Forty-five years in the finance and investment worlds – Part 2.

Location : Norwich, Derby, London

Back to Norwich – for London Life!

But it meant leaving Norwich Union at that point.

Yes, it meant leaving Norwich Union. I didn’t want to leave Norwich Union particularly at that point, all I wanted to do was work for Norwich Union in Norwich. But it was going to take me probably another 15 years. Because Norwich branch, out of the 120 branches, was in the top five; because everybody in Norwich did their business with Norwich Union. There was the London City office, there was the West End office, there was Birmingham, Manchester, Norwich. They were the big branches, huge branches with tons of business pouring in. We did huge amounts of pension business. We insured all the big companies. Boots the Chemist – no, London Life had Boots the Chemist – but a lot of big companies were insured, and still are, with Norwich Union. They were huge. I was 35 so I had another 25 years before I retired and I thought, if I have to move every three years, that’s another eight moves, so the children have got to move house and school each time. Whereas if I go to Norwich and I’m successful and enjoy what I do – because it was a very similar company – London Life and Norwich Union were very similar – and what I used to say was, “I worked for the Norwich in London, and I worked for the London in Norwich.” (Laughs.) I fell into that … yes, it was a manager’s job. And eventually when I left London Life I had a team of 50 people working for me. I had three branches – Norwich branch, Chelmsford branch and Nottingham branch. I had the whole of Eastern England from here in Norwich. And I said, “Whatever you offer me, I am never going to move from Norwich.” I was born in Norwich, the children are settled in Norwich – eventually, they were doing their A-levels, and so on, here in Norwich.

And it was the best move I ever made, moving to London Life. A lovely company, they were gentlemen – compared with Norwich Union they only had 20 branches as compared to 120 branches, so they were much smaller. However, they were much more professional, a much more gentlemanly approach to things. We went for what we called the “high net worth” market – in other words, we went for customers, clients, who were very rich. We approached Estate Agents, solicitors, accountants, doctors, dentists, managing directors, etc. That was our market. Again it suited me very well to deal with them.

And was it life insurance?

Exactly the same. Life insurance, pensions and investments.

I don’t know if they’re still going are they, London Life?

No, that’s the reason I didn’t work for them anymore, because they closed down. They closed down all their branches. One day there was an announcement, like all this redundancy that’s going on at the moment. “We are closing all our branches.” All 20 branches and all 200 people working in the branches – there was an average of about 10 or 20 in each branch – everybody was made redundant. At a stroke!

When was that?

That was 1994. And I was just 50. I had what I thought was ahead of me another ten years until I retired at 60. We’d bought a brand new house in Thorpe St Andrew, had a huge mortgage, because I had a pretty good salary. We’d bought this lovely new house. Shock, you know, horror! (Laughs)

Did you see it coming?

Yes, yes, I did. I saw it coming, I knew it was coming.

So what happened with the house?

In fact, when I say the whole thing was closed down, I got out before they actually closed down. I got another job, with Barratt and Cooke, the stockbrokers. That was 1994.

We’d bought the house, we had a mortgage, so we decided that we’d downsize. So – this looks quite big doesn’t it, but the other house was much bigger – and also by that time the children had left home – so this is a nice size, it was a lot lower in value than the one in Thorpe and so we came here and paid off the mortgage. We had no commitments. I knew C.B., who owns Barratt and Cooke, very well and so I wrote him a letter and said, “I’ve finished with London Life, I’m looking for another job. Have you got a vacancy?” (He hadn’t advertised.) “Can I come and see you, I’ve got some ideas I’d like to discuss with you.” I sent him my CV, and by that time I’d completed 30 years, 15 years with Norwich Union, 15 years with London Life. I’d had 30 years experience of managing people and getting investments and so on. He said, “Come in and see me.” So I went in to see him and he said, “Well, let me think about it and I’ll get back to you.” And within a week I got a letter saying “We’d like you to start …” with Barratt and Cooke. I was extremely lucky there. And London Life had folded and all the people working there had lost their jobs as well, so I started with Barratt and Cooke, and again a most wonderful 15 years of my working life. I really enjoyed every minute of it and sad that I’m not there any longer.

