Setting up your own business is fraught with risks and fears, and for many, there is none greater than the fear of failure. But for Lee Hartley, he had seen first-hand from an early age that failing and starting again was nothing to be scared of.
“My dad had various small businesses,” he remembers. “He managed rock bands, had a sandwich round, ran a motorcycle shop, nothing really worked as well as he’d hoped but he kept going. And that showed me even then that you shouldn’t be afraid to try. That whole mystique of what would happen if things didn’t work out was taken away. It wasn’t something big and scary, so probably from then I realised that setting up on my own was more than achievable.”
Based on the phenomenal success so far of Fairstone Group, the business Lee co-founded in 2008, it’s probably a fair bet to say he’s pleased he did so.
The venture is now the UK’s largest chartered financial planning firm, with a high growth strategy fuelled both by acquisition and strong organic growth. Attracting the attention – and indeed the capital – of a range of investors and private equity houses from its inception, Fairstone operates across the whole UK, managing over £7 billion in client assets from its offices in the City of London, Bristol, and its headquarters in Boldon, Tyne and Wear.
But back in 2008, when Fairstone was set up to offer a refreshing new approach to financial advice, backed up by a bespoke IT infrastructure, the prospect of failure was something Lee thought he may have to confront. Only a few months after launching came the Lehman Bros crash, sparking crisis in the financial sector and marking the onset of recession.
“I can look back with rose-tinted glasses now and say it forced us to be agile, it encouraged us to remain lean, but truthfully it was horrific. When you put together a team of people at the start of the year, then only a few months later can no longer afford to keep half of those staff, that was a very difficult time,” says Lee, who sold his first highly successful business, an e-commerce venture, in 2006.
“For those three years, 2008 to 2011, we heavily scaled back our growth plans as it was obvious we weren’t going to be doubling our turnover each year, we were running at a million miles an hour just to stand still. I suppose you could say it really instilled discipline into our business, and we are probably feeling the benefit of that now.”
From such a tough start, Fairstone has more than weathered the storm, becoming one of the leading and most respected names in financial services.
Its reputation for professional, transparent advice, coupled with its ambitious business plan – which saw it add six new businesses to the group last year, and plans to acquire a further 10 throughout 2017 – has made it a new and exciting big player on the scene.
“We do not make acquisitions for the sake of it – we buy good businesses and make them even better. The firms we bring into the group have experienced organic growth of over 15 percent year on year, so we genuinely help them to achieve the potential we see in them,” says Lee.
“The growth of the business is something I am proud of, of course, but the biggest achievement for me personally so far with Fairstone is when in May last year we completed a new £25 million private equity round of investment and were able to cash out some of our early-stage shareholders. They got a good return on their capital, which was nice for us to be able to say thank you for their support in the early years. And to secure a new lead investor of that stature too, that will help us enormously in being able to achieve our potential for the next five to ten years.”
Having been based in the North East since its inception, South Shields-born Lee is keen to reaffirm his commitment to the region, and unlike many, has no desire to uproot the business for the sake of having an HQ in London.
“We are a national business based in the North East. We have a large office in the City, only half a mile from the Bank of England, where 75 people are based but we have the capacity to add another 40 or 50, so that is a significant presence. Our senior management team is here in the North East, this is our hub of activity and it’s a great place to run a business,” says Lee, a Northumbria University graduate.
“We have been received really well within the financial services sector. It’s almost that, because our head office isn’t in London, we come across as more trustworthy in that we haven’t been sucked into the way the City operates. You are seen as less abrasive, more honest and straightforward, and they are definitely values that we want to reinforce across the business.”
As one of the key figures in the financial services market, Lee – who counts golf, boxing and being a ‘Soccer Mom’ to his triathlete wife as preferred ways to spend his spare time – has learned many lessons over the years, but admits it is his early experiences which have probably shaped his approach the most.
“When I was at university, I spent two and a half years putting together a business plan, I thought it was really strategic, a work of art. Only when I launched my first business did I realise it was a load of rubbish. I’ll never forget the stark realisation that you may know how to do something that is potentially very valuable, but unless you know how to reach your target market and know how to communicate the benefits you can bring, it’s worthless,” he says.
“That was another harsh lesson, but one I’m pleased to have learned early in my career. The things I took from my first experiences in business have been invaluable as I have gone on.”