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Colin Lawson

Equilibrium’s managing partner is convinced the future of the intermediary industry lies with technology and the company’s modern approach to advice has already put it ahead, with the firm a runner-up at the Money Marketing awards in the small company IFA of the year category.

Equilibrium Asset Management managing partner Colin Lawson is forthright about why he got into financial advising. “I was on a youth training programme with the Automobile Association and the offices of Norwich Union were next door. The consultants had nice cars and seemed to spend a lot of time out for lunch, so I decided that was a more attractive proposition,” he says.

Twenty-three years later, Lawson is managing partner of an adviser firm with average assets of £450,000 per client. After working at NU and Britannia Life, he set up financial planning and investment management company Applewood (now Equilibrium). He says: “I had seen the whole spectrum of IFAs and concluded if they could be that successful doing something so badly, it cannot be difficult.”

Not long after setting up Applewood, Lawson had a wake-up call that was to pave the way for its evolution into Equilibrium. “We spent two years trying to sell policies to people who needed them but did not want to pay for them. People do not want to take out life insurance, they want to enjoy themselves. I came up with the simple criteria that I wanted to see people who were rich, so they were capable of making a decision, and I wanted a regular stream of clients. That flagged up the retirement market.”

In 2009, the company dropped its IFA label and commission-based charging structure. “We were affiliated with two other businesses, Applewood Independent and Applewood Associates but as we were moving to a pure fee, discretionary management model, we decided to take the opportunity to say to our clients, this is our new company.”

The overhaul incurred costs of between £600,000 and £1m but it has paid off. “As we are growing, the portfolio size we are attracting is getting bigger. I manage about £75m of assets at the moment but I am happy to advise clients with pots of £50,000 or those who will be at that stage in two or three years time.”
Lawson and Equilibrium’s two other advisers are well supported, each assigned a team of five paraplanners who sit in on all client meetings. “It is an unusual structure but the use of paraplanners will increase as the retail distribution review approaches. Advisers are going to have to become more efficient, whether that means having people in-house or outsourcing. I believe using paraplanners is the best route for the industry but first the gap between adviser and paraplanner pay needs to narrow.”

At Equilibrium, the paraplanners are the most qualified employees, although Lawson says this will change after the RDR. “I have got one more exam to do myself and have chosen financial regulation. I figured it would be useful to know something about that area.”

In general, Lawson does not think the RDR goes far enough. “The FSA was aiming to remove bias and the biggest level of bias it saw was in terms of commission but you have still got bias in terms of charging for fund switching. It is a way of being paid to move money from A to B and I think we should be paid to manage money, not move it. All the RDR is doing is swapping one level of bias for another.”

Lawson also believes the RDR may not deliver the renewed trust that the financial services industry is hoping for. “The IFA industry is still completely lacking in focus. You have still got a number of one-man bands, whose fees vary depending on which adviser a client sees but you should get the same standard of product at the same cost. When you go to Tesco, you pay exactly the same for your food regardless of which checkout you go to. There is a disjointed model and the RDR will confuse things even more.”

But that does not mean Lawson sees no hope for the industry. “Technology is the only way forward. Wraps and platforms are the best way to manage client assets and they are the only way IFAs can get through what the regulation is going to bring. I see all IFAs outsourcing investment to wraps after 2012.”

Equilibrium has already taken that step. At present, it has £120m on Nucleus, £12m on 7IM and between £30m and £40m still to move. Lawson has also signed an agreement with Praemium to try out its wrap platform. “The way the industry uses technology is archaic. Our aim this year is to find a new back office. We have been sitting on the fence until now because the choice is going to improve but I think we might need to create our own system.”

Working on an efficient back-office system is just one of Lawson’s aims for Equilibrium this year. “We have focus on intergenerational planning. It is about getting families to sit down and have an honest conversation about money. We are rubbish at that in the UK. Parents do not want to tell their children what they have and children, even when they are faced with the parent trying to talk about it, say, don’t worry about me, spend it on yourself. We want people to think about giving money away more and not be stuck with a load of tax.”

Lawson also wants the firm to make £27m in new asset wins for 2011 and is already ahead of target. His main aim, however, is to clarify how Equilibrium communicates with its marketplace through professional connections, a PR push and increasing the number of seminars. “We are doing 12 seminars a year as opposed to the four we did before. It is a new development but it is going ridiculously well as we are targeting new clients and also inviting existing ones. We want to be the intelligent alternative to banks and stockbrokers by 2012.”

Born: 1969 in Stretford, Manchester
Lives: Macclesfield with his wife Paula
Education: One O-level
Career: 1995-present: managing partner of Applewood (later Equilibrium); 1991-95: broker consultant at Britannia Life; 1988-91: pension administrator at Norwich Union; 1986-88: Automobile Association Youth Training Scheme
Likes: New things, being challenged, Jack Daniel’s
Dislikes: Mushrooms, 50 per cent tax, boredom
Drives: Everyone crazy
Book: What You See Is What You Get by Alan Sugar
Film: Rocky III
Album: I’m taking the fifth amendment
Career ambition: Achieve £2bn of assets through excellence
Life ambition: Make £100m and then give it all away
If I wasn’t doing this I would be…A Grand Prix driver


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