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TWST: Can we begin with a brief historical sketch of Lighthouse Group (London:LGT.L), bringing us up to date with your position today?

Mr. Streatfield: To give a short profile, Lighthouse was formed in 2000 as a national branded IFA i.e., Independent Financial Advisors, offering services to advisors operating their own practices. The business floated on the Alternative Investment Market in October 2000 and, as far as recent history, in March 2002 Lighthouse acquired Berkeley Wodehouse Associates Ltd and with it 200 further advisors. This was via a reverse takeover. The consideration was £2.4 million, including a small element of debt. In November 2002, Lighthouse acquired the ex Canada Life direct sales force in the UK of around 170 advisors. The consideration for that transaction was an option of over 1 million shares worth nominally £500,000 and exercisable by the end of September, 2003. So, here we are today with a group with approximately 500 independent financial advisors based across the United Kingdom and its business is divided equally between protection investments and pension business. Around 10% of its revenue is generated from fees and we are being further strengthened by investments into our share register by major providers such as Skandia and AEGON. That took place in October and November last year and Friends Provident invested in February this year. These three main providers currently have about 25% of the equity and brought in about £3 million of further capital into the group. Had we been speaking a year ago we would have indicated that we had 100 independent financial advisors in our group. Here we are a year later with 500, so we have moved forward quite considerably.

TWST: Can you comment on the acquisitions in terms of how that growth path strengthens Lighthouse? What was the attraction?

Mr. Streatfield: The attraction to the main acquisition, Berkeley Wodehouse Associates Ltd, was that it brought a regulatory capability which the Lighthouse Group had previously outsourced, so it is very complimentary. It brought with it an in-house regulatory ability that Lighthouse had planned to build. Berkeley Wodehouse was established over 10 years ago and therefore had a proven regulatory structure. It had avoided fines and sanctions from the regulator in a period when very few similar sized firms had managed to avoid it. So, it came with few liabilities as it had, for example, in the main avoided the UK's pensions review and its ethos and culture fitted very well within the group. The Board has gone through several changes to its makeup in the year, which sees Matthew Goldsmith now as Deputy Chairman; David Hickey remains the Chairman in an executive capacity. I was previously the Chief Executive of Berkeley Wodehouse and am now the Chief Executive of the Lighthouse Group; Paivi Grigg is the Group’s Finance Director, previously Financial Director of BWA and our Regulatory Director is Valerie Gaze, who was one of the founders of Berkeley Wodehouse.

TWST: Speaking of regulation, depolarization has been obviously a key issue of late. Can you give a quick backdrop to this and touch on what it means for your company in particular?

Mr. Streatfield: Lighthouse is firmly positioned in the independent financial advisor arena and, hitherto, in the UK you have to declare your status as an independent financial advisor or as a tied agent working solely for one company. The deregulation or depolarization process that is taking place in the UK is clearly making it less onerous for the tied sector. There is not much change for independent financial advisors, but for the tied sector, where they have a gap in their product range, they are able to do a commercial transaction with another provider now and fill that gap with their products. These changes, at their root, give clients of other tied advisors a broader access to products that they wouldn't have got before. So, while there is not an awful lot of change that will affect the existing IFAs in the sector, quite clearly the tied sector gets a boost from these changes.

TWST: What are your key objectives for the next 12 to 24 months? Do you plan on further acquisitions?

Mr. Streatfield: We are not an acquiring company but where we can do more strategic alliances similar to our Canada Life transaction, then we will be alert to those opportunities. The UK is also regulating its mortgage market. In the mortgage arena, there are some 40,000 mortgage advisors who, in the next 18 months, will be brought into Financial Services Authority Regulation. We certainly see ourselves building a mortgage arm to our business and attracting the quality end of these advisors, who will have to seek authorisation as a priority. So, if we have this conversation 12 months from now, I would hope that we have a fairly robust mortgage arm as part of our stable.