Big Interview with Octopus' Rogerson: I am frustrated by the perception that smaller companies are too risky

Naiveté - that is what Simon Rogerson says is the genuine answer to why he left Mercury Asset Management (later acquired by BlackRock) in 2000, aged just 23 and still on the company's graduate scheme, to set up Octopus alongside colleagues Chris Hulatt and Guy Myles.

"None of us knew any better or what we were doing," he says. "All we knew was that we were working in an industry that was broken and one that nobody trusted, and we wanted to change it."

The trio swapped the high-rise City tower for a shared office above a supermarket in Farringdon, spending the first nine months raising the money to get the company started.

Almost 20 years later, with Rogerson at the helm as CEO and Hulatt responsible for financial strategy (Myles left in 2014), Octopus Group is now home to leading venture capital and energy businesses as well as divisions in healthcare and property, serving over 400,000 customers and managing over £8.3bn.

But its primary service is Octopus Investments, which offers a range of OEIC, savings and tax-efficient investment products. The group works closely with financial advisers, which has in turn helped it to test out new products and understand what investors are looking for.

"We want to be irreplaceable for financial advisers. Financial planning is at the core of this industry," says Rogerson.

"People desperately need financial advice but it is a massively under-served market."

He highlights there are less than 20,000 advisers in the country that look after an average of 100 to 125 clients each, meaning only around two million people are being supported.

"This is not enough so we have spent the last 18 years building close relationships with advisers, understanding their problems and understanding their clients' problems. That is where all of our product innovation comes from and it has so far been successful."

Octopus Investments' forte lies in small-cap investing and supporting start-up and smaller businesses, a sector close to Rogerson's heart given the company's own beginnings.

The company even has its own scheme, 'Octopus Springboard', which is designed to help its employees become entrepreneurs themselves.

Staff can pitch a business idea and if successful, are given a four-month paid sabbatical to get it off the ground.

"If it does not work out, they can return to their old job with an experience that will be phenomenally valuable to the business," Rogerson adds.

"If it does, we have supported yet another start-up and wish them all the best for the future."

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