Lighthouse Group plc (LON:LGT) Chief Executive Officer Malcolm Streatfield caught up with DirectorsTalk for an exclusive interview to discuss their new affinity contract with The Public and Commercial Services Union, how well this side of the business is progressing, plans to grow the affinity business further and how trading has been so far this year.
Q1: You’ve just signed a new affinity contract with The Public and Commercial Services Union to add to a number of other affinity relationships that you have. Can you give us some detail on what you provide for these organisations?
A1: Lighthouse Group have 21 affinity relationships and we were delighted to have agreed a new contract with The Public and Commercial Services Union for 3 years.
That contract is centred around the service provision to its members and it’s got a very robust membership of 200,000 people, that service provision allows a member of the PCS Union to contact us at any time and request a meeting for financial advice. We will meet with and discuss what we provide directly to that individual and that can range from some initial guidance all the way through to full scale holistic financial planning advice and we will respond within a set timeline to any request for that meeting.
We also respond to the Union for any forms of presentations that they want us to make to groups of individuals and historically, that’s been around the prevision of retirement seminars, regrettably sometimes redundancy counselling, it can be mid-career financial planning and we’ll even run mortgage clinics for groups of individuals who are interested in that aspect.
So, broadly, our agreement is to deliver a service to PCS Union and to our other affinity groups along those kind of business streams.
Q2: From recent news, you seem to be focussing considerably on this side of the business, would you say it’s something that’s progressing well?
A2: It’s progressing exceptionally well, now that we have the 21 affinities, they’re keeping us quite busy. We currently organise in excess of 100 events per month up and down the country in people’s places of work, these events are delivering presentations to groups of employees on a set subject or indeed running clinics on a one-to-one basis where we’re seeing 7 or 8 individuals a day on an appointment basis.
As I say, we’re organising over 100 events per month currently and that’s putting us in front of approximately 15,000 new people every year and giving us a significant opportunity to obviously engage with new clients on that basis. About 1 in the 3 clients that we’re actually presenting to actually end up being a fee-paying client of the group and we’re very very pleased with the progress we’re making there.
Our affinity business now, collectively both the historic revenue that we’re deriving plus our new business income, is now exceeding £10 million of revenue per year so it’s becoming a very significant part of our business.
Q3: How are you planning to grow your affinity business further?
A3: Well, we’ve invested over recent years in our infrastructure, we now have the ability to expand our reach and our range. The affinity customer base that we have, if you add up all the members of all the affinity groups, we have reach into nearly 6 million potential customers, this is the combined memberships of the 21 affinity groups.
So, we’ve built an infrastructure in recent years that involved buying our own premises down in Brighton and equipping them out with the relevant IT and technology, recruiting a whole new call centre team. We are, as I say, engaging with over 15,000 new people a year, we have every year increasing skill and expertise in dealing with affinity-based customers and clients and we really do feel we are fit to grow significantly into that marketplace, further than we have already.
Q4: With that in mind then, how has trading been so far this year for Lighthouse Group?
A4: We are trading in line with expectations and we continue to develop our innovative solutions for our customers. In addition, we’re seeing very favourable market conditions, the stock markets are a bit wobbly currently but at the end of the day people are retiring in ever-increasing numbers and because of the Pension’s Freedoms legislation that came through a few years ago, we are seeing increasing demand from numbers of people who are particularly seeking retirement advice.
So, we’re very encouraged by the evident quality of the customers coming forward to us and our abilities to deliver a good quality proposition to them and this allied with our unique affinity partnerships, I think, really set us apart in the marketplace. So, we are quietly optimistic that actually we’re doing all the right things and ticking all the right boxes, so we’re set fair and continue to be.
