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Making end-of-life services the starting point for growth

RONNIE Wayte hasn't lived in Ireland since 1979, but there is no mistaking the lilt of the brogue.

BROGUE: Irishman Ronnie Wayte has lived in Scotland since 1995 and is happy to see a business here growing, not shrinking. Picture: James Galloway
BROGUE: Irishman Ronnie Wayte has lived in Scotland since 1995 and is happy to see a business here growing, not shrinking. Picture: James Galloway

"I go back for a refresher course at least once a year just to retain the accent," quips the chief executive of Golden Charter, the UK's leading independent provider of funeral plans.

Mr Wayte has good reason to be chipper.

In nearly seven years at Golden Charter, he has presided over an unblemished run of revenue growth at the Bearsden company.

Turnover was £30 million when he joined, and there are hopes it will be ten times that this year, while staff numbers will have risen from 30 to almost 500 by the end of 2014.

"We've come from £30 million and with a fair wind this year we might exceed £300 million in turnover," Mr Wayte said. "We think there is enough potential space within this market - between legal services, funeral plans and end-of-life services - to build turnover to over £1 billion in five years."

Mr Wayte, who had previously spent the bulk of his career with blue-chip players such as Shell, John Menzies and Scottish Power, reflects that he joined the "sleepy" business at the right time.

"It was a good opportunity in that you could see routes to grow the business relatively quickly," he said.

"And it was an interesting market in that there hadn't been a lot of industrialisation of process in that marketplace, versus a lot of other industries."

However Mr Wayte, who lives in Paisley with his wife and two children, spotted more than a growth opportunity when he joined Golden Charter.

He was keen to build an organisation where politics were not a major distraction, expressing frustration that in some roles he previously held such matters could demand half of his time.

That said, the emphasis placed by corporations on cost discipline, driving efficiency and constantly trying to raise standards and achieve consistency are features he has been key to instill at Golden Charter.

Another motivation was geography, and the chance to grow a company in a part of the world known more for downsizing than upscaling in recent decades.

"I've been in Scotland since 1995 and in most of that time you have seen corporates shrink and a lot of head offices close," Mr Wayte said. "So there is huge personal satisfaction in seeing a business grow in scale and particularly on the west coast of Scotland.

"The other bit is just the people. To be in an organisation where you create opportunities for people to take their lives forward is great. We are seeing a lot of young and talented people take on ever-increasing responsibilities, and cope with them."

Golden Charter is owned by an association of independent funeral directors, which has some 700 member companies around the UK. It sells funeral plans on behalf of the members, and returns profits to them on the maturity of those policies.

Consumers buying a plan from Golden Charter can elect to pay the money into the Golden Charter Trust - currently valued at about £500 million - or into a life assurance plan run by the UK's leading providers.

It scored a notable coup earlier this year with the award of a contract from Sun Life, whose over-50s life-assurance plan holders can use Golden Charter to source independent funeral directors when they request a funeral benefit option.

While rivals such as Dignity and the Co-operative Group make money on each plan they sell, Golden Charter sinks everything into the trust.

Mr Wayte explained the company is deliberately set up to not make a profit, but said it would register a £1 million profit this year for the sole reason of "sticking some cash on the balance sheet".

"Other than that it is a very virtuous circle," he said. "Every bit of profit that we make, we will give it back to the shareholders. But we will give it back on the maturity of the funeral plan, so there is always more money to carry out the service for the consumer."

Golden Charter's growth in the last seven years has mirrored the development of the funeral-plan market.

Mr Wayte notes that, while "sub-50,000" plans were sold eight years ago, that number has increased to around 134,000.

"But it's a strange market - you almost have two parallel markets going on at the same time," he explains. "You have got guaranteed over-50s [plans], which is the insurance band that's … fixed monthly payments.

"And about 90 per cent of the people who purchase those believe they are putting money aside for a funeral plan. But it doesn't actually fulfil that need.

"It might actually be a deposit for a funeral, but generally today the average payout on a guaranteed over-50s plan is in the order of £2000.

"The average funeral is about £3500, so you have a significant gap in funding.

"And I think one of the reasons we have seen accelerated growth in the funeral plan market is the movement in the guaranteed over- 50s to the funeral-plan market."

While Golden Charter is winning share from other life assurance options, the funeral-plan sector is still outgunned by those selling guaranteed over 50s plans in marketing terms.

He notes that, while around £50 million is spent annually to raise awareness of the life assurance option, the sum invested in market funeral plans is about £10 million. But the gap is narrowing. Golden Charter adopts a variety of tactics to promote its plans.

It funds 50 per cent of the local marketing spend of the independent funeral directors which ultimately own the company, on things like advertising, leaflet drops and retail point-of-sales materials, and markets its product at bereavement seminars and bowls events.

"We're the biggest sponsor of bowls in the UK, which is pretty much under the radar," Mr Wayte reveals.

Plans are marketed through brokers, solicitors and independent financial advisers (IFAs), and the company invests £3 million to £4m a year on a marketing strategy which takes in advertising, direct mail and online. Up to a quarter of leads now come via the firm's website, Mr Wayte notes.

But the sale of funeral plans is not the only driver of growth for the company.

It is now a significant player in the provision of legal services, covering wills, powers of attorney, asset protection and trusts, and other end-of-life products.

Around 200 of its staff are on the road, selling funeral plans, promoting business-to-business sales and working with funeral directors, while in-house there are staff working in process, IT and estate planning roles.

Golden Charter's growth, which last year saw it outstrip the progress made by its key rivals, is such that it is now in search of bigger premises.

With little room for further expansion in Bearsden, where it occupies a purpose-built office in Canniesburn, it is seeking property in Glasgow city centre with enough space to absorb the projected rise in staff numbers.

"Our most rapid growth is really in sales resource and field sales, telesales," Mr Wayte. "All the operational [roles] are growing but lag that by maybe 25 per cent, so you get some efficiencies as you get scale."

As for customers, Mr Wayte said those who buy funeral plans from Golden Charter broadly fall into two categories.

There are older consumers, aged 71 on average, who buy plans directly from funeral parlours, often prompted by the advance of an illness or the death of a partner.

When it comes to sales prompted through the company's own marketing activities, Mr Wayte notes the average age falls to around 64. Another peak group are people in their mid-40s, who typically buy a plan for a remaining parent or themselves.

While buying a funeral plan will never be anyone's idea of fun, Mr Wayte said there a level of levity has entered the market in the last decade, with people increasingly seeing send-offs as a source of celebration.

"There is an awful lot more humour in discussion about death," Mr Wayte said, noting that "the arrival of the Baby Boomers in the death stats" has brought a "sense of fun and play".

He said: "It's interesting to see the campaigns that are out there.

"A lot of them are now about celebrating life, rather than mourning the passing.

"It's much more light-touch, there's a lot more humour in death and there are a lot more tailored and individual services.

"If you're going to go, it's the final party, isn't it? You want to make it a good one."

As sales pitches go, it's a hard one to argue with.

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