Sometimes that can be a sign of foolhardiness but, in this case, it struck a chord with me. I also had a sense of déjà vu with Adam. He was in a very similar situation to the one in which Stephen had been when we first set up the business many years before. He had a young wife who was pregnant and expecting their first child. What Adam wanted to do was to set up a venture under our banner and persuade us to finance it. We had no idea what he could do but he had some ideas of his own. Negotiations were quite tortuous because I don’t think he had dealt with such a straightforward firm as ours before – something we have found more than once with new employees. Eventually, we put together an agreement for a joint venture company. The venture we agreed on, selling pensions through the post, was a daring one for anyone with knowledge of our industry. To explain why, you have to appreciate that Hargreaves Lansdown’s main business had always been direct marketing. We conducted most of our business through the post and did this by sending out investment suggestions through our newsletters. Sending out an investment proposition through the post is an expensive process. Some of our mailings have cost as much as half a million pounds. With mailings of that size, you have to be absolutely certain that everyone who receives it is a potential respondent. When I give lectures on marketing financial products, I usually ask everyone in the audience whether they have ever tried mailing a financial product to their clients. When I ask for a show of hands, invariably every person in the audience raises their hand. I then say, “If it was unsuccessful, keep your hands up.” In general most of the hands remain up. I would then say, “Put your hand down if what you mailed was a pension product.” Every single hand usually drops.

As the pensions market has long been one of the most lucrative markets in the investment industry, it would seem obvious to try to sell pensions through the post. Life companies frequently try to persuade brokers who deal with them to mail pensions. The reason pension mailings have traditionally been unsuccessful is a simple question of mathematics. Most brokers’ investment clients are already retired and any broker worth his salt will have already sold a pension to anyone who is eligible, while most of the clients who are still working will already be in pensionable employment. With a typical investment mailing, a product of universal interest might produce a 2% to 3% response. But as pensions will only be of interest to at most 10% of recipients, you don’t need to be a brilliant mathematician to work out that 2% of 10% is bound to be a damp squib. “What do we never try to sell through the post?” I ask the audience at regular intervals throughout my lectures. They reply by shouting “Pensions!”

The joint venture with my new young tiger was therefore a bold attempt to take on the apparent lessons of experience. I didn’t let Adam go into the matter entirely blindfolded. Having explained why pensions were difficult to sell through the post, I was able to say that we did have a significant advantage in the form of our existing mailing list, which by then was approaching a million names. The plan we agreed on was to ask all the clients we mailed regularly whether pensions were of interest to them. What we were able to create was a sub list of all our clients who weren’t retired, who weren’t in occupational pension schemes and who had pensionable earnings. To give Adam some comfort, bearing in mind his family status, I told him that we would finance the business for two years at a loss. What I didn’t tell him was that I would only run it for two years at a loss if I thought it would eventually become profitable. If it hadn’t shown potential, I would have suggested something else to him. This is one area where I think many large companies go wrong. They start a new venture and say, “We shall give it two years.” They then do give it two years even though it becomes quite apparent after the first six months that it will never make a profit.

Just as I expected, Adam went after his new venture with a vengeance. He was given every assistance by our marketing department because everyone wanted him to succeed. Within six months, Hargreaves Lansdown Pensions Direct, the name we gave his division, had become profitable. We were also helped by a lucky break from a most unlikely source when the Government introduced a new type of pension arrangement known as a stakeholder pension. It allowed any citizen of the United Kingdom under the age of 75 to place at least £2808 into a pension and add back basic rate tax resulting in a £3600 investment. People could claim back the tax even if they didn't pay tax. What this meant was that suddenly everyone on our mailing list, except those over the age of 75, could buy a pension and claim the tax relief. It was an absolute bonanza and one that no other broker in the country was either in a position to capitalise on or seemed to understand. The stakeholder pension was fantastic for our clients.

Those over the age of 55 had another option. If they wanted they could take out the stakeholder pension for £2,808, have it grossed up to £3600 by the Government and start taking a benefit the very next day. In other words, they would get a tax free sum equivalent to 25% of their fund (a cheque for £900) through the post and, in addition, could immediately obtain a pension for life. The net cost was £1908, equivalent to their £2808 contribution less the £900 cheque they immediately received back. The income on this sum would then be in excess of 10% per annum. Yet no other broker in the land seemed interested in promoting this amazing deal. I suspect as a firm that we must have written the vast majority of all stakeholder pensions at that time. We had the market to ourselves for approximately three years. What is more, this all happened in a period when, because of the technology stock bubble debacle and the subsequent depressed stock market in the early part of the decade, our other businesses were not performing as well as they had.

