Patrick Mill

13 January 2011 | By Natalie Holt

Alliance Trust Savings sales and distribution director Patrick Mill believes the need for financial advice has never been greater than it is today. People are living longer and retirement income may need to last 30 and 40 years now rather than 20. There are also political drivers at work, with the Government keen to see people take responsibility for personal provision.

That is why Mill sees the future of the Alliance Trust Savings business becoming increasingly intermediary-driven over the coming years. He says: “It is not a strategic change for us as we still want to grow our direct business but we are very focused on the intermediary market. At the moment, the business is roughly split with 90 per cent of sales coming from the direct channel and 10 per cent from the intermediary channel. We see that becoming a 50/50 split in three to five years time. We see growth in the direct business but bigger growth in the intermediary business.”

Mill’s upbringing on a farm in Cornwall, three miles from the nearest neighbour, is a far cry from where he finds himself today. He started his career in financial services as a bank clerk at Barclays. “Having been brought up on a farm in Cornwall, banking seemed like the big wide world to me.”

He became branch manager at Barclays before moving to Prudential to be trained as a financial adviser.

He joined Alliance Trust Savings last July following five years as sales director in his second stint at Prudential and after more than 13 years with Bradford & Bingley, where started as a financial consultant and became managing director of the financial services division.

“Going from adviser to sales director in the same organisation is an achievement I am quite proud of - going from being at the coalface to running the sales operation.”

Mill is pragmatic about B&B’s fate as the bank was part-nationalised and its branch network and deposits sold to Santander three years after he left. He feels it is sad on a personal level but says: “B&B did not have a sustainable business model and ultimately that model fell apart. To be fair to the board, I do not think they could not have anticipated what was going to happen in 2008.”

Part of Mill’s six-month due-diligence process before joining Alliance Trust Savings involved a discussion about the status of the company’s full Sipp. The Sipp was reopened to new business in Septem-ber 2009, having been withdrawn in December 2008 to resolve admin concerns.

Mill believes the decision to close the Sipp was a brave one and ultimately the right choice.

“What a number of businesses do when they have a problem is to try and make it better by adding another process or system. What Alliance Trust Savings did was to say we have got some admin issues that need to be addressed. Let’s take ourselves out of new business and get those right, and in a robust way, so that when we open for new business this will never be an issue again.

“It is the golf swing analogy. If you tweak it, it will get slightly better but if you do as Tiger Woods and Nick Faldo did, you stop and recreate your swing because although reasonably successful, you know it cannot take you to where you want to go.”

Alliance Trust Savings has a number of developments in the pipeline to help increase its share of the intermediary market, particularly on its i.nvest platform. It is currently execution-only but the company is looking to take on more business through advisers via its platform over the next few years.

Plans include the addition of foreign equities within the next three months and also the development of adviser tools to help clients build up a retirement income for longer as well as research investment tools.

The i.nvest platform is not directly affected by the FSA’s recent platform consultation paper by virtue of its execution-only status but Mill has been paying close attention to its content for when i.nvest moves into the intermediary sector.

Mill says the FSA’s shift from its initial stance of banning rebates between fund managers to platforms to the more toned-down call for improved disclosure of payments came out of the blue.

“The view the FSA took was right as a purist view and it has met a lot of the regulator’s key RDR objectives. The issue the FSA has now is how workable its latest proposal is.

“The platform reforms are about transparency and ultimately about the end customer understanding who is being paid what and what the value is in that. And I am not sure that is being achieved with what the FSA is currently proposing.”

Mill believes the regulator’s U-turn on fund firm rebates and the alternative proposal to ban cash rebates to investors means the FSA will now be on the receiving end of yet more heavy lobbying from those platforms affected.

“There is still lots of debating to do and I do not think this latest paper will be the end of it. The next platform paper to come out from the FSA could change everything again.”

 

 

 

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