Just before we leave London Life, when you say they were very gentlemanly, what do you mean by that? Old fashioned, or correct, very correct, good manners?

All of those things, all of those things. My sort of person they were. I mean … I’m not a football lout, let’s put it that way. I’ve got high morals, I’ve got high ideals and I like to think I’m doing things properly and correctly and have a certain attitude towards life. The people I worked with at London Life were all just like that, they were nice people, they’d come from good backgrounds, and I got on really well with them, and I keep in touch with them as well. I was only looking at my e-mails the other day, and there was an e-mail from a chap I used to work with, he was the managing director in fact, of London Life, saying he was organizing a Christmas reunion, and would I like to go along. We send Christmas cards to each other. They were nice chaps.

You like talking to the clients as well.

I do, I enjoy that.

Why did it fold, why was that? It was that slump of the 90s?

That’s right. After the stock market crash in 1987 we all went down, all the managers went down to Bristol, which was the Head Office. They had relocated. When I joined London Life they were right in the City of London, but they sold that and relocated to Bristol. So their Head Office was in Bristol. In the crash of 1987, October-November 1987, we were all called down to Head Office, and they said, “This is disastrous for us. Our assets have halved and we’ve got to do something about it.” Several managers were made redundant then, on the spot, in ’87 but I survived that. So I felt really fortunate.

And after that, insurance companies generally, all insurance companies really sort of looked to what they were doing seriously – because they were under huge financial pressure because of their assets slumping. The FTSE 100 Index went from something like 1200 – and it’s something like 6000 today. It went from about 1200 to 800, something like that, I can’t remember the exact figures. The whole value of investments dropped considerably. It was a black day, there was a storm, the storm of ’87, a bit like we had last year. They all reassessed their positions. A lot of companies then, from ’87 to ’94, over that seven year period, were closing down, they were consolidating, they were bringing in their branch staff, their sales staff. They were selling direct from newspapers, telephone marketing etc. That started as well at that stage. So I could see the light. And we lost in London Life two general managers very quickly, and the new man came in and he was a football lout! He wasn’t a London Life man as we all were. I saw the writing on the wall and luckily I read it right and got out and joined Barratt and Cooke.

Norwich investments

I don’t really know anything about investments, investment firms and so on, it all seems a bit mysterious to me. Is there any way you can explain it to me, what that involved?

First of all, I have personal rules. When I became a stockbroker – and I had to become a member of the profession of stockbrokers – you know, you don’t just turn up like a painter and decorator and start doing it from day one! So I had to learn the job, and again, I have been very fortunate in my life in having very good teachers. Mr D. with the West End office was a very good teacher, and many other men throughout my life have been.

I joined Barratt and Cooke, and there was a retired accountant there, called P.Sc. He is now in his eighties. C.B. said to him, “You’ll look after David. He is going to do your job” (P.Sc.’s job.) P. was 65 then and I was 50. “P., you teach David all you know!” C. used to talk like that … “You teach David all you know.” Because the other chap was going to retire? He was going to retire. He was 65, and he was already down to three days a week. He was a fully qualified accountant, he’d been senior partner of a big firm of accountants in Norwich, but when he retired at 65, he joined Barratt and Cooke. But he knew all about investments because he had been an accountant all his life. I mean, I knew a bit, because I’d been in insurance in investments with the companies that I’d worked for. C. said, “Right, you teach him all you know.” (I worked full time.)

P. taught me all he knew about stock broking. As simple as that! We had adjoining rooms and if you can imagine that wall is filled up [shows interviewer a dividing wall], this wall in the middle, to the door. He was in that room, and I was in this room, and if he wasn’t seeing a client he would pass on his advice – because that’s where all our business was done, with clients. You were my client, like you would have been in the Norwich Union, or London Life in those days my investment client, just you were now my stock broking client.

“I want you to invest some money for me. I want your advice and expertise.”

Exactly. If I didn’t know the answer to a question, I would knock on his door, “P., can you help with this?” And he was patient, he was so good, he was so experienced, he was so well qualified, he’d tell me exactly what was what. So if I could pick that up, which luckily I did, then I could learn to be a stockbroker. And within weeks or months, I was a member of the Stock Exchange.

