HAVING already taken on additional shareholders, selling a 29 per cent stake, Stocks and Securities Limited will look a lot less like a family company when it doubles the size of its board to include mostly independent directors by year-end.

Last December, John Greaves bought 20 per cent of the ordinary shares in the firm and just last month another nine per cent was sold to a group of minority shareholders for US$900,000 ($95 million) — placing the value of the company at US$10 million.

“We took a decision to broaden our shareholder base late last year,” said Stocks and Securities CEO Mark Croskery. It’s a part of an executive corporate strategic plan to transition from a family business.

“Over the past few years, we have built out an organisation garnered towards corporate governance with our management team and executive,” he added.

The company plans to add four independent directors to the board — which currently includes one independent director, chartered surveyor Gordon Langford — to increase the total number to eight by the end of 2013.

“The focus is on improving operational risk management and corporate governance,” said Croskery. “As we transition from advisory business, it’s good that we are managing 5,000 customers… good that we are managing $19 billion and its less administrative driven, but there are new risks.” Chief among them is how the company and its advisors determine the risk tolerance of its investors.

Stocks and Securities transferred the final tranche of its repos to JN Fund Managers effective November 2, so it is now effectively a full-fledged advisory business.

The focus now is to seek new business with a new unit of financial advisors, who, much like insurance agents, will operate on a commission and travel to meet with clients.

“Ryan Strachan, who is the manager for corporate solutions and wealth management, will manage and build out this team under a different model with a whole new unit under an attractive average fixed cost to us,” said Croskery.

For some time, the company had moved away from servicing strictly high net worth clients to a wider pool of investors with average-sized portfolios, allowing Stocks and Securities to expand its client base substantially.

“Somebody could start with $25,000, which is effective to start a JSE portfolio, and some things for minors we start even lower,” said the financial advisory’s CEO.