of these people are trying to put themselves forward but the more we do these, the more they realise that it's collaborative and that gets the client to the right place."

His plan is based on the fact that onboarding clients is a very expensive process, and the general administration of contacting a solicitor and for them to open a file is where a lot of the cost happens – having everyone in-house already familiar with the client is what saves the firm money.

Most people only review their will once every few years, if they are lucky, Moles says, because of the cost of going to a solicitor.

But under his model, professional advisers review their will annually. "It doesn't cost a lot of money to review a will, as we've already got the full plan. 

"We not only set that up as a piece of work, we can bring together other externals, and bring additional advice. It is part of the ongoing programme of holistic planning – this is having financial planning, tax and law."

Backing the business

Moles launched Progeny in 2016 after having done an MBO of his financial planning business eight years earlier, just as the financial crisis was blowing up, using money borrowed from the bank.

After paying off the bank debt four years later, he turned to the services of family office LSG Holdings, which provided the initial funding of helping him to realise his ambition for turning the advice business into Progeny.

He says: "We could sit back like everyone else, or scale the business, or do something different. I took two years to write the business plan and come up with the funding and find the people to believe I wasn't crazy."

 

 

 

Once one comes, everyone comes; it was about getting the right people to join the team.

 

 

 

Moles adds: "The most important thing is that we control the journey; we don't let the investor control the business – as long as you're successful they will leave you alone, and it's good to have professional investors on board, it professionalises the way you run the business.

"They are investing all over other sectors, and you get much greater breadth of knowledge."

The family office currently holds 9 per cent of the equity of the business, and Moles has since turned to private equity for further assistance, so that professional investors now own 60 per cent of the company.

As a consequence, however, he has been able to buy firms to help him build his model – the latest being Balmoral Asset Management, the fourth purchase this year – so that now he has 150 advisers: 98 financial planners and students at his academy, and the rest are lawyers and accountants.

Not surprisingly, the lawyers were a reluctant lot when it came to believing in Moles' dream: "They are super cautious and are attached to a profession steeped in 350 years of history. We had to have a solid business plan and we had to put the right amount of capital in to prove we could last the journey.

"But once one comes, everyone comes; it was about getting the right people to join the team."

Ongoing advice

Progeny now has £7bn of assets under management and 7,000 clients – a strong position compared to the £100mn of AUM in 2016. No doubt in part due to his acquisitions, but it is also helped by appealing to a wealthier client. His average client has just over £750,000 of investable assets – people he considers need ongoing advice.

Moles says: "If you've got £75,000 in your Isa... you need ongoing advice. We choose to operate at the wealthier end of the market."

He has recently appointed a former M&A director of KPMG as his head of corporate development, and is on the look out for more acquisitions.

"We're not a consolidator. You have to be a chartered financial planning business with clients that need our services, and we can't buy businesses where [all the advisers] want to retire – that's someone else's game."

We do what we say we're going to do, we have a vision and we stick to it.

"If you look at our last acquisitions – The Fry Group and Balmoral Asset Management – that demonstrates that what we're doing is working and people will join us."

Clearly Moles has ambitions yet. He began his life in financial services at Skipton Building Society, starting out as the then equivalent of a paraplanner, before going on to a more customer-facing role. He joined Lawrence Scoffield from there, becoming managing director, from where he led the MBO.

Clearly he has experience of doing deals, and building businesses – what has he learnt about making it happen?

"We do what we say we're going to do, we have a vision and we stick to it. I'm extremely passionate about that vision and we deliver it.

"The rest of it: there's no substitute for hard work."

Melanie Tringham is features editor of FTAdviser