Profile: Tony Burdin

Tony Burdin believes a lighter regulatory touch would help smaller, nimble mutuals to flourish.

Mr Burdin has worked in the sector for more than 30 years, so he’s had a ring-side seat during the most turbulent era in the history of financial services. After the ‘shareholder spring’, in which investors finally started to challenge some of the big names in banking to justify their bonuses, a new generation is starting to think about the merits of friendly societies like Sheffield Mutual.

Friendly societies date from a lost age and have a simple premise. They were established by communities who believed that, if a group of people contributed to a mutual fund, they could receive benefits at time of need. Before the welfare state, they saved thousands of people from the workhouse. Today, Mr Burdin believes the Government could do more to help them punch above their weight.

“Regulation is over the top for our size,’’ he said. “We’re subject to the same solvency rules as Aviva and Legal & General, which is madness. But overall, I’m confident about the future. I sense that people are fed up with the behaviour of some banks and want to do business with ethical organisations that share their values and principles.”

Established in the 1890s to help working class Yorkshire people who wanted to scrimp and save, the Sheffield Mutual has sailed on serenely through umpteen financial crises. Today, it’s got 8,000 traditional members, and, if you include child trust funds, total membership tops the 50,000 mark.

“There is massive growth potential,’’ said Mr Burdin. “Over the last 10 years there has been a much bigger spread of members, mainly as a result of support from financial advisers (IFAs).

“Under new FSA rules being introduced next year, commission payments to IFAs will be banned and clients will have to pay fees for advice – so that’s a potential threat to our distribution. However, we’ve plans to donate money to charity in lieu of commission payments and we think that will be attractive to the more community minded IFAs.

“I also worry that less well off people could be priced out of receiving good financial advice, but that’s also an opportunity for us to step in and fill the gap with our simple, straightforward and guaranteed products.”

Born in Sheffield, Mr Burdin secured a job at the Halifax Building Society after completing his A levels in 1980. At the time, the Halifax was the epitome of fiscal prudence.

Mr Burdin said: “A lot of people regretted the fact that the Halifax later demutualised. Everybody seemed to have a mortgage there, and every town had a branch. When I first joined the Halifax there was a big battle between the Halifax and Abbey National for the top spot. As soon as Abbey demutualised, it was inevitable that the Halifax wanted to change towards the mentality of a bank.

“The argument that banks are more efficient than mutuals is a load of rubbish. Well-run mutuals like ourselves have a very efficient business model. The argument behind demutualisation was that the business couldn’t expand without getting hold of share capital. Expanding into other areas was their downfall.”

After moving through a series of administrative, sales and management roles at the Halifax, he joined the Leeds & Holbeck in 1988, another resilient institution. Sixteen years later, after steadily climbing through the ranks to become head of marketing and public relations, he got a chance to head to the Yorkshire coast.

In 2004 he joined Scarborough Building Society as head of retail strategy. Mr Burdin carried out a root and branch review because he wanted to return the building society to its core values. He started a branch expansion programme, and uncluttered the product range.

“Scarborough was seen as a regional building society, with a lot of followers in its East Yorkshire heartland,’’ he recalled. “In the end, events took over and Scarborough decided to buy an offshore bank from Portman Building Society in 2007. The senior figures at the offshore bank in Guernsey decided to leave. A lot of investment was tied up in the offshore business and they needed somebody competent to run it.”

So Mr Burdin moved from Harrogate to St Peter Port in Guernsey, where he became part of a close-knit financial services community.

“All the big investment banks are based there, confined to a few square miles,’’ he said. “You could finish work on Friday and then go for a walk on a cliff path with brilliant scenery.”

He arrived in the Channel Islands in July 2007, a period of calm before the economic storm broke in late 2008. Scarborough’s days of independence were numbered, as it struggled to cope with the fall-out from the collapse of Lehman Brothers.

“The UK business had to merge with Skipton in 2009,’’ said Mr Burdin. “My position in Guernsey became very difficult. Skipton also had a Guernsey operation. Two into one doesn’t go. Then my wife Jenny spotted an advert for a job as chief executive of Sheffield Mutual and she told me, ‘Here’s a job for you’.”

Although he’d spent a working lifetime in the mutual sector, Mr Burdin had to do his homework on friendly societies.

“For most of its history, the friendly society had relied on branches or lodges,’’ he said. “The lodge secretary was responsible for finding members. That form of distribution has fallen away. We will be the first smaller mutual to have a full online policy application. We know that approach will sustain our business and we’re a very low-cost operation (Sheffield Mutual has eight staff). Sheffield Mutual always had an investment bias towards good quality tenanted commercial property. We’re in property for the long term, and are not concerned about short-term fluctuations.

“I have also seen a shift in membership – we have started to attract 30 to 40-year-olds with kids. In the past, members had tended to be over 50.

“We’ve got a broad spectrum of members and we would like to connect more with the local population. That’s the challenge we face.”

In December last year, Conal Gregory, the Yorkshire Post’s personal finance correspondent, praised the “cracking rates” offered by Sheffield Mutual’s Tax-Exempt Savings Plan or TESP. For 10-year TESP policies maturing at the end of the previous year, Sheffield Mutual had paid rates of 12.72 per cent. Mr Burdin is launching an initiative called Mutual Friends in the summer, which will provide cash donations to charities, clubs and community groups in return for new members.

Mr Burdin said: “It’s a win-win situation and is a modern take on the old lodge system. It represents what friendly societies are all about.”

Tony Burdin factfile

Name: Tony Burdin

Title: Chief Executive of Sheffield Mutual

Date of birth: November 23, 1961

Education: Kirk Balk School, Hoyland, Barnsley and the Chartered Institute of Marketing

First job: Supermarket shelf stacker (Saturday job)

Favourite film: The Firm

Last book read: State of Emergency – the way we were – by Dominic Sandbrook

Car driven: Audi

Favourite song: Life on Mars – David Bowie

What I am most proud of: Starting out as a junior clerk and reaching a senior position through my own efforts, while helping others along the way.