So that’s how you become a member of the Stock Exchange? You sort of learn your trade from somebody …

You have to take exams, you have to be able to answer all the questions. You have to be able to deal with your client, you have to do everything without making a mistake. It’s absolutely vital – what’s more important – your money or your life ?! (Laughs) People will sometimes say, “Oh, my money is more important than my life.” And they would come in and see me. I used to have my own rules. Because I used to say, well, if I’m not prepared to do this myself, then it is not worth the client doing it either. And in the 15 years I worked with Barratt and Cooke – well, the 45 years I worked all together in the investment industry – I never had one complaint. Because I treated my clients as I wished to be treated myself. And the first thing I would say, when someone came in … and people used to come in just off the street with loads of money is “Are you prepared to lose it all?”

So they weren’t just firms and things?

No, this was all individuals. When I was in insurance it was companies, more often companies.

So people would come in with loads of money …

Yes. Literally. Loads of money. Bags of money? Well, a cheque! People would know how much they wanted to invest. The first thing I would say to them … we were talking about say, £50,000, £100,000, a lot of money. By the time I had come to the end of my 15 years a lot of my clients were millionaires – not necessarily through me, but they had accumulated all these assets over the years. The first thing I would say to them “You’ve come in here today to talk to me about investments. Are you prepared to lose every single penny of that money? Yes, or no?” Some people would say, “Yes!!”. And I would say, “Well, that’s strange … you’re prepared to lose £50,000?” “Yes.” And I’d say, “You could do a lot with £50,000.” And they would then say, “Well, I’ve seen the stock market, I’ve seen the FTSE 100 Index, I’ve seen it go from 1200, or even 800, in 1987 to 6000 in the year 2010. I’ve seen it rise all that time. If I had put £8000 in in 1987, it would be worth £60,000 today. I am prepared to take that risk, with the risk which you tell me that I could lose everything.” So I said, “Fine, as long as you are aware of that … sign this piece of paper and say you are aware of it …” because they need to know that they could lose. And I then would say, “This is like gambling, you are gambling on the stock market, it’s just like putting money on a horse, really it is. Unless we go for either something that you want to invest in, or we recommend, not even recommend – we suggest, you invest in, because they’ve got a pretty good track record. But however good their track record is, they’re not infallible.”

“Look at Woolworths, look at Rail Track, look at GEC, look at Marconi – look at all of those companies that have gone bust over the years. And if you’d put £50,000 into any of those companies you would have nothing today. And they were well regarded – this chap in the news recently, the founder of Polly Peck, I don’t know if you have heard about him, he is a Greek Cypriot, he set up this company in London called Polly Peck. People thought it was the bee’s knees, and people were investing thousands, millions in it in the FTSE 100. And Polly Peck went bust, so, you are gambling, there is absolutely no guarantee that this money will do well.”

On my desk I had a little piece of desk furniture which was in the shape of a crystal. In fact, it was a crystal. And I said, “That could be a crystal ball, but it won’t tell me anything at all. I can’t look at the future and tell you how well a particular share is going to perform. And look, there is a bit chipped off so it is not a perfect piece”. I would put people off, I wouldn’t encourage them, I wouldn’t say, oh, great, do this, do that or the other. I would give all the negatives first of all. And then if they said, “No, I’m not prepared to lose this money”, I would say, “Well, you shouldn’t be here really. I would not like to be responsible for the performance of your money because I can’t guarantee that you’ll do well.” So there’s the door, “I suggest you go along to the building society and put it in a building society. You shouldn’t … ” (but of course I didn’t know about Northern Rock and Bradford and Bingley or any of those companies in those days) you shouldn’t lose money by putting it in the building society. If they said “Yes”, I said, “Well, now we can talk. You can tell me which companies you want to invest in.” Because I always had the adage, the client is always right, and if he wants to do that, he’ll have more faith in that particular company than another one, perhaps one that I’d recommended. So we’d go through it together and then decide what we would do. The other thing is, my other statements would have been, “Don’t put all your eggs in one basket.” Have a spread, because if something goes wrong, like the property market, you put it in property and there is a drop there, you’ve got others which have remained stable. And sometimes they all fall together, like 1987. Like, you know, we had in 2000 as well, when the FTSE 100 got up to 7000 and now it has only just, in 10 years, climbed back to 6000 today, so if you invested right at the top of the market when the FTSE was 7000 and you put £7000 in, let’s say, well it dropped right back to £3000, and now it’s climbed back up to £6000, so you still haven’t made a profit.

