In 1981 two bored but ambitious accountants started a British investment business from a spare room. Today they are billionaires.
If we were living in America someone would probably have made a Hollywood movie about their humble accountancy roots to fabulous riches story; but sadly we’re not.
Today the founders of Hargreaves Lansdown both live relatively quietly in a very unassuming British sort of way, trying not to make the headlines too much. Stephen Lansdown lives quietly in Guernsey and his business partner, the rather more outspoken Peter Hargreaves, in his comfortable home looking after his garden and business interests.
They have been in the news this week after Stephen Lansdown cashed in just over a £100m of his remaining stake in the business to fund refurbishment of his hotel in Guernsey and pay for some development work on a sports stadium he owns in Bristol, the home of Hargreaves Lansdown.
Peter Hargreaves sold a £550m chunk of his investment earlier this year and both still retain sizeable holdings in HL. In line with sensible Financial Planning they have been winding down their positions in HL over the past few years, just as they should do. Together the two have sold nearly £1bn in shares over the past few years.
The reason for mentioning all this is that I have always had the feeling that the Financial Planning profession has never quite seen either of them as “one of us”, nor even as people to admire.
Some years ago we ran a magazine cover feature on the two when the company first listed on the Stock Exchange with a valuation of over £1m. It attracted some sniffy comments from Financial Planners then who said they had nothing to learn from HL. I begged to differ at the time and do so now.
To be fair neither Mr Lansdown or Mr Hargreaves would claim to be Financial Planners but HL has always had a strong Financial Planning arm employing many Certified and Chartered Financial Planners. Yet because this is only a relatively small part of what HL does, which is primarily provide investment platform services to over 1m people, many planners have dismissed them as a one-off or just mass market fund floggers.
This is a shame because I believe many planners would have much to learn from these outstanding entrepreneurs who turned an investment idea into a multi-million pound business which continues to grow. It’s a model others should aspire too, not dismiss.
I have rarely seen either of them invited to speak at conferences or events yet if I was a planner I would want to know how they did it and what makes HL tick.
Few planners get into the profession because they want to run a small business. Most I suspect want to run scalable, growing businesses. HL is not a Financial Planing model but what it has achieved could be replicated by Financial Planners.
The first Financial Planning giant may not be the same as HL but HL has shown that small financial firms can become very big ones with hard work and entrepreneurial spirit.
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Kevin O’Donnell is editor of Financial Planning Today and a financial journalist with 30 years experience. This topical comment on the Financial Planning news appears most weeks. Follow @FPT_Kevin