After two successful decades building and growing retail financial services companies, Tomas Carruthers' determination to blaze a trail in the sector seems stronger than ever. In his latest role, he is committed to delivering not only great returns for investors, but a positive social impact, too.
In December 2013, Tomas became Chief Executive Officer of the
Social Stock Exchange (SSX), launched in June that year to help businesses that deliver a social or environmental impact to unlock capital at scale.
The Exchange is thriving, with its 12 member companies collectively adding £115m worth of shareholder value over the 12 months to October 2014.
The SSX is now set to go live as a formal exchange in the spring. It will also host a secondary market allowing investors to trade holdings, and a crowdfunding platform that Tomas says will make investing for impact accessible to all. "The SSX idea is that everyone is capable of being an impact investor," emphasises Tomas. "It's not just for rich people."
"You have to have a consistent focus on why you're doing something"The Exchange is also partnering with local government stakeholders nationwide to help create locally driven marketplaces. "We think it's very 19th century to have businesses coming to London for money."
He feels that impact investment can help repair the financial services sector's battered image. "I do think the SSX has come at the right time."
Impact investing, he adds, should be of huge interest to wealth managers. "At a time when a lot of wealth managers are concerned about the rise of trackers and passive funds, this is a big opportunity for them to be active advisers," says Tomas. "People will be asking their advisers: 'Will my investment have a positive social impact?'" It's not just younger investors that are concerned about the social impact of investment, he emphasises. While older investors might be less likely to raise the issue, many will expect their wealth managers to consider it when offering advice.
A growing number of asset managers are signing up to the United Nations-supported
Principles for Responsible Investment, while a
report by the Social Impact Investment Taskforce suggests the market could quickly grow to be worth $1tn.
Industry first
Through its online portal, the SSX gives member companies the opportunity to prove their positive impact. Embracing new technology to deliver financial services is nothing new to Tomas. He saw the future quicker than others in 1994 when, as one of the founders and directors of ESI - the UK subsidiary of E*Trade - he launched the first website to carry share prices.
£115m
Shareholder value generated by the Social Stock Exchange's 12 member companies
$1tn
What the impact investment market could soon be worth*
* Source: Social Impact Investment Taskforce
"The advent of the internet gave me the opportunity to do it, and from there, I went on to build the first active online broker service in 1995," recalls Tomas, although he adds modestly that neither venture was part of a grand plan. "We just reacted to what we thought the market needed at the time."
His success in creating groundbreaking financial services led to him being awarded the Freedom of the City of London in 1998.
Tomas then founded Interactive Markets, and also established a solutions business delivering internet services for fund managers and life offices, merging it with an information portal, iii, and becoming CEO of Interactive Investor. He floated Interactive in February 2000 and it was subsequently acquired by AMP. He then joined AMP International & Technology Holdings Ltd as a director.
In 2013, his ability to anticipate market needs won him the Which? Award for Best Online Stockbroker during his second spell at Interactive Investor. "We introduced a flat-fee charging model that anticipated the Retail Distribution Review by six months," he explains.
Driven to innovate
The ability to innovate requires a sense of purpose as much as inspiration, reckons Tomas. "You have to have a consistent focus on why you're doing something, and why I do this is because people need more help than ever to manage their financial affairs. If you believe in that, you're always going to be interested in changes to technology, regulation and market practice. The question is, working out what's possible that wasn't possible before."
His interest in financial services was piqued at an early age. "I put it down to my father. He was an active investor in the market, so I grew up with the idea that trading stocks and shares was completely normal," says Tomas. "I was even taken on to the floor of the old Newcastle Stock Exchange on Pilgrim Street, which in retrospect was not exactly your normal childhood experience!"
Sense of charity
Tomas has four children of his own and loves spending time with them when he is not working. He is also passionate about the work he does with a number of charities. He was the first ambassador for Home-Start, one of the UK's leading family support charities. "They do amazing work," says Tomas, who is also involved with the Institute for War and Peace Reporting. "It is important that news is still going out from war zones."
He has also set up a bursary to help students attending his alma mater, Jesus College, Cambridge, pay for their studies. Tomas, who attended Royal Grammar School in Newcastle, says: "I'm from the North of England and it's great to be able to support students from the region."
Who knows - perhaps one or two of them will follow in Tomas's footsteps and enjoy an illustrious career as a financial services innovator.