AJ Bell’s chair Baroness Helena Morrissey has resigned from the fund platform after a disagreement with the Financial Conduct Authority over the future role of the company’s founder Andy Bell.
Bell, 56, who built the company into one of the UK’s biggest fund supermarkets, announced plans in June to step down as chief executive and become non-executive deputy chair.
But the company said on Tuesday that the FCA had objected to the arrangement, citing a “risk to effective board governance that would arise if a founder CEO with a significant shareholding remained on the board after stepping down as CEO”.
Morrissey, a well-known City executive who founded the 30% Club to push for more gender balanced boards, will step down after just nine months in the role.
“I felt it was the right thing to do to step aside and let the board draw a line under this,” she told the FT.
The FCA approved the board’s selection of Michael Summersgill, currently deputy chief executive, as Bell’s successor. He starts in the top job on October 1. Bell will retain the right to nominate a non-executive director while he remains a significant shareholder; he holds a 23 per cent stake.
The contested reshuffle at the FTSE 250 group underscores the difficulty of leadership change at founder-led companies and casts doubt on how the FCA will treat entrepreneurs who want to step back from day-to-day management of regulated firms but maintain a role in their business.
Morrissey, who quit the board of wealth manager St James’s Place after 14 months to join AJ Bell, will serve until the board finds a successor.
Bell said he accepted the regulator’s stance. “My focus will be on helping to build the AJ Bell brand as well as continuing to support AJ Bell’s campaigning and lobbying efforts on behalf of retail investors and financial advisers. I have complete confidence in the board, Michael and the wider management team,” he said.
The company said: “The FCA have indicated that they consider their stance to be consistent with previous messages given to other regulated firms and is no reflection on the fitness and propriety of AJ Bell or Andy.”
Other founders have maintained closer links with regulated companies after leaving the chief executive’s office. Peter Hargreaves, founder of AJ Bell’s larger rival Hargreaves Lansdown, became an executive director after stepping down as chief executive in 2010 and served on the board for five years. More recently Sami Dessai, founder of lending firm Funding Circle, moved from chief executive to non-executive director in January.
The FCA declined to comment.
The disrupted succession comes at a difficult time for investment platforms such as AJ Bell and Hargreaves Lansdown as households trim investments to cope with the cost of living, and a downturn in markets has depressed their assets under management and discouraged trading this year.
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