One of Adam's strengths was that he knows how to recruit well. Indeed, I am ashamed to admit that he has always taken greater care in his recruitment than anyone else in the firm. He is quite prepared to recruit people who he thought might be better than himself. This is a difficult thing for most people to do because they fear that the person they have recruited might steal their job. Alex Davies, one of the young men that Adam recruited during this period, has since effectively taken over Adam’s old job and is now running Pensions Direct. Adam himself had no shortage of good ideas. And it was not long before he came to us with an idea for another new venture which, just like my idea years before of moving to a deep discount model, was not universally well received. He felt sure that we could compete in the group pensions market, even though it was not a business where we had any experience. I certainly didn’t understand the business very well and I doubt any of my co-directors did but Adam was so enthusiastic and so excited about it that we reluctantly said, “As you have got Alex running your Pensions Direct business, I suppose it wouldn’t do any harm to let you have another chance at starting a new business in corporate pensions.”

Group pensions turned out to be a whole new ballgame. The lead time between finding someone who was interested in a corporate pension arrangement and their agreeing to do business was very long. We recruited someone who showed us the way. For the first large case that he “pitched for”, he turned up at the offices of the company half an hour early, as he always does, to make sure that he couldn’t possibly be late. When he presented the potential client with our proposed pension arrangements, he produced a complete pack of tailor-made documentation enclosed in a folder printed in the company’s livery. It included application forms, details of the scheme and a fact-sheet, all of them printed with the company logo on top. The company was amazed to see so much documentation laid it out in front of them. “We are only checking to see whether we might use you,” the finance director said. “You seem to assume that we have already given you the job.”

Our consultant had his answer ready, “I know exactly what the situation is, but I thought you would like to see what you will get from us if you were to proceed. There is absolutely no obligation. I know you have not even decided whether or not you are going to change your pension arrangements. But don’t you think that anyone who is going to be in charge of such an important part of your company and your employees’ future should be able to demonstrate to you that that they will do everything you want in a highly professional manner?” This was game, set and match to Hargreaves Lansdown. And it taught the rest of us how important it was to be utterly professional in the important sphere of advice.

At the same time as we were putting together our corporate pensions division, Adam was taking an increasing interest in our private client advice division which I eventually suggested we rename Financial Practitioners. This division had in the past been purely a service for clients who wanted advice. We had already developed a multi-manager proposition and the new idea was that there would be separate advisers who would promote our Portfolio Management Service. This was a crazy situation because it meant we had two divisions competing with each other. Adam was able to pull everything together and eventually created an advice model that fitted perfectly with our business plan. As with our funds service, it was based on investors having to pay no initial commission. Instead, the clients pay a fee. Initially the adviser could choose to rebate some of this fee, but we have since set the fee in stone.

More important than the initial fee was the fact that we built in an annual management charge to be funded partly by the investment groups and partly by the fee that we earned for running the portfolios. We could then share a small portion of this annual management charge with our advisers. What it meant was that for the first time our advisers had a vested interest in looking after their clients. If clients complained, and we discovered after investigation that the adviser had not done what he was paid for, which was “to service the client to death”, he would lose his servicing fee. Our regulator loved this new arrangement, which introduced a badly needed element of accountability into what until then had been an all too one-sided relationship between client and broker!

We were also surprised when a rival broker, who had served on a committee of Equitable’s disgruntled policyholders, managed to obtain a list of its policyholders. He got into serious trouble for using this list to further his own business. Naturally, we wondered whether we would be able to obtain the same list. We made a speculative request for it and, to our surprise, the Equitable agreed. I think it had to be made available because it was a public document. We were duly informed that a box of listing paper weighing 25 kilos was waiting in Brighton for us to collect. Although we had cheekily asked for the list in electronic form, all we got was a printed list. We frantically researched how best to get the list in a format that we could use. Of all unlikely places, the Philippines turned out to have the best combination of quality and price. When I rang one of the freight companies to discuss getting the list out to the Philippines, they suggested picking up the box from Brighton, taking it to an airport and flying it out to Manila where it could be delivered to the firm which would key the names into an electronic format. I had no idea how much all that would cost. Had he suggested £1000, I wouldn’t have blinked. When I asked the question “How much?”, the surprising answer was £60. It made me realise how badly I did not want to be in the airfreight business! Although the cost of keying in the data was another invoice, for a tiny outlay we gained access to the Equitable list and as thousands of people were desperate for independent advice on what they should do with their Equitable policies, we happily provided it to anyone who requested it.

