Brett Williams says he was basically given a clean sheet of paper to establish the Selestia business. The new chief executive of Skandia’s UK Business Unit says without the same burden of legacy business that some traditional UK life and pension companies have to contend with, he had free rein to launch a technology-based platform business.
Having graduated in economics and international politics from Aberystwyth University, Williams found himself falling into the industry by accident.
He says: “Like many people, I just stumbled into financial services. I started out at the training scheme at what was then Hambro Life but there was not much training done. It was more a term used to recruit graduates.”
After 12 years, he moved to M&G, which he says gave him a new perspective, focusing on the investment side of things and adding to his experience in the traditional life and pension arena.
Soon after, he followed Mike Wilson to J Rothschild International and worked with Paul Bradshaw in setting up its Italian office before looking for a new challenge.
He contacted Jim Sutcliffe at Old Mutual and the pair decided to get their heads together and come up with an entirely new proposition.
Williams says the experience of working in a foreign environment taught him the importance of understanding the market you work in and he gets frustrated with the UK’s obsession with all things Australian when it comes to wrap.
He says he did not agree with importing the South African business into the UK because it would not have been successful.
He says: “They are two different markets that need to be met by different types of solutions. I think it might be a sign of desperation, to be honest. I don’t understand it. The markets are totally different. They are in a different space, the tax systems are different, the pace at which the market moves is different. It was clearer when I was in Italy because the language reminds you of that but, Australia, I just don’t get it.”
Williams says the bottom line, often neglected by other players in the industry, is that the end investor does not come to an IFA for a product, he comes to an IFA for a financial solution.
He says: “Different people have different needs. The end consumer does not care about what things are called, whether it is a life and pension company or an asset manager. They care about getting an investment solution to a problem and getting the best tax result in creating that investment solution.
“Jim and I had been talking about it at a high level for some time but what was driving me? I think it was consumer behaviour. Technology had become such an important part of everyday life. Easyjet had just launched and the ease with which travel, shopping and doing everyday tasks using the internet were really starting to take off and has continued. Why should this not apply to financial services?”
Williams says during his 20-odd years working with IFAs he learned that their main gripe was the inability to produce valuations in a way that was cost-effective.
He says: “As it was so expensive to produce valuations, taking a couple of weeks or so until very recently, they could not afford to have this relationship-style model with too many clients.”
He says the opportunity for error was also vast, with the possibility for delay at every stage of the process.
Williams says: “It is just not guaranteed. The postman could have chosen not to deliver that statement on that day, the temporary PA working in the office that day might not be able to get her hands on it – those valuations are just not fixed. Whereas now, they are online all the time and continually and immediate updated.”
Williams says Selestia was in a strong position being a new company without the legacy and says traditional providers would find it very difficult to start from scratch.
He says: “Their systems are built on a product-based rather than clientbased system, which puts a lot of pressure on providers. I think many of them would be better off closing themselves off to new business and starting anew.”
Williams says there is so much money tied up in old with-profits-type policies that the last thing they want to do is risk losing that but the asset reallocation that is carried out is not necessarily in the best interests of the investor.
He says: “It is hard for them. They have to think about the best deal for shareholders and risk assessments are so much more prevalent now then they were before 2001. A lot of change has taken place.”
He says life companies that do not embrace technology and use it in a 21st Century way will not survive.
He says: “We should have predicted this really. If your margins were set in a less transparent world, in order to keep those margins, you have to use technology. If you use it in a 21st Century way, it will be cheap to do but if it is all done by people, it will cost far too much and they cannot expect to survive.”
The plan in his newly combined platform of Selestia Investment Solutions is to continue to increase the functionality and scalability and ensure that they stay ahead of the game.
Williams says: “The IFAs don’t care unless something is wrong or they don’t have it. It is our job to ensure that we stay ahead of the game. They want to know how much they have on the platform, what that means in terms of trail commission, how they report to clients and what information do their clients want.”
He says a cash account is important, as is unbundling of charges, but those are elements that are under development. He says the key financial planning tools such as asset allocation are fundamentals that platforms should be capable of offering, which have become commoditised in their own right.
Williams says: “The plan is to provide extranet-type portfolio management-type tools to scale and keep adding functionality as we go along.”
Lives: Tring, Hertfordshire
Career: 2007-present: CEO, Skandia UK Business Unit; 2006-2007: CEO, Selestia and Skandia MultiFUNDS ltd; 2001-2006: CEO, Selestia; 1998-2001: sales and marketing director, J.Rothschild international; 1993-1998: M&G; 1981-1993: Hambro Life
Likes: Sport, Interesting people, reading, music, creating chance, travel
Dislikes: People who don’t do what they say they will do. Wasting time
Drives: BMW 6 Series
Book: The Kite Runner
Film: The Big Chill
Band: Van Morrison
Life Ambition: To make a positive difference in whatever I do
If I wasn’t doing this I would be… Creating a new business