Platform sends out message... clear as a Bell
ALTHOUGH he might not have the front of Peter Hargreaves, co-founder of FTSE 100-listed investment business Hargreaves Lansdown, Andy Bell is a dark horse who could well be on the verge of emulating the billionaire’s success.
Like Hargreaves, who began in business 37 years ago from the front room of a Bristol flat, Bell started his working life quietly – training to become an actuary. But for the past 23 years he has followed a similar journey to Hargreaves, realising that with the growth of the internet there was money to be made from enabling people to control their investments under one roof.
To begin with, it was pensions but quietly and surely Bell’s business AJ Bell broadened its online proposition – known in the trade as a platform.
Investors can now assemble their own portfolios through the wrapper of a pension, Isa or on a standalone basis. They can buy and sell funds, investment trusts and shares.
While AJ Bell is dwarfed by Hargreaves Lansdown – and probably always will be – the business is something of a disruptor. By competing on price, it has grabbed a three per cent share of the platform market. Customer numbers are heading towards the 200,000 mark, assets are around £42 billion and it makes money. Last week, chief executive Bell flew down from Manchester to confirm the next stage in the company’s development. Like Hargreaves and Stephen Lansdown did 11 years ago, AJ Bell is heading for the UK stock market. If all goes according to plan, it will float in December – January if there is a hiccup or two (a stock market correction).
Of course, the float will make yet more money for Andy Bell – who joked last Tuesday he already has more money than sense.
It should also make money for investors in some of Invesco Perpetual’s UK funds as the Henley-on-Thames business uses the float to sell down a slice of its stake in AJ Bell, realising handsome gains.
Yet, in the spirit of investor empowerment, AJ Bell has also decided that its customers should not be left out of the impending stock market party. Anyone who has an account with the platform when October 15 comes around will be eligible to apply for shares (minimum of £1,000). With shares there are no guarantees – and life as a listed company can be ferocious, especially when things go wrong (for example, an IT meltdown or a successful cyberattack by hackers).
But if it enjoys a slither of the success Hargreaves Lansdown – and its shareholders – have enjoyed since the company’s stock market listing in May 2007, early investors in AJ Bell plc could be making a shrewd long-term investment.
For the record, Hargreaves Lansdown shares were priced at £1.60 when the business came to market. On Friday, they finished above £22. TALKING of cyber-attacks and hackers, it really is a bit rich for credit reference agency Equifax to express disappointment at the £500,000 fine it has just received from UK regulators for failing to protect the personal data of 15 million Britons. A failure that late last year left customers unsure as to whether their key personal details – everything from dates of birth, telephone numbers and driving licence details – had ended up in the hands of fraudsters.
As a customer of this wretched organisation at the time of the data breach, I was left worried sick that I would either be targeted by cold-callers intent on stripping me of my pension – or have my bank account emptied.
To add insult to injury, I then had to endure the torture of signing up to its ‘protect’ service to see if my credit file was in order.
This involved giving one of its robotic employees – operating out of another Continent or planet – all of my key details (bar inside leg measurements).
Sufficient detail for the android to do what the hackers had attempted to do in the first place – if he had been so minded.
Last December, I said Equifax should be hit with a ‘thunderous’ fine. How disappointing then that it is just £500,000 (the maximum permitted).
After all, this is a company we entrusted with our personal details so that we could keep a regular eye on our credit record and whether anyone was impersonating us to take out credit in our name.
It has broken that trust, for good. Damn you Equifax.
AJ Bell has also decided that its customers should not be left out of a stock market party