On our part, we suddenly received for the first time an income from investments that in some cases we had sold up to 20 years before and on which we had earned nothing since that initial sale. Another advantage was that we could also earn, for the first time, an income on investments that clients had bought through another intermediary. We received a share of the annual management charge paid by the fund provider – the beauty of it being that, while we gained additional profit, the clients were no worse off than they had been before. Indeed, the clients were actually better off because they also benefited from loyalty bonuses on funds they had bought many years before.

Taking all these new initiatives together, it meant that while most of the industry was floundering at the beginning of the 21st century because the stock market was performing so badly, we were firing on all cylinders. Our transfer business was bringing in more funds than the new business we had obtained even in our best years in the past. Our stakeholder pensions captured the public’s imagination. Investors in Equitable came over to us in droves. We established a new business in funds management and our stockbroking division was established as the number one distributor of new issues aimed at private investors. We also had a successful corporate pensions business which brought in new investment clients as they retired and sought advice. We were providing investments with reduced charges, giving clients a service that they could only have dreamed of before that time and at the same time producing the best research. Not surprisingly, this happy combination of advantages helped make us the most profitable company in the sector.

It wasn’t enough. Adam and his young recruit Alex Davies wanted us to go down the tortuous road of being able to offer pension solutions to clients directly from our Vantage platform. Legislation had been changing and the product we fixed on was something that Stephen had previously suggested we look at. This was the SIPP, or Self Invested Personal Pension. Until that time, SIPPs had always been expensive products with high charges. They were something that Chartered Accountants set up for their wealthiest clients. The reason for the SIPP’s success was that, while it was merely a tax shelter, the client could invest within his SIPP exactly as he wanted. He was no longer confined to the range of funds, many of them poor performers, that was typically on offer in pension plans run by life companies.

People who placed their money in a SIPP could choose all the investments that we were now offering directly through ISAs and PEPs. We didn’t need to make any initial charge and we could earn our living exactly the same way as we did from selling our other investments which was through renewal commission. Of course, SIPPs were very new to us but we did have the experience of our Pensions Direct business to fall back on. We also knew that many of our own investors would prefer a SIPP to their existing pension arrangement. New legislation made it much more difficult than before for life companies to prevent the transfer of accumulated pension funds elsewhere. Our clients transferred their pension arrangements in droves. Most were disillusioned with the poor performance and the lack of information offered by conventional pension providers. Our SIPP business has continued to grow. At the time of writing we have around 10% of the SIPPs in existence. And although our funds business remains the biggest part of our operation, I suspect it won’t be long before SIPPs have overtaken at least our ISA operation in size.

One thing SIPPs have given us that we have never had in the past is a proposition for clients in their 40s and younger. Our typical client previously was over 50. What with school fees, property prices and all the other claims on their finances, we rarely got to talk to potential investors until their children had left home. However one financial commitment that many people do make before that time is contribute to a pension. This means that we are talking to our potential clients much sooner than we have in the past.

It soon became apparent to us that there was another business opportunity in the pensions business, which was in the sale of annuities to those who have reached retirement age. The unusually low interest rates that prevailed during the early part of the 21st century had a profound impact on the annuity rates that could be paid by pension providers. In fact, annuity rates were becoming so meagre as to be derisory. Clients were naturally extremely annoyed at how little income their accumulated pension funds were capable of producing. The situation highlighted a real problem with compulsory purchase annuities. These are one of the few financial products I can think of where the more money you put in, the worse rate you stand to get. Someone who places £50,000 in an annuity will get a better rate per pound of annuity income than someone who places £500,000. The reason is a simple matter of longevity. Life companies many years ago noticed that people who had the most money in their pension funds were also the ones who were most likely to live the longest. Since an annuity is an income for the rest of your life, it therefore makes sense for the life companies to be more cautious about paying good rates to people with large sums in their pension funds, given their greater life expectancy. This should be a salutary lesson to all citizens: the more financially comfortable you can make your retirement, the better and longer will be your final years.

