Sesame may offer discretionary service to advisers
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In his first interview since being appointed chief operating officer of Sesame Bankhall, George Higginson says the firm is busy gearing up to support advisers across the market.
George Higginson: ’We have lost more people in the mortgage market due to the credit crunch than we will lose because of the RDR’
Sesame Bankhall Group is considering developing a discretionary fund management service for its advisers as part of a review to prepare for the RDR.
The company’s new chief operating officer George Higginson took over from Stephen Young on January 4 after a restructure in September that saw Young appointed head of a new unit to deliver the Sesame One platform. Young then announced he was leaving the firm in November.
Higginson, who was formerly a founding director of Intrinsic, says he was brought on board to look at the future of the network and develop it for the RDR.
He says: “We want Sesame Bankhall Group to be a home for all types of distributors, whether they are independent, restricted, mortgage brokers or fit into any other distribution models that emerge. One area we are looking at is discretionary fund management.
“The question is, can we provide a service that delivers wholesale rates and funds, top managers and a proper spread? If we can do that, then we will look to provide a service to members.”
Higginson says SBG has seen strong demand for its IFA school, particularly from the children of practising advisers.
In March, Sesame announced it will launch a school with the aim of bringing new blood into the industry. It plans to get students qualified to QCF level four within two years and is currently in the pilot phase.
Higginson says: “Most recruits are the children of IFAs. If we want to bring new people into the industry, we should first look at the children of IFAs. They already know about regulation and understand the sector.”
Higginson is confident that IFA numbers will only fall by 10 per cent due to the RDR, which he says is close to the current attrition rate anyway.
He says: “We have lost more people in the mortgage market due to the credit crunch than we will lose because of the RDR.”
Higginson is optimistic about the RDR and feels it will bring opportunities for advisers.
He says: “Middle Britain is a fabulous market and there will still be a market there after the RDR. These consumers need protection, particularly income protection and critical-illness cover. There will be tremendous opportunities in this area.”
On December’s RDR Parliamentary debates, Higginson says MPs might succeed in convincing the FSA to “tweak the RDR around the edges” but he does not think it will result in any substantial change.
Higginson says: “The FSA should extend the examination deadline as long as advisers can show they are studying towards QCF level four now.
“We fed that back to the Treasury select committee, along with our views that factoring should be allowed in the regular-premium market, firms should be awarded regulatory dividends and there should be a long stop for adviser complaints.
“But advisers should not expect the RDR will be thrown out and they need to be working towards the deadline.”
On the launch of SBG’s platform, Sesame One, Higginson says the company’s has no target for total funds under management. His main concern is that advisers embed the platform into their business.
He says: “The point is not how much money is on the platform, it is that advisers understand how to use it properly to run their businesses more efficiently and use it as a practical tool to facilitate adviser-charging.”
In August, SBG reported operating profits of £2m for the first six months of 2010 compared with a loss of £2m for the same period last year.
Higginson says he is prepared to see profits fall in order to reinvest in the network.
He says: “We will reinvest in the business to make sure we are the market leader after 2012. You have to reinvest in things such as platforms to grow. For us, it is not about making more profit in the next two years but about reinvesting so we make mega-profits after the RDR.”
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