Split decision as Moore moves on

There was a changing of the guard at Perth’s largest stockbroking firm this week. Mark Beyer spoke to the main players at Hartleys.

TIM Moore and his detractors are still world’s apart.

Mr Moore, who resigned as Hartleys CEO this week after 10 action-packed years, has lost none of his upbeat self-confidence.

“I pride myself on having enjoyed my time there,” he said. “I think it’s a great business. I remain convinced it will work out well.”

For Mr Moore’s detractors, who have watched Hartleys rack up big losses over the past two years, the most common reaction to his resignation was: “I can’t believe it took so long.”

Chairman Peter Mansell, who joined the Hartleys board just over 12 months ago, remained unflinchingly supportive.

“Tim has been a great visionary,” Mr Mansell said.

“Hartleys has made great progress under Mr Moore’s direction. It has grown from a traditional regional stockbroking firm to a significant, financially strong wealth management and technology business with a national presence.”

Mr Moore was more blunt in his description of the ‘old’ Hartleys.

“It was a small, backwater retail broking business when I walked in the door in ’93,” he said.

That description is galling to the many people who remember Hartleys as the pre-eminent stockbroking business in Perth in the mid-1990s.

Critics of Mr Moore say he was too focused on rapid national growth of the broking business and on the JDV technology business, at the expense of quality control and to the detriment of the core broking business in Perth.

Hartleys still has Perth’s largest dealing desk, but in areas such as capital raisings, research and institutional sales it has lost its lead.

Mr Moore remains focused on the positives. He said that of Hartleys’ three divisions, corporate finance and JDV were both profitable, while wealth management was losing money because of the cyclical downturn.

“Almost every broker in the industry is losing dollars,” he said.

Mr Moore denied market talk that JDV’s earnings were massaged by apportioning costs to other parts of the company.

He also dismissed suggestions his resignation was forced by pressure from a group of investment advisers.

Instead, he and Mr Mansell collectively formed the view that it was time for a new person with a fresh perspective to take the helm.

AlintaGas chairman and former Westpac State manager Tony Howarth has taken on the role of interim chief executive.

“My role is to restore the profitability of the business, work with the board to assess strategic options, and after that to assist in the recruitment of a new chief executive,” Mr Howarth said.

He has been an influential behind-the-scenes figure, having introduced Hartleys to Westpac in June 2001. He was also instrumental in persuading Mr Mansell to become chairman.

Mr Howarth’s appointment is widely seen as a salve to Westpac, which is sitting on a big loss after acquiring a 28 per cent stake in Hartleys. It is now Hartleys’ equal largest shareholder with Royal Bank of Canada.

However, Mr Howarth played down the Westpac connection.

“I am definitely not here as a representative of Westpac. I was appointed by the board but with the support of both major shareholders,” he said.

The future of Hartleys may be decided next month when its board holds its annual strategic review.

Mr Mansell said the review would canvass all options, yet he was defensive of the existing business.

“JDV is part of Hartleys”, was his response to suggestions the JDV business may be offloaded.

He also claimed a return to a traditional broking model was “not a tenable position” in a globalised world.

Mr Moore said there were two key reasons for the success of JDV, in contrast to loss-making online brokers like Sanford and E*Trade.

First, JDV’s business model, essentially as a back-end wholesaler, meant it did not face the big cost of building a retail brand.

Second, JDV had diversified beyond online share trading to portfolio management, tax reporting and margin lending.

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