All this led to clients taking an increasing interest in what is known as a drawdown pension arrangement. With a conventional pension arrangement, when you retire you can take up to 25% of your accumulated pension fund as a tax free cash payment and buy an annuity with the balance. The annuity provides you with a fixed income for the rest of your life, based on the value of your fund at your retirement date. Under a drawdown scheme, you still take out 25% in cash but the rest of your money remains invested inside the pension wrapper and can continue to grow in value even though you are now taking an income from it. Of course a drawdown scheme is not without danger as, if you take too large an income from your fund and the stock market performs badly, you could end up seeing your pension fund fall in value, even perhaps to zero. However, for many people the advantages of drawdown schemes are significant. As a result, huge numbers of our clients began to transfer the amount they had accumulated in their pensions into our SIPP and start a drawdown pension.

When the stock market started to recover after the bear market of 2000-2003, we found that we had the best business model of all our competitors. We had the best proposition for the investing public and the volume of investment that we were attracting also made us the most profitable business in the industry. We were finally categorically giving clients the best prices, the best service and the best information, as we had always wanted to do. Twenty-five years of toil and a quest for constant improvement had turned our formula into gold. However I would always emphasise that everything we have done has been based on a simple three point rule, one that all our staff know and understand. It is: Put the client first. Put the business second. Put yourself third.

Ruling out a trade buyer still left us with options. One was to remain a private company. The families of the major shareholders could have continued to hold the shares and with a sensible dividend policy, this could have made for a good long-term investment. However with an entrepreneurial business, it is always difficult to find and retain the best people if ownership of the business remains closely held in private hands. Another option at some stage was a management buyout led by the senior staff. This, however, would only have delayed for a short period of time the next step, which would be either a trade sale or, more likely, seeking a quotation for the shares on the London Stock Exchange, something that today is called an IPO (Initial Public Offering), or flotation.

We decided that if that was the most likely long-term outcome, we would rather be in control of the process ourselves. Why not go straight for the flotation option while the two of us were still in charge? It had been in the back of our minds for many years that the most sensible future for Hargreaves Lansdown would be as a public company. Despite the fact that many public companies moan about the short-termism of the City, in the end we ignored the doubters and opted for that outcome. My view is that companies that fare badly with the City usually do so for a good reason. The management may be dishonest, or incompetent, or overpaid, or simply incapable of explaining the business to professional investors. It is true that becoming a public company introduces a lot of tiresome red tape that is of dubious benefit to anyone, but the disadvantages are overemphasised. It is only really onerous for people who have run their businesses as fiefdoms rather than with an eye to the long term. We have always tried to run the business as if it was already a public company. Perhaps unlike some public companies, when times were hard we made sure that the highest paid people at the top suffered first, and we tried to protect our clients and staff from periods of poor trading.

Despite all these positives, I nevertheless found the decision to go for a flotation surprisingly difficult. I suppose that I was the main dissenting voice. Being a vocal opponent of bureaucracy in any form, I didn’t know how I would take to all the procedures, process, regulation and reporting. I also felt it might be more difficult to make good long-term decisions at the cost of short-term profitability, as any successful business has to do. Stephen was the most confident that we could be a success as a public company, partly because he had always handled the regulatory and legal side of the business and knew better what to expect. He also pointed out that neither of us was getting any younger and while I was older than him, he had more outside interests. His two children were already in gainful employment elsewhere. When you have given over a quarter of a century to a business, it is only right that you should have an opportunity to reap the benefits and put in place a structure that enables you at some stage to “take it easier”. Another factor was that in both our cases 98% of our assets were tied up in one single investment. As investment advisers, we would never have advised our clients to be in such a situation.

Theresa had a more interesting take on the possibility of a float. She felt that as a private company we didn’t always make hard decisions. Arguably, she felt, we had gone a little soft. When you run a highly successful private company, it is easy to become complacent. She felt that competing with other public companies would force us to improve our systems, our marketing, our financial reporting, our research and our administration. In other words, it would keep us on our toes and make us a fitter, stronger business. There is no doubt that as a quoted company we are a much stronger and fitter business than we were, and some of this improvement was down to the positive effect of preparing for flotation. I would like to think that we are still delivering the same “knock your socks off service” to our clients.