So were you around at that time?

Oh yes, through all of that. Right up to now, virtually. Even though I’ve retired, people still ring me up. Again, my attitude was to make friends with people, and get to know them. “Hello, how’s the family? How are the grandchildren?” I used to remember exactly what sort of hobbies they had. Whether they liked old cars, or things like that. Paintings, or whatever.

In the media – toys and stock market reports

So that job suited you down to the ground, dealing with people and using all your financial knowledge for a new challenge and having to learn all about these new investments and things.

To a certain extent I had been dealing in that market. Otherwise C.B. wouldn’t have taken me on. I was aware of finance, I was aware of the FTSE Index. And then, what year was that …? Probably about 1997, I had a phone call from Radio Norfolk and the chap on the other end of the phone said, “Hello, I’m Tony Mallion from Radio Norfolk. I’m just about to launch a new teatime show on Radio Norfolk called Drive Live (or something like that) to cater for people coming home from work, starting at five and going through till seven”. He said, “I’ve had an idea that I’d like to do something about the stock market, and give a stock market report. Would you be happy about coming on the programme every day?” So I talked to C.B. about it, and he said, “Yeah, you do, if you want to.” And so from 1997 virtually every night of the week I was on Radio Norfolk doing the stock market report. I did about 10 minutes. I used to split it up into three, you know, sort of one, two, three – so I had three things to talk about. And then at the end Tony would say to me, “Well, D., what’s the FTSE done today?” and I would say, “oh well, it’s been a pretty good day on the stock market Tony and the FTSE finished up tonight at 5851 and the Dow Jones (the American) is at 10,150”, whatever. So that is how we worked. It was quite good. Because I used to do – Lotus had a report, Norwich Union had a report (of course by that time they had become Aviva) and Anglian Windows, Anglian Water, all the local companies. Jarrolds, when Jarrolds Printing went bust. I reported all of these things. When there were new cars. When Jaguar had difficulties, when Rover went bust. All of that sort of thing. I used to bring it right up-to-date. Because it was all happening here. I’d make it local, and I’d try and make it interesting and understandable. And people still remember me doing it.

So how did they get your name, was it just contacts?

I used to do this programme about toys on Radio Norfolk, you see. It was a phone-in. I have been doing that for 25 years now. They knew me quite well. So David Clayton, who is the manager now on Radio Norfolk, he used to invite me on. As you can gather, I can talk a bit! I have written some books on toys. I’ll show you a couple before you leave.

So I had to be correct, I had to be accurate, especially as far as the stock market is concerned, you have to be accurate.

And that was good for your business as well, then?

Absolutely! Tony and I are like this [closes hands together] – he’s a fabulous chap. And we had a concert. I organized a concert a couple of years ago – for my sixty-fifth birthday, my retirement and my sixty-fifth birthday. I organized a concert at the Maddermarket Theatre and I invited all my friends and clients to come to this evening. It was a musical and poetry concert and it was really lovely, it was a very enjoyable evening. From 7.30 to 10.30. And Tony Mallion, I asked him to be Master of Ceremonies, so he was in his dinner jacket and he introduced all the different parts. Tony and I really get on well together. He used to come on the programme – it was about twenty to six in the evening – he used to ring through “Hello Tony,” “Hello David. What have you got this evening, David?” My three subjects: “Marks and Spencer’s results are out today. BP are in trouble in America and Anglian Windows have just had their report.” So he’d know the three subjects. Then when we went live – because all this is live, no recording, straight off – he’d say “So what’s it been like on the stock market today, David? I hear some local news – Anglian Windows results are out.” And then I’d do my spiel on that and finish up with the share price. “Share price tonight when they closed at half past four was 450 and so on.” Then he’d go on, “What’s happening at Marks and Spencer’s, then?” So I’d do that and then we’d finish. We had a very good repartee together. I miss it to a certain extent, but I’ve got dozens of things that I’ve replaced it with!

