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Daniel Harrison experienced life in an entrepreneurial financial services company from a young age when he joined his father’s advisory business, Positive Solutions, at just 17.

Less than a decade later, in 2007, he helped his father to launch True Potential, a provider of technology and support services to independent financial advisers. And a key part of their strategy was that True Potential would build its own technology.

“A lot of the thinking behind True Potential was a recognition that we had to own as much of the value chain as possible, when it comes to being the best wealth manager,” explains Harrison. “That’s quite different from how the rest of the industry works.”

The company, which is based in Newcastle, expanded over the years to offer own-branded investments and a service allowing customers to invest in individual savings accounts and personal pensions directly, rather than through an adviser. “Advisers tend to be the gatekeeper in the industry — it was a very natural place to begin,” says Harrison.

Almost two decades on, True Potential now manages more than £31bn for some 539,000 customers. Revenue rose from £28mn in 2013 to £407mn last year, placing it 151st in the FT/Statista ranking of Europe’s Long-term Growth Champions.

The business works with about one in five of the UK’s financial advisers. Harrison’s father, Sir David, was chair until last year. But, like many other fast-growing companies, its journey has not been entirely smooth. It launched during the financial crisis, which might have slowed its early growth, Harrison says.

The adviser industry then underwent huge change in the wake of rule changes in 2012. These were aimed at improving financial advice by ending commissions from investment companies to advisers for selling their products. But tougher qualifications for advisers led many to leave the industry. According to regulator, the Financial Conduct Authority, the number of advisers has fallen from about 40,000 in 2011 to about 37,000.

Harrison saw this as an opportunity, though. “What’s boosted our sales growth over the last four to five years, in particular, has been working with advisers to help them retire,” he says. “We’ve worked with them to move their clients across [to True Potential]. Why have we had good growth from that? It’s mainly been down to the age of advisers and the scarcity of them,” he says — noting that, in the UK, they are typically in their late fifties to early sixties.

True Potential paid advisers 8 per cent of each client’s assets to move across to its service. However, it has attracted a handful of complaints from clients, some claiming they were switched to less suitable products when they were moved across.

This is one of the reasons why the company stopped offering the 8 per cent payment. “We wanted a longer-term approach with onboarding clients,” Harrison explains. “We try and add our clients one by one. We don’t pay the adviser any payment at all until the client has . . . agreed to move across. A big thing we have to do as an industry is be very upfront with the client and say, ‘If you choose to move across you will get X, Y and Z, and it will cost you X, Y and Z.’”

Although True Potential has benefited from advisers retiring, Harrison says more needs to be done to recruit people to the profession. “About 50 per cent of all advisers are over 50 . . . less than 6 per cent below the age of 30 — that’s not a quick fix,” he says.

The company has about 1,200 wealth management partners who are self-employed but exclusively represent True Potential in selling products. The company also works with 500 advisory businesses that are contracted to use its services.

Harrison believes there are huge growth opportunities as not enough people are preparing for retirement. He says auto-enrolment in company pension schemes “is great”, but the minimum contribution of 8 per cent is too low. “You need to get it to 10 per cent as quick as possible and as young as possible,” he argues.

True Potential launched its direct-to-consumer service and workplace pensions in 2016. The “do-it-yourself” service allows customers to buy True Potential investment portfolios, which are managed by third parties such as UBS, Allianz and Pictet, without taking financial advice.

Another milestone in True Potential’s growth was private equity firm Cinven taking a majority stake in 2021. Cinven partner Caspar Berendsen said True Potential’s business model was “truly differentiated” in the way it efficiently brings on board advisers in a sector “where there are strong structural growth drivers”.

Despite the growth opportunities, Harrison has now decided to step back as chief executive. “The main reason is, Cinven signed three years ago — and I committed to working for three years with them,” he explains.