Frenkel Topping Group Plc Q&A: Year-end results & 5-year plan (LON:FEN)

Frenkel Topping Group

Frenkel Topping Group Plc (LON:FEN) Chief Executive Officer Richard Fraser caught up with DirectorsTalk for an exclusive interview to discuss their year end results and progress of their 5-year plan.


Q1: Richard, last year we saw significant investment across the business, can you just talk us through that?

A1: So, last year was definitely a year of two halves for us. The first half of the year was the investment we made into people, process and our back office technology platform and also into a big increase in our marketing and branding spend.

The people were mainly through the continuation of the graduate programme and the introduction of what we class as the client experience team who are responsible for onboarding clients and then maintain the relationships of clients once onboard. The graduate scheme work is going really well, we’ve got another 5 graduates to take on this year, we’ve had 250 applications for the graduate scheme which is fantastic.

I have to say that the people who we’ve got are driven, hardworking, very bright and we’ve already seen some successes there with 2 of the graduates really are 12 months ahead of schedule, they’ve become junior fee earners and one of them, Dale, has already won his first £1.5 million mandate so that investment into people has started to pay off.


Q2: This seems to have paid off in the second half of the year as well, what were the main drivers and which of your focus areas paid off best do you think?

A2: The main driver for us was the increase in the marketing spend, the rebranding of the different parts of the business and in the first half of the year, in Q1, we started a marketing campaign on our Expert Witness work.

The Expert Witness work is where we are act to experts in court in the large personal injury and clinical negligence claims, you only get an expert witness report if it’s a case of maximum severity so you’re looking at £500,000 up to £10/11 million in damages. We started that campaign in March and it was so successful that we absolutely had to stop it in the second half hence the reason why we’ve seen a 33% increase in our Expert Witness work.

The reason that is so important is that it is our pipeline for future AUM for the business and the second part of that is that drove through into last year, we had a record year for new assets under management that we put on. So, we put on £92 million in new mandates won throughout 2018 which is a record for us at Frenkel Topping Group and the Expert Witness is also our pipeline for new work for this year, next year and 2020 so it is a key driver.

We stopped, and the only reason we stopped was because of the capacity of doing the work, our Expert Witness team we’re in fact working overtime Saturday’s and Sunday’s to get the work done because we can’t fall down on service, we have to make sure that we have the reports ready for court.

So, what it’s given me is now I know what I need to do if we need to increase capacity again then we can just turn the tap on effectively with the marketing that we’ve done.

Just the follow on from that, the first quarter from our enquiries, up to the 30st March 2018, we had 400 new enquiries into the business, same period this year that has risen to 500 enquiries so that momentum is continuing through in Q1 of this year.


Q3: When we last spoke, we talked about your 5-year plan, how’s that going?

A3: So, Frenkel Topping Group have got a 5-year strategy of building the organic part of the business and building our M&A strategy, which is going really well, we’ve got some targets there which are starting to move forward.

We’ve got our pillars in there on the digitalisation of the business, that’s all starting to come through, we’re developing our own app.

We talked about wanting to stand for being known as a business that’s got transparency and honesty and to cut out financial abuse in the financial services sector. We’ve got a very big day in London on 9th May where we get 200 lawyers along to what we call our ‘Deputy Day’ and Paul Lewis from Money Box is chairing the day for us as he’s a big champion against financial abuse so we’re really pushing forward on that.

The graduate programme, the academy programme, has been a great success for us and I think we talked about last year about socially responsible investing, that’s becoming a bigger part of the investment world. The millennials are going to inherit something like $30 trillion in the next 15 years from the baby boomers and 70% of millennials want socially responsible investing strategies.

We’ve been running our socially responsible investing strategy for 2 years, it’s performing as well as any traditional asset allocation model and, in some cases, performing better and we will continue to develop that. You may or may not be aware of the United Nations 17 positive impact that they’ve got against negative impact solutions, that’s going to be part of legislation going forward and it’s got to be from a bigger and bigger part of the investment world.

We’re well ahead of the curve to deal with that and we believe in it fundamentally because the successful companies of the future that will invest our clients’ money in are going to the ones that have an eye to their environment, their social responsibility and their corporate governance.

Our overarch in that is just excellence in everything we do, we just want to be seen as a professional financial services company providing quality services and advice. We drive that excellence through every part of the business and we deliver that then de-facto what we will then drive is shareholder value and increase our earnings per share.

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