Were you one of those people who would be ringing up the stock exchange? Putting a million here – a thousand there?

No, all I did was for my own particular individual client. So when you’d come in with £50,000, I would say to you, “Right, what I would recommend that you do is you split it between ten companies – ten or 15 companies – so that you have a good spread of the market.” So you do oil, you do retailers, you do pharmaceuticals, you do mining, you do 10 or 15 different areas of investment. So you are spreading the load. You are not putting all your eggs in one basket. And of course mining at the moment has done really well, because there is a shortage of minerals and metals. So that’s what I would then recommend to you. You would say yes or no, or you would say, “I’d rather have Tesco’s than Marks and Spencer’s …” So fine, no problem about Tesco’s you can invest in Tesco’s.

So you would go away and do the investments.

I’d do it straight away. I’d then ring up what they call the market maker. You’d be here in office and I’d say “When do you think you’ll be able to give us a cheque?” And you’d say, “I’ll give you a cheque now.” And we’d work out how many shares you’d buy, for example, one of the areas that you would invest in probably is oil, and we would recommend Shell oil company, that’s one of the oldest companies, longest-lasting companies on the stock market, going back right to the 1920s, 1930s. Very good track record. So I’d say, “Right, the price of one share in Shell today is £20. And so, however many pounds you’re investing, two shares £40, 20 shares £400 and so on.” So we’d allocate all the figures there and you’d then go out of the office with what we call contract notes that say exactly how many shares – say you’ve got 500 shares in Shell at £20 each, you’ve got 1000 shares in Marks and Spencer’s at £4.50 and so on and so forth. Then you would have spent your £50,000. Then I would say to you – or I would have said to you already – “This is a medium to long term investment. You are not putting it in today to take it out tomorrow. This is not a building society. This is long term.” So we’re talking about 15 to 20 years ahead. Depending on the age of the client, that’s what you’re talking about. So it’s not instant return. And in the meantime the value of your shares will go like this [illustrates a graph in the air] … and unless you really want to invest in something that is not guaranteed, the value of the investments can go up as well as down, you should not be investing this money here, you should be putting it into government stocks, or building societies where your money is guaranteed.

So would you have a lot of disappointed people coming in and complaining – saying, what am I going to do now, what do you think?

You would. If you hadn’t told them in the first place, if you hadn’t explained to them in the first place, there’s going to be a lot of people coming back complaining. “Oh, you told me that this would double in value.” No, I didn’t, I never said that to anybody.

When things did go all haywire, did your business suffer … did people say, I’m just going to take the money out now?

What we did in 1987 – I wasn’t there in ’87 but I was working for another company. All the stock market crashes, 9/11, the eleventh of September 2001, etc. We would write to all the clients and say to them, “Don’t panic, don’t panic, Mr Mainwaring! Think in the long term.” Another thing I said to people as well as all the other things I said to them, was “If you lost that £50,000 would you be able to manage?”

“Have you got contingency funds?”

Exactly. So that is another thing, all of those things are really very important because then, when there is a stock market crash, the phone is not red-hot all day long. Obviously you’d get a few calls, “I’m a bit worried about this”. You know, like BP. Barratt and Cooke have said, when all this trouble with BP came up, “Don’t panic, it’s a good strong company”. The price of the share before all this trouble started was £6. It dropped back to £3, and yesterday it was £4.50. so it’s on the rise again, and not everybody invested in BP when it was £6, some invested in it when it was £3 or £4. Those people are still showing a profit, even today. And they would have had their dividends as well from the share dividends companies pay out – dividends are like interest – and they would have had all of that over the years.

So you didn’t find there was a mass panic?

No, not at all. We had prepared them, we had been honest with them, we had been transparent with them. They should have known – unless they’d forgotten!” – they should have known where exactly they stood.

That gives me a better slant on stock broking than I had before!