I suppose I had another more philosophical reason for agreeing to the flotation. I felt quite strongly that it would have been more difficult to recruit and train the right people if we had continued indefinitely as a private company. I was mindful of the experience of a marvellous hotel in South Wales that I know well. The hotel building is one of the best in the UK. While the building from the outside is not the prettiest in the world, inside it is a wonderful conference centre and resort. That’s where the positivity ends. The owner is not an hotelier and although he recruits people to run the hotel, the truth is that there is no career path for any of the people who work at the hotel. They have to wait for someone else to leave before they can move up. There is no incentive to do well at senior management level because there is little chance of an internal promotion. The best people leave to join top hotel chains. The result is constant staff turnover. They consistently lose the best. I felt that spreading our wings to give people the chance to become a director of a public company would help to retain and motivate our key people. We could also of course grant share options to keep the right people and with a real share price rather than an artificial one (like the shadow price that many private companies adopt) they could feel confident that there was always a market for any shares granted to them.

However, more than anything, my age came into play. Whilst I have always said that I never want to retire, the City will doubtless have something to say about that the older I become. They might well believe that at 60 I have the drive and energy to carry on until 65, but they may become sceptical of someone aged 65 saying that they wished to work until the age of 70. While I am in excellent health, there is always a concern that your health could deteriorate. (Warren Buffett, the great American investor, is still going strong in his late 70s and his sidekick Charlie Munger is in his 80s; but even they have had to start planning the succession when age finally catches up with them). Therefore, if a flotation was the preferred option and it was going to happen, it seemed right to do it sooner rather than later.

There are many ways you can approach a flotation. Most people, I imagine, go initially to their accountants, a process which I would not necessarily recommend. When one of our earlier firm of auditors had taken us through the process some years before, I left their presentation after ten minutes as I realised that they knew, if anything, less than we did about it. I suspect that some City accountancy firms would acquit themselves somewhat better. Another route is to go directly to the corporate finance department of a leading investment bank. You can find them easily enough by looking at which banks other companies have used for their flotations. The problem for a medium-sized company like ours is that if you go to someone with too high a profile, there is a chance you may get their B team. Alternatively you can end up with an investment bank that wants you as a client and is ready to put a lot of work in, but may lack the right team to perform the duties properly. We certainly had no idea who would be interested in handling our float, who could do the job superbly and who would give us the best team available.

We therefore took what we believe for us was the best route and a route that we would probably recommend to other companies who are contemplating seeking what is now widely known as an IPO (initial public offering of their shares). We interviewed four firms who all suggested they were experts in guiding firms through an IPO. Of the four firms we ended up deciding to talk to we rejected a couple immediately. That left two in the frame. To save the blushes of the two firms we rejected out of hand, and the one who failed at the final hurdle, I will not divulge their names. To be honest, all these three firms would probably have done a good job for us, but there was one with whom we immediately felt most comfortable. They weren’t the biggest or the best-known of the four firms, but they impressed us with their knowledge and commitment. We all got on well with the team that they fielded and we were assured that this would also be the team that would stick with us throughout the process. Having heard all the presentations, my board was unanimous that Lexicon Partners were the firm for us, and we decided to retain them.

The first thing Lexicon had to give us was a feel for how much the business might be worth and on which basis it was best to value it. To do that, they had to understand the business, they had to understand our competitors and they had to establish the viability of our business model, the sustainability of profits and in general the quality of our management and our ability to grow profits and survive in all trading conditions. This was a relatively painless process, though it did involve their having access to all our key people.

Having done that, they suggested that we hold another beauty parade similar to the one that we had conducted to find them. They told us that we would need two firms, not just one. This came as a surprise to us. They felt that we should appoint a leading investment bank to be the main sponsor and also a co-lead manager, who would take a smaller role but whose analysts would cover our stock once we had become a public company. I will again spare the blushes of the firms that failed to win the business. Over the course of two days, most of the top City firms came and presented their views on what they thought of our business, what they thought it was worth and how they would bring it to the market. I was astounded by the difference in how much preparatory work each bank had done. One firm had done their homework very badly. Another big firm whom we felt should have been at the top of the list seemed not to have realised one important fact about Hargreaves Lansdown. (According to Lexicon, the guy who was making the presentation appeared only to have read it for the first time in the taxi on the way to Lexicon’s offices!).

