James Hay chief executive Alastair Conway says he has never worked in financial services without an underlying level of fear operating in the sector. You wonder then how he has chalked up more than 25 years in the industry.
But Conway, a former IFA, likes a challenge and credits today’s advisers with the same resilience, particularly when dealing with regulatory changes like those delivered by the RDR.
One year on from the RDR and 11 months in his present role, Conway says he is not surprised that the doomsday prediction of advisers deserting the industry en masse failed to materialise.
“The reason why there was no danger of too many IFAs leaving the business is the dependency that clients have on their advisers. Good advisers are resilient as they have a bond with their clients and that is not going to change because the regulator is advocating a new set of principles,” he says. “The RDR has made advisers realise how valuable they are to the end-customer. Clients haven’t reacted badly to paying fees for advice.”
Conway believes the original aim of the RDR – to break the link between products and payment for advice – has been achieved. But because the RDR was broadened from its initial brief, he thinks it is too early to tell how successful it has been as a whole. “It will be another two to three years before we become clear on it. I think the FCA wants to reflect and understand before making further adjustments,” he says.
An area yet to be addressed, Conway believes, is the provision of financial advice for people who cannot afford fees. He says servicing the mass market is problematic because the lines between advice, guidance and product transactions can become blurred. In the platform market, he believes the move away from rebates towards platform charges will be painful for some.
The firm launched a new product, the modular i-Sipp, within two weeks of the RDR’s implementation.
“Historically, some Sipps have a different system and you pay for them as though you are going to use all the features. With the modular i-Sipp, if you don’t need an investment module any longer, you can turn it off.
“To get a new product out so early in 2013 was almost unheard of,” he says.
Conway says this would not have been possible without the overhaul of products and service levels made when James Hay, previously owned by Santander, became part of the IFG Group in 2010.
“In 2010 we drove up our products and service. Without having done that, it would have been impossible to get the product out. Any adviser would say there has been a massive change in terms of the service experienced.”
The response to the new modular Sipp bears out the improvement in service offered to advisers, Conway says.
“Compared with 12 months ago, we have seen phenomenal growth and we’ve had positive feedback on our service. Those organisations which have used us previously have heard things have got better and are keen to use us again.”
When he was a young man, Conway had no great desire to work in financial services. He had wanted to become a professional golfer but says he realised he was not good enough.
After leaving college, he survived four years in hotel management – “the most difficult and stressful industry you could imagine” – before switching to financial services. His link to the industry came through his father, an accountant, who introduced Conway to discretionary IFA firm Radford Smith.
“I joined on Black Monday in 1987. I got in to the office and found that nobody was answering the phones,” he says.
Working his way up over the next three years, Conway came to understand the value that advisers offer to clients. He decided initially to build up his own IFA business but later took a job with Sesame when he realised he preferred running a business to advising clients.
“I had four large customers and I had stopped enjoying the advice side. Most advisers are motivated by helping people; if you lose that, you lose something that’s important in your relationship with clients,” he says.
“I wanted to affect the industry more generally. I understood the dynamics of advice and I wanted to do that on a larger scale. Sesame was an interesting place to go. I enjoyed the commercial proposition role there but I realised I needed the right environment for the long term.”
After a brief spell at Zurich International, Conway joined Cofunds, a firm for which he still has huge affection.
“It experienced phenomenal growth from 2008 to the day I left; from £13bn to £50bn almost on the day I left. It had massive momentum and diversified itself in being able to both transact with small IFAs and take on institutional business. It adapted to the market, gained momentum and developed in size and entrepreneurial spirit.
“But the challenge it was grappling with was where to go next. It had been going for 12 years and the ownership structure was going to get resolved at some point. A lot of individuals who represented the owners had changed slightly in terms of culture and approach.”
Conway believes current Cofunds owner Legal & General is facing the same issues. “I hope it goes on to be a success,” he says.
James Hay is beginning the new year as it did the last – bringing a new product to market. Conway says this one will provide access to collectives as a complement to the firm’s existing Sipp and Isa wrappers. “We are making sure our product set and the platform underneath it are meeting clients’ needs,” he says.
Born: Surrey, 1965
Lives: Guildford, Surrey
Education: Schools and college in Surrey
Career: 2013-present: chief executive, James Hay; 2008-13: sales and marketing director, Cofunds; 2007-08: consulting at Zurich International; 2005-06: head of proposition and commercial development, Sesame; 2001/04: chief executive, The Clear Group; 1990s: building the business that evolved into The Clear Group; 1987-90: IFA Radford Smith
Likes: Building and developing businesses and the people who make them, skiing, golf and supporting Leeds United
Dislikes: Negativity, duplicity
Drives: Range Rover
Book: The Kite Runner by Khaled Hosseini
Film: The Shawshank Redemption
Album: System by Seal
Career ambition: To achieve everything I am capable of
Life ambition: To be a good dad
If I wasn’t doing this I would be…Something connected with professional sport