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Richard Denning

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Novia’s operations director knows dedication to client service is key to running a successful platform and now the company has been selected to build two platforms for Aegon it will test its bespoke proposition in the mass market Interview by Rachael Adams

Ask anyone in financial services for a definitive description of a platform and you will often get a long-winded response. Not so with Novia operations director Richard Denning, who says: “A platform is an administrator. We consolidate people’s savings so they can manage their money more efficiently.”

Things could have been very different for Denning, who secured his first job as a clerk at Prudential Assurance purely by chance. “I went to a careers office in Croydon when I was 16. I was toying with the idea of becoming an electrician when I saw an ad for an insurance clerk. I thought it looked well paid, went along to the interview and the rest is history.”

The move from insurance to platforms has worked for Denning. “Throughout my career, I have built things. I built call centres, customer service operations and an actual building, Beacon House. At Selestia and Novia, I built platforms.”

Denning sees Novia as “a natural upgrade” of Selestia. “I was proud of what we built at Selestia, as straight-though processing, but by the end everyone had either gone to Skandia or left. Novia was an opportunity to do something better.”

Remaining in platforms was never a question for Denning. “They move faster. In insurance it takes forever to get things done and the top man changes all the time. It happened to me at Prudential, I started a £16m project and halfway through, our new CEO told me it was the biggest waste of money he had ever seen. Platforms are driven by IFAs and consumers.”

Denning is unshakeable in his belief about what a platform should do. “It is about getting the service right. We see a lot of big insurance companies entering the platform market and focusing on new business but once these businesses are on the platform, they cannot manage simple things such as capital gains tax.

“If providers spent a fraction of the time they spend acquiring new business on servicing ongoing clients it would be a better adviser service.”

Despite experiencing industry scepticism - Denning says rumours of Novia going bust have been so widespread he has to show bank statements to advisers to prove the company’s liquidity - things seem to be on track. Novia services 500 IFA firms and announced it had become a profitable business last month. Denning attributes this success to Novia’s dedication to service. “We make very few errors and we slot into advisers’ processes rather than brainwashing them into sticking to our way of doing things.”

He cites Aegon’s selection of Novia to build two platforms, its At Retirement and Workplace solutions, last month as a key factor in the firm’s profitability but he is keen to point out that servicing one mass-market client will not alter Novia’s bespoke proposition.

“The core business and the Aegon arm are distinct. We do not intend to go completely mass market. Aviva and Aegon share about 60 per cent of the employee benefits market so it is hard for platforms to get into it.”

That is not to say Denning envisages things staying this way. “It is a big-player monopoly at the moment but that will change with auto enrolment. We already have the capability to help advisers ad-minister small group Sipps and we offer big, cheap discretionary managed portfolios. We are well positioned to help advisers make the most of this opportunity.”

Novia’s discretionary managed portfolios will also be an advantage in the trend towards investment outsourcing. “In the past three years, the majority of advisers have moved away from asset-picking models towards using discretionary fund managers. IFAs are diversifying into unfamiliar territories, such as exchange traded funds, and are getting nervous. The cost of professional indemnity is also rising.”

Denning believes regulation is driving outsourcing. “Under the retail distribution review, outsourcing investment will be easier for IFAs in terms of adhering to transparency. It is clear who is getting what share of the fee between the IFA, the platform and the fund manager. Advisers will not pick up the tab.”

The FSA’s delaying of its platform paper could hinder industry growth, according to Denning. “Advisers are looking for solutions to dealing with the RDR and platforms are saying, ’It could be this or that’, so it is hard for them to select a platform. The market could grow a lot faster if the regulator clarified things. Under the RDR, we will need more platforms. Barclays are already building theirs.”

He offers a word of warning to new market entrants, however: “You have to be nimble. Banks and insurers come in and treat platforms like any other project, spending £40m when the likes of Aviva and Axa are spending £400m. It costs a lot to acquire clients in the first place and the return comes from keeping them, which is harder than people think.”

The ferocious pace at which people adopt technology will also challenge platforms, says Denning. “Financial services will have to keep pace with technology. We need to provide portals where people can log on and manage their money remotely. The concept that we are all chained to our desks is dead.”

Born: Croydon, 1970
Lives: Just outside Bath with wife and nine-year-old son
Education: Chislehurst and Sidcup Grammar School
Career: 2008-present: director of operations, Novia; 2007-08: head of UK operations for integrating Selestia and Skandia; 2001-07: head of business support, Selestia; 1990-2001: head of contact centre, Britannic Assurance’s life and pensions business; 1986-90: trainee underwriter then call centre manager, Prudential Assurance
Likes: Working to tight deadlines, developing talented people and travelling
Dislikes: Bureaucracy, indecisive people and companies that charge a fortune for a good service and do not supply it
Drives: BMW X5
Book: Ronnie: The Autobiography by Ronnie Wood
Film: Star Wars Episode IV: A New Hope
Album: Strong Persuader by The Robert Cray Band
Career ambition: To see Novia become all that it can be
Life ambition: To stop work at 50
If I wasn’t doing this I would be…Living in Scottsdale, Arizona, playing golf and relaxing

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