"If you have an investment that has a long time horizon, and you need to cash in that investment in two years time, you might need that investment short term, but you're stuck with it long-term.
"It is around that area, where people invested into something and didn't think through the liquidity implication." As part of this reasoning, Mr McVitie does not see the benefit of structured products: "They tend to be expensive, and the time-frame of the investment and the client's time-frame can get quite out of kilter."
LEBC came about when Mr McVitie was regional director at Hogg Robinson Financial Services, and the company was being sold to then-named Towry Law. He did not agree with the style of business that Towry was then adopting, claiming it was a "product-based business". Mr McVitie had the idea of an 'advice first' business, that is, "first and foremost the aim was to give people advice."
"Customers need access to suitable products. Who are the advisers loyal to? To the customer or the provider? From the outset we were always on the side of the customer." So the plan, from the outset was that clients could have a choice of paying by commission or fee, before depolarisation in 2006.
The idea with LEBC was to create a nationwide company with offices in Leeds, Edinburgh, Birmingham and Canterbury – hence the name of the business. The Canterbury candidates decided not to commit, but the company started with eight individuals and then quickly grew to 13. Now the business has 90 advisers.
Misys, the former owners of Sesame, took a stake in the early days, but then pulled out and in 2007 BP Marsh and Partners bought 22 per cent of the company for £2.2m. It now has a 34 per cent stake.
Over the years, Mr McVitie has learned a few principles that keep the business going, most of all caution and experience. He said: “there’s a lot of people with a lot of experience, and that teaches you what to look out for.”
Mr McVitie likes to work with people who have been through the 1974 crash, and he has worked through the 1987 crash. He said: "If you've been through all of these different things, you learn to be wary for the clients' sake, and that's your job."
Melanie Tringham is features editor of Financial Adviser
2000 – Founded LEBC
1993-2000 – Hogg Robinson, regional director
1992-1993 – Bain Clarkson, managing director Scotland (taken over by Hogg Robinson)