Bill Vasilieff launched Novia in October last year amid unprecedented turbulence. The month prior to launch had seen events that took everyone by surprise, with huge names like Lehman Brothers and HBOS consigned to history.
It must have been a nerve-wracking time for a start-up to enter the market. Nearly one year on, and with talk of the recovery gathering pace, Vasilieff is sticking to his target of £5bn in assets under management within five years. He says Novia is on track to break into profit in the third quarter of next year.
The platform has just posted a £2.8m net loss, with auditors expressing concern over its future if planned future funding does not materialise, but Vasilieff says this is normal for a start-up that requires heavy up-front investment.
He says the firm has “an irrevocable commitment” from its backers to put up an extra £2m as well as further capital if growth forecasts are not met. He remains proud of the fact that Novia will have got up and running for around £10m, which he argues is minuscule compared with the £100m-plus that most other platform players have spent, not to mention their previous aborted launches.
Vasilieff was one of the co-founders of Old Mutual-owned platform Selestia but when Old Mutual bought Skandia he was unhappy with the direction in which it wanted to take the platform.
He says: “If we had been able to develop Selestia into a full wealth management platform, I would probably still be there but the decision was taken to merge the two businesses and it was not what I wanted to do.”
He left Selestia in 2007 and, following his gardening leave, started seeking funding for a wrap of his own. After securing funding from Future Capital Partners and several individual investors, he set up Novia using technology from Infocomp in February 2008, soft-launching the platform in October last year.
Vasilieff grew up in Scotland with his Scottish mother and Ukrainian father. His father worked for the Forestry Commission after coming to Scotland as a refugee following three years in a forced-labour camp in Germany during the Second World War.
After university, Vasilieff was keen to move to the City and get a white-collar job. He started his career in financial services as an insurance broker. “There was no regulation, so the concept of being an adviser was pretty optional. You were very much a salesman.”
He says regulation has brought about a massive change in culture and a move away from pure sales. “A lot of the cowboys who were in the industry were quickly drummed out.”
He left the broking world to train as an actuary, later moving into marketing and product development. Before Selestia, while at M&G, he helped launch Cofunds as one of the four fund firms that backed the project.
He says advisers were sceptical about the benefits of platforms at the time, having been let down by technology that promised much and delivered so little for decades. “They very much saw technology as something that worked for us, the providers, and not for them, making our lives easier and not theirs, whereas, in fact, it makes everyone’s life easier. The market is completely transformed now and IFAs understand the benefits that a platform can bring.”
At Novia, Vasilieff is working on launching more tools and looking at other product wrappers but he says the cash facility has proved an important feature for IFAs in their fight to safeguard clients. “It offers some attractive rates of interest and also, once the client’s money is on the platform, it is out of sight of the banks who are always trying to poach IFA clients.”
He believes the retail distribution review will play right into his hands. “We are absolutely delighted because we are in the space that the RDR is trying to get to. The fund supermarkets are already looking at how to make the evolution into a wrap because you have to offer transparency over who is charging what, which you do not get in a fund supermarket. It is all mixed up, there are kickbacks from fund managers and you have got to offer a much wider choice.”
Vasilieff believes the FSA needs to clamp down on the re-registration issue. “The big four platforms colluding not to allow re-registration is disgraceful. I think they forget whose money it is - it is the client’s money, not theirs. The freedom to move assets should be absolutely mandatory. It would be easy for the FSA to intervene and tell platforms they have got to allow re-reg off.”
He says lack of transparency has prompted the demise of life offices in both Australia and the UK.
“Australia’s old life company model died off there 10 years before it died off here, for the same sort of reasons. People just did not like the fact they were not quite sure what they had and that there might be some nasty surprise when you came to get your money, like a market value adjustment.”
Vasilieff believes that, within five years, the UK market will evolve to where the Australian market currently stands, with 90 per cent of new assets going on to platforms. He does not believe the UK platform market is overcrowded yet, although he admits it is “starting to get busy”.
Born: Dumfries, 1955
Lives: Bath with wife and two children
Education: Kirkcudbright Academy; University of St Andrews - BSc Maths and Statistics; qualified as member of Faculty of Actuaries in 1986
Career: 2008-present, CEO, Novia; 2001-07, marketing director, Selestia/Skandia; 1993-2001, executive director, M&G; 1988-93, divisional director, Allied Dunbar; 1985-88, product development actuary, Albany Life; 1981-85, trainee actuary, Schroder Life; 1980-81, Scottish Mutual; 1976-80, insurance broker
Likes: Creative and fast-moving working environment
Dislikes: Large, bureaucratic organisations with little care for the end-customer
Drives: BMW X5
Book: Cider With Rosie
Film: The Godfather or Casino Royale, depending on mood
Album: I don’t listen to music much, I prefer silence
Career ambition: To make Novia a leading wealth management platform
Life ambition: A happy and healthy family
If I wasn’t doing this I would be…Retired