The Big Interview: Sanlam’s chief on why consolidation ‘has to happen’


Sanlam UK chief executive Jonathan Polin is not one to shy away from a challenge. When we met for an early breakfast in the City, he had already been for a vigorous run: training for a bike ride among Sanlam offices to raise money for Cancer Research UK. The 11 offices across Britain mean a 580-mile ride – and before signing up, Polin had not been on a bicycle in years.

The self-discipline might stem from his army background, having enrolled when he finished school. He left in 1991 to join the Pru. Yet Polin is best known for overseeing the turnaround of Ashcourt Rowan and its subsequent sale to Towry.

He recounts his first few days at the advice firm: “On day two we were hit with an S166 and on day three my financial director told me we would be bust by early December.” He quickly got to work, bringing focus to the business and ruthlessly cutting costs.

Polin argues most advice firms are sub-scale lifestyle businesses with limited management capabilities. But he thinks that will change.

“Scale is everything in this game; consolidation has to happen,” he says.

He notes that capital requirements make it ever harder for small advice firms. Having a reasonable digital interface is increasingly important and that is difficult for a small business to build. Among the other factors driving consolidation, he cites a declining appetite to pay for advice, the cost of offering it and the advantage of scale in delivering better outcomes to clients.

Polin expects the industry will split into vertically integrated, major players at one end, and small, highly profitable firms offering a bespoke service to a handful of high-net-worth clients at the other. “The middle will disappear,” he says.

The solution? His vision is clear: “The networks have to migrate to vertically integrated businesses.”

“Scale is everything in this game; consolidation has to happen”

Advice firms acquired

The chief executive also believes more advice firms will be acquired by asset managers. “They need to get back the margin they have lost in the past few years,” he says.

“Only the ones that have scale to build will survive. If I was Aberdeen or Schroders I would look at which businesses were consolidating and consolidating well. I would want to buy those once they had cleaned up their practices.”

Talk turns to the FCA’s asset management market study interim report.

“Asset management margins have been pretty plump for the past few years. When you add the pieces together, you quickly get up to 200 bps. In a low-return environment it is difficult for investors to stomach those fees.”

So what next? “You either use size and scale to drive down asset management fees or produce your own investment management yourself using direct equities.”

I ask if platforms ought to use their scale to negotiate better fees for advisers or to create their own collective investments.

“Platforms have to wake up,” says Polin. “Pricing on platforms will go to zero.” Sanlam is a majority owner of Nucleus, and he acknowledges he and Nucleus boss David Ferguson disagree on that latter point.

“We’re not interested in D2C. We will build a digital interface to allow advisers to deliver their own digital offering.” He adds that Nutmeg has done more than anyone else to wake up the industry to the limitations of a purely digital proposition.

But with low levels of engagement with investments, do intermediated businesses need a good digital interface? “Of course. The cost of face-to-face is too high. You need to be able to act digitally to reduce costs and, most importantly, clients expect it.”

Polin is also passionate about the industry helping clients set goals and tracking performance against them.

“Why benchmark investors against the FTSE?” he asks. “We need to be able to answer people’s questions. How much money do they need to have in their portfolio to get a decent retirement? How do they get there? We plan to benchmark clients against their own financial objectives, not some industry standard that might mean very little to them. And once people retire, we need to tell them how to get their pot to last 20, 30 or 40 years into the future.”

As our plates are cleared, I ask Polin what he would do if he were starting out on his career again. “I’d go East. I wouldn’t stay in the UK or Europe. The East is more dynamic and there is a need for intellectual capital.” It is the flair of an army man talking.

Heather Hopkins is director of research at Platforum


Jonathan Polin 480 profile closer

November 2015 – present: Group chief executive officer, Sanlam UK

September 2015 – present: Chairman, Argonaut Capital Partners

September 2011 – May 2015: Group chief executive, Ashcourt Rowan

October 2004 – July 2011: Sales and marketing director, Ignis Asset Management



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