It was only about halfway through his presentation that he realised what a potentially valuable float Hargreaves Lansdown would be, given our strong and close relationship with all the unit trust groups. As all the big banks have equity departments which court the unit trust groups to try and win their stock exchange dealing business, doing a good job for us in the flotation could be worth a lot of money to them. Quite simply we were the customers of their best clients. Having missed that one fundamental point, it left us wondering what other points the firm might miss as well. (This particular individual, to give him credit, did subsequently pester me to death with numerous phone calls in an attempt to recover the situation, but it was by then too late).

After the initial round, we were fairly sure who our first choice in the process would be, but decided to call in the top two again so as to talk to the analysts who would be covering our stock after the flotation. Unfortunately the bank we initially preferred had an overworked analyst in our sector who didn’t acquit themselves terribly well. Although the bank later tried to recover by offering us another analyst, the job was already slipping away from them. The firm we eventually retained was Citibank, the world’s largest financial organisation. We were frankly amazed, and somewhat flattered, that they had fought so hard to get our float. Nevertheless we were clear that they had been chosen on merit, not because of their size. It helped that they also were able to offer us the top analyst in our sector, which was an important factor in our decision to retain them.

I am not easily pleased, but I have to say that we could not fault Citi for the work they did for us. From the moment of making the decision, we not once regretted their appointment. Their team was every bit as good as the Lexicon team and we felt that we now had almost every part of the equation in place. We then dropped a small bombshell by saying that we weren’t going to do what most companies do, which is use a firm of City lawyers for the legal work that accompanies a flotation. Instead we insisted that we were happy using our local firm, Burges Salmon, whom we knew well. We had a particular high regard for the partner who we would be dealing with on the flotation, and we knew that as an important client we would get that partner, whereas if we went to one of the leading City firms we suspected we would end up with someone several levels down from partner. Citi and Lexicon were slightly nervous about this, as they had never worked with a local firm on a flotation of this nature before. Once we invited them to meet our lawyers, they realised that we had also made a good decision in that area.

Then the real work began. Recognising that the worst thing you can do in a flotation is to take your eye off the ball, I made a pact with the directors who were going to be involved with the flotation that I would concentrate on running the business. The bulk of the work involved in the flotation fell to Stephen, Martin Mulligan, the finance director, Nigel Bence, the compliance director, and Theresa Barry, who was adamant that the tone of the prospectus should not be any different from the way we deal with our clients. There is a fine line to be drawn between selling a company and giving the right message to both clients and potential investors. The fifth person in the team was Tracey Taylor, our group accountant and company secretary, who burnt much midnight oil again during the period of the float.

True to form, we had the satisfaction of dropping two more bombshells on our advisers before we were finished. One was to say that we wanted to act in the sale of our own shares, something that to our knowledge had never been done before. We were informed that we simply couldn’t do this, to which we replied that our advisers should show us which part of the legislation explicitly precluded us from doing this, otherwise we said we would go ahead. We had absolutely no doubt that we would promote our own shares to our own clients more fairly, more efficiently and with superior administration to anyone else. The City has always been assiduous at protecting its monopolies, but we were not going to take no for an answer. The only problem was that everyone agreed we could only sell the shares ourselves on the basis of a full prospectus. For IPOs, these are lengthy documents that earn a fortune for the lawyers and bankers who spend weeks drafting them and filling them with small print that nobody reads. Since there are a million people on our primary circulation list (that is how many people have dealt with us over our 20-odd years in business), we clearly could not send out a full prospectus to everyone. The cost would have been astronomic.

As it was, we did discover what a gravy train flotations can be for those who are part of the conventional process. It would appear that firms of security printers spend hundreds of thousands of pounds lavishly entertaining the investment banks. They can do this because when it comes to documents printed by security printers, nobody seems to check how much they charge. As the investment banks can simply charge the cost of a “prospectus” straight on to the client, they are indifferent to how much it costs. This goes for all the documents relating to a corporate event. There are lots of unnecessary add-ons. For instance, the printers often say they have a full team of “typesetters” working overnight to make last minute changes to the prospectus, even though today, with modern technology you can do it in your own office with an ISDN line. Copy for printing can be changed seconds before it goes to press without any typesetter touching it. My guess is that many companies pay 10 times more than is necessary for their prospectuses and other corporate documents. We discovered this thanks to a tip-off from someone we have been involved with floats for many years. Since we buy huge amounts of print ourselves, it was easy for us to get a quote for the job from our own printers. Of course “security printers” make a lot out of the fact that confidential documents are safe in their hands. All I can say is that in the two major insider dealing incidents we have ever come across, one of them was perpetrated by someone who worked for a security printer.

