Annuity Direct chief executive Bob Bullivant says his 40 years in financial services began because of Labour Prime Minister Harold Wilson.
When I was at school, I decided I was going to go to Sandhurst and join the army but it was 1968 and Wilson announced defence cuts so the headmaster called me into his office and said a career in the army was not a very good idea, with so many redundancies happening.”
Bullivant talked to a family friend who suggested the insurance industry instead of the army, so he wrote to Guardian Assurance and was hired as a trainee.
He took his FCII exams there. “They didn’t really say what would happen if you didn’t take the tests but the threat was always there.”
Bullivant started life as an IFA at Godwins in Birmingham, where he learnt not just the skills but also the ethics of being a good IFA. “I had a great boss called Alan Smith, who was an IFA in the true sense of the word. He taught me an awful lot about ethics and professionalism as well as all the technicalities of the profession.”
These ethics have helped him through his career at various life companies and IFAs as well as a spell as Chartered Insurance Institute deputy director general. “You cannot study the ethics of financial advice. It is something that is trained into you as a result of the culture of the business you work in or as a result of the attitude of the people you work for. That is one of the reasons why I did not enjoy working for large companies. If I do not believe something, I cannot push it. I certainly could not work for one of the monoliths of the industry today because you are told what to think and that might not necessarily conform to my own ethics and my views of what is right.”
Bullivant is also a firm believer in the benefits of good adviser education. He says the Financial Services Skills Council and the FSA are too focused on “rote learning” rather than testing the competence of an adviser. “If I don’t know the answer, it helps me to go and look it up or to think about things a bit more deeply – that is the value of a professional education.”
Bullivant has trained six advisers at Annuity Direct and says he was astounded by the volume of facts that his trainees had to learn to pass their exams. He thinks “open-book” exams would be much more beneficial. “Wouldn’t it be better to test the application of the rules rather than recite them?”
Although keen to fight for better adviser education, it is clear that Bullivant’s real passion lies in annuities. Annuity Direct has become a vocal supporter of the fight to make the open market option the default setting in the annuity process.
Bullivant says: “It is nothing short of a national scandal – life companies are still profiting at the expense of the pensioner and the Treasury in lost tax revenue. Our clients have got an average of 20 per cent more income by shopping around. We think around £60m a year more could be in elderly people’s pockets instead of life insurers’ bank accounts. How much longer can the Government stand by and let this go on? Something has to give.”
He admits that this could be seen as a conflict of interest in as much as the IFA will benefit from the change as well as the client. “Yes, we benefit from Omo being the default but so will an awful lot of pensioners so I am happy with that conflict.”
Bullivant is confident that advisers will be able to handle millions of small pension pots if Omo was the default option once personal accounts are launched and says it is the insurers that are telling the world that they cannot.
“I don’t think the IFA market has yet been given a chance to have a go at proving the Omo can work. If you are an IFA in the market, you are in the market. I am confident that by using technology effectively, IFAs will be able to write funds at a reasonable level.”
Bullivant thinks it is the Association of British Insurers and its members that are propagating the myth that small pension business is untenable for most advisers. “The ABI is trying to hold on to the small business. Is it the biggest hurdle in the way of Omo? I don’t know but I do know that turkeys do not vote for Christmas.”
He believes the Omo is not the only problem facing the pension industry. He is not against the creation of personal accounts but he is worried that there are more fundamental retirement issues that need to be addressed before the national scheme is launched.
“In the last 10 years, we have seen the demise of the defined-benefit scheme, which was not valued because people did not realise just what they were getting, so now the Government is proposing a defined-contribution scheme but how are you going to get people to appreciate DC if they did not appreciate DB and how are you going to convince people to put enough money into a DC scheme to make it worthwhile? It is more fundamental than just creating personal accounts. We need to change the culture and philosophy surrounding pensions.”
To do that, Bullivant says it is going to take a concerted effort by the Government, providers and IFAs to get the message across that people have to help themselves fund their old age.
“It is going to be a long, long slog and unfortunately it may be that a generation has to retire poor before the next generation understands that they have to do something themselves.”
Lives: Isle of Wight and Hertfordshire
Education: King Edward Fiveways school, FCII, APFS, chartered financial planner
Career: 2008-present: chief executive, Annuity Direct; 2004-08: deputy director general, Chartered Insurance Institute; 1999-2004: Britannic Retirement Solutions; 1968-99; various roles at IFA and life companies
Likes: Outdoors, theatre, good food and wine, honest people and spending time with Charliebob, my grandson
Dislikes: Inefficiency that makes for a difficult relationship with some providers, dishonesty and lazy people
Drives: My wife’s Toyota Verso
Book: Birdsong by Sebastian Faulks
Film: Forrest Gump
Album: The Pearl Fishers by Bizet
Career ambition: To see Omo as the default option
Life ambition: Health and happiness for my family
If I wasn’t here I would be…..At sea