Stockbrokers don’t necessarily lose out when there is a stock market crash. Because there are still a few people who do decide to sell. And if they do sell, then we make commission when they sell. We make commission when they buy and we make commission when they sell. So we still have an income. Things do go quiet for a while – after 9/11 it went quiet for several months. People were scared of investing in the market. However, if they had their investments now they would have been fantastic – although they perhaps would have sold; but if they had sold at the time and panicked that wouldn’t have done them any good, but if they had new money and they bought at that time, when the FTSE 100 went right down to 3000 and now it’s 6000 so they would have doubled their money in 10 years.

That’s what I think of as investment, what you have just explained. It is just all these hedge funds and things that are a mystery to me, you don’t need to explain that …! So you were in a more personal, a more ethical, kind of arrangement in lots of ways.

Well, we like to think that. This is what we aimed for and what I still aim for. And again, one of the other things. Would I do this myself? Would I put my money where my mouth is? I always quoted that. I would say to people, “Look, I put my money where my mouth is – this is what I’ve done. This is my portfolio.” I would show people what I have actually invested in myself. Which is what I had done. I’ve made mistakes! Well, you don’t know they are going to be mistakes. Who could say BP would have had all those problems, Railtrack had all those problems. The most famous companies in the world went absolutely bust. Woolworths – OK they were just a shop, their retailers were not all that spectacular, but they’ve gone bust now. People lost all their money in all of those companies and more – Polly Peck is another one. The share price of Polly Peck went right up to about £20, just for one share, and people lost the whole lot through this man’s greed …

So you had some people who literally lost huge amounts?

Well, we didn’t recommend Polly Peck – never once did we recommend Polly Peck. So luckily none of our clients, unless they had decided to do it themselves, had money in Polly Peck. What we’d always try to do was steer a middle ground, a middle road, spread it and go for companies with a good track record, although again that’s no guarantee for the future. But, like Shell, there’ve been ups and downs over the years but on the whole they’ve had a very good track record.

Just to sort of round things off. What kind of differences would you say – major differences you’ve noticed – from when you started back at Norwich Union and now working in the industry, that you’ve experienced yourself?

In those days, way back in the 1960s, everybody was very naive about investments really. Very few people put money in the stock market. It was for the landed gentry, it was for toffs to put money in the stock market. That has changed considerably. Now virtually everybody has got some shares in something or other. Through privatisations, through companies and demutualisations, like insurance companies and building societies – people were members of building societies, they received free shares, when companies demutualised and so people have now got shares. Most people have got shares in water companies, or the electricity, gas and telephone companies. You know, people would come in “I’ve got BT, I’ve got Anglian Water” and people bought them at the time, in the late 1980s, early 1990s, when Margaret Thatcher was there and shares were a new thing. So the man in the street bought shares. Literally, we were selling shares in the street – in Opie Street – we put a desk in the middle of the road and people just flocked – queues and queues.

Really, in the middle of the road?

Well, not right in the middle of the road, cars could pass round, it is a one-way street, but we actually had a photograph in the paper of one of the staff sitting there at a desk in the middle of the road accepting all these share applications in all the water and electricity companies. We had a queue right round the block. That was tremendous business. We were up till twelve o’clock every night still processing the business. It was like a licence to print money!

It has changed considerably now. When I first started in 1963 there were 50 insurance company branch offices in Norwich. There are about two or three now, that’s all there are in Norwich. Virtually everything is done on the phone nowadays, with telephoning, television, or newspaper adverts, or people doing business direct with the insurance company. And stock broking has got much bigger, when I joined the office there were about ten of us. Now there are about 50 working for Barratt and Cooke. It has really expanded and people have got more and more interested; more and more sophisticated. There are computers, there’s the FTSE 100 Index that virtually everybody looks at every day these days to see where their investments are. People are more involved in it. In those days people were very naive about investments and people didn’t have the knowledge of investments that they do today.

So that was 45 years of my working life!

But I’m still working now, you see. I’m a trustee of a few trusts, because of my background.

Contributor adds to the transcript: Also, I am or have been president or director of several local organisations, such as the Norfolk Lymphoma Group, Norwich Rotary Club, the Norwich Traffic Club, the Norfolk Transport Group and the Bressingham Steam Museum. So, I enjoy being involved in the local business arena. It keeps me busy.

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