‘Most discretionary fund managers are charging ridiculously high fees to do an insubstantial job,’ says Matthew Pescott Frost, managing director of Matthew Douglas.
His comment coincides with the Suffolk-based firm’s push towards gaining discretionary permissions. ‘We can do the job cheaper and better,’ he adds.
The move into discretionary permissions is indicative of how Pescott Frost is evolving the business. ‘Our aim has always been to give central London-quality advice for a more attractive price. I believe we have been successful with this over the years.’
Matthew Douglas’ services are delivered to high-net-worth clients. It has worked primarily with this group by following a simple premise. ‘Rich people have rich friends,’ explains Pescott Frost. ‘Most of our new business comes from client referrals, meaning we now spend little time on our external marketing.’
The firm recently decided to scrap marketing efforts. ‘We have realised it’s important to make the hard calls,’ says Pescott Frost.
He also explains his decision to discontinue mortgage work. Matthew Douglas was spending around 40% of its time pursuing mortgage business, when in fact it was making little profit.
‘After it’s done, you realise how much time is now freed up,’ he says. ‘Then it’s the exciting part where you can develop different aspects of the business and hopefully increase profitability.’
The art of delegation
As Matthew Douglas passes the 15-year mark, Pescott Frost shares his biggest learning experience: the art of delegation. ‘When running a business, it’s key to accept you can’t do every role. You have to appreciate other people can do certain jobs better. You have to give people the autonomy and freedom to do the role how they know best.’
Pursuing autonomy has improved the performance of employees throughout the business, says Pescott Frost, including those who did not initially perform to expectations. Rather than giving up on an underperforming employee, he explains the firm tries to place an employee in a different role in which they would be better suited.
‘We have had great success with these employees. We put faith in our staff and they return the favour. We also promote internal praise. If someone is doing well, we want everyone to know about it,’ he says. ‘We just smashed our target so the whole team are getting treated. The hope and ongoing achievement so far is that everyone is a team player and feels good about what they are working towards. This positivity will be reflected in meetings with the clients as well, which is always helpful.’
Pescott Frost is always determined to bring more of the right kind of clients in. ‘Hopefully we will never shut our doors. We always want more business, as long as the client is right for us and vice versa, we can have great success with them.’
With more than £200 million assets under advice and 500 clients, Pescott Frost reflects how far he has come since starting Matthew Douglas as a 34-year-old ‘with no managerial experience’.
Like many in the advice profession, Pescott Frost admits to being a great salesman, but says he needed more skills to be a successful manager. Being critical and self-reflecting has been key for Pescott Frost moving to the next level as a business manager.
His advice to smaller firms is clear: have a coherent plan. ‘Firms need to have a plan that can be constantly reviewed and potentially changed. All aspects of the business should be broken down and, as managers, we have to be honest with ourselves about what is actually achievable.’
Pescott Frost appreciates the next stage is succession planning. ‘I’m getting greyer and balder. The clients are asking questions about the future so we need to ensure we have a suitable plan,’ he says. He explains the firm is developing a 10-year plan that will ultimately result in the firm looking for a management buyout.
Pescott Frost is keen to explore the option of employee ownership. He says he is looking closely at building the firm for the next generation and, as always, discovering how he can get the best out of his employees and the company as a whole.