In part because of the cost, we decided at an early stage that we would have another first and make the Hargreaves Lansdown private client offer an internet-only offer. To our knowledge this was the first time that an IPO in the UK has only been available on the internet. All previous internet offerings had required people to print out an application form and send the application form with a cheque. Ours was the first offering that enabled people to subscribe directly for shares online. The only stipulation was that the money had to be in place already in our nominee account. The reason we had to do this was that if the issue price of the shares was to change at a late stage, as does happen, we would have been required to inform all our clients of the change in final strike price. It would have been physically impossible to contact them any other way than via email. This was difficult to explain to those clients of ours who did not have internet access, and were therefore effectively debarred from the issue.

Looking back, the flotation process was every bit as time consuming and involved every bit as much work as we had been warned it would. The most stimulating part of the process was the final roadshow. While the thought of it filled me initially with trepidation, it was very enjoyable explaining our business – the business that we love – to potential investors. We were asked both pertinent and impertinent questions and welcomed them both. In the event, as history records, the flotation was an overwhelming success and was many times oversubscribed. Although we set a strike price of 160 pence, the shares immediately started trading above £2.00 and during the summer of 2007 reached the dizzy heights of £2.40. I have some good memories of the process. After one particularly tiring day in London during the roadshow, Martin, Stephen and I decided to watch a European Championship football match in a hostelry that was screening the matches. Liverpool were playing Chelsea and since our finance director is from Liverpool, of course we had to support them. The only seats we could find were three barstools at the back. It seems that at one stage Stephen had to hold me up because I nearly feel asleep and fell off the stool. By the way Liverpool won. Another amusing incident came one afternoon when I had sneaked off from the roadshow to go racing. I had a horse running at Ascot in the afternoon and a horse I shared with another guy was running in the evening at Kempton Park. In my absence Stephen and Martin did the afternoon’s roadshow without me. At a meeting with one of the investment groups that know me well, one of the fund managers asked the question: “Who challenges Peter when he is wrong?” Stephen, very quick-witted, looked at them and said “Is that a hypothetical question?”

The flotation, looking back, was clearly the most time consuming and important thing we had ever dealt with in such a short space of time. I was particularly pleased that we managed not to take our eye off the ball during the flotation period. The business did not suffer. Indeed the higher profile it gave us enhanced our business. Having always strived to make everything we do the best in the business, we certainly felt that we had surpassed our own high standards with the float. There were two firsts – the first time a broker had marketed its own shares and the first genuine internet-only offer for sale. At the “Awards for Excellence in Investment Banking” later that year, our IPO was awarded a prize for the “European Mid/Small Cap Deal of the Year”.

I have one other personal memory of the flotation process. The first week of our schedule was arranged so that most of our presentations were in London, apart from a brief foray north of the border to Edinburgh and Glasgow. The last meeting of the first week on the Friday afternoon however was with our old friends Perpetual in Henley. It was funny sitting at the other side of the table from these guys who for years and years and years had been selling us their wares. It was of course friendly fire and made for a lovely end to our first week of intense marketing. We had arranged for a car to pick us up at Henley. Stephen and I normally make sure we never travel together, for obvious reasons, but we made an exception on that Friday afternoon. As we were driving back along the M4, I brought up the subject of the important match that Bristol City were playing the following day. Stephen is chairman of Bristol City and the match turned out to be the one that clinched their promotion to the Championship from the First Division. You need to know that Stephen had recently treated himself to a small executive jet. As I was talking, he suddenly mentioned that Amy, his daughter, was coming down for the match. She is a doctor and at that time was working in a hospital on the North Cumbrian coast. “Are you sending the plane up for her?” I asked. “Yes” he said. Then he turned to me with a big grin on his face: “We really haven’t changed much since we started out in your spare bedroom, have we, Peter?”