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Campbell McPherson: Innovation – the secret to James Hay’s success

James Hay’s modular approach to Sipps is a straightforward way to ensure clarity of product and pricing


Thirty years ago, the James Hay Partnership introduced the first Sipp into the UK. Three decades later the firm has evolved from a single-product new entrant into a retirement wealth planning powerhouse with more than 47,000 clients and £15bn under management.

Last year, its Sipp sales doubled and fund inflows increased by a massive 63 per cent.

So what lies behind its success?

“Two golden rules,” according to James Hay chief executive Alastair Conway, who took the helm in March 2013. “Stick to your knitting” and “an unrelenting focus on improving the customer experience”, he says.

“We are 100 per cent focused on being a platform for retirement wealth planning. No distractions. This clarity allows us to focus our innovation efforts on retirement-based product innovation that advisers and clients want, and to make sure we deliver the sort of personal service and online experience that keep our advisers and clients engaged.”

Keep it simple

In terms of product innovation, James Hay has kept things simple. And simple is good. In 2013 it launched its Modular iSipp, whose innovation lies in its simplicity.

At its core is a low-cost internet-based Sipp offering clients a choice of 2,200 funds, a panel of fixed-term deposit providers and a choice of stockbrokers. This is ideal for the majority of clients while those seeking more can add modules to suit their needs, covering whole-of-market, commercial property and/or special investment.

With much of our industry drowning itself in jargon and acronyms, this modular approach to Sipps is a delightfully simple way to ensure clarity of product and pricing. I love it – and the surge in James Hay Sipp sales since the launch of iSipp shows I am not alone.

And this year James Hay has gone a step further, adding a Modular Isa and Modular GIA to the Modular iSipp, thus rounding its Modular iPlan product range. Because, let’s face it, saving for retirement is not done just through a pension.

Transparent pricing is another key feature of the approach. At the heart of the Modular iPlan is a simple pay-as-you-go pricing policy where the client pays only for what they use, when they use it. 

This should reduce the overall cost of Sipps for those who do not want to use the full range of investment options. James Hay clients also have the flexibility to switch investment modules on or off as their needs change.

In terms of customer experience, the James Hay team took a long, hard look at how its customer service department interacted with both advisers and clients. 

Then it studied in detail what its website was making advisers and clients do – and asked itself why. 

Finally, James Hay restructured the business to ensure that all customer-facing departments worked together for the benefit of those customers.

The website was also revamped to make the online experience far more intuitive;  it can be used with or without advice by the same client. 

“This enables advisers to maintain the relationship with their clients throughout ‘advice intervals’,” says James Hay head of communications Hilary Morrison. 

“Advisers are able to empower their clients to DIY-invest in a controlled environment. Contrary to undermining advisers, we believe it is fundamental to the continuing success of advisers and their businesses as it allows them to have oversight of client transactions in one place and to step in when needed.”

I agree completely with this view. If advisers do not provide their clients with the ability to perform certain functions themselves, the clients will simply do it somewhere else without the advisers’ knowledge. 

An adviser not providing their clients with a DIY capability would be akin to a bank not providing their clients with internet banking. The latter is unimaginable; very soon, the former will be as well.

And it seems advisers love it. Here are just two unsolicited comments from advisers on the new James Hay online experience: 

  • “I am very impressed with your website. It is the best one I use (and I use a lot!).” 
  • “James Hay Online has been life-changing. It makes me hate other websites.”

Of course, the internet is not the final word in customer service. So James Hay also beefed up its technical support unit to make sure a team of highly knowledgeable, experienced financial services professionals were available to answer queries on all areas of tax, trust and pension legislation.

Finally, James Hay took an oft-forgotten but critical step that will drive its innovation for many years: it invested in an innovative “strategy delivery programme” that engaged every senior manager across the organisation. 

James Hay realises creating a culture of collaboration and innovation is crucial if it wants its success to continue.

My bet is it will.

Campbell Macpherson is managing director at Campbell Macpherson & Associates



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