Ten years after he set up Positive Solutions, David Harrison is back at the helm of a new business. As founder and managing partner of True Potential, Harrison has stuck with financial services but for the new venture he is moving away from financial advice and towards the IT services that financial advisers use.
Last year, Harrison delayed plans for an early retirement to stay on with Positive Solutions but although he is still chairman of the business, this is only short term and he will be stepping down from PosSol to concentrate on the new venture.
Harrison says: “We believe there is a fantastic opportunity for a company to bring real efficiencies, economy of scale, to the entire distribution sector. There is a definite need for the service and what we wish is to bring a new model to the market to help consumers, distributors and manufacturers.”
The new business has the aim of launching a new platform for IFA businesses – a single piece of software that IFAs can use to run all aspects of their business.
“An electronic business platform is the best description of it. It allows the join of the distributor and a full range of manufacturers. This is unique, and I use unique knowing what unique means, we are the only people who have this system. Right from the client through to the asset manager if you like, we have one end-to-end system. It allows people to submit business, it allows people to run their entire business from one platform.”
True Potential officially launched earlier this year but until now the company has been developing the platform although last week saw the first batch of IFAs go live on the new system. By the end of last week, all 1,600 Positive Solutions partners had gone live on the new system and Harrison says it was the obvious place to start.
“PS would always be the biggest test for us because they are a big firm, with a lot of existing data. It is much more difficult than taking on a firm that is just using paper right now. You have got a clean slate there.”
The decision to start with Positive Solutions will also give True Potential the ability to show that its system works and on a large scale. “The system is there and its working and people can see it work. Often, you see these things and say ‘We think this will work’ – well, we can show it works on a large scale already.”
Starting with such a big project also has the advantage of ensuring True Potential is breaking even from the very beginning.
“It means that True Potential is fully funded,” says Harrison.
The True Potential business model does depend on the numbers of businesses using the True Potential platform. But rather than pay a licensing fee or one-off purchase of the software each business will pay a percentage their turnover to True Potential each year.
Harrison believes one of the key efficiency drivers is the use of support staff. He says the industry average is close to one adviser to one support staff and this is a very inefficient way to work.
“The exact ratio is one adviser to 0.7 support staff so this means is a lot of the income generated is lost due to high overheads. If you look at the Positive Solutions’ situation, the PS system is one support staff to 34 IFAs.”
Although operating in the same area as wraps, Harrison does not agree that True Potential and wrap or fund supermarkets are going to be in competition. Advisers who want to continue to use a wrap will be able to do so but Harrison intends advisers to use the TP system as the main system for their entire business.
“If people want to use a wrap, then they can use a wrap but if you use a wrap it has to talk to the rest of the business, otherwise it becomes another thing to do.
“The facts are that each time you take on a client, there are often many different products with many different tax wrappers and you need something more that just a single provider wrap.”
Harrison believes that technology is the key to success in financial services and believes that advisers are on the cusp of a rapid move towards technology.
Harrison says he has been considering the launch of True Potential for some time but it is only now, with adviser sentiment turning towards the adoption of new technology, that the timing is right for the business launch.
“If we could have done it last year, we would have done it last year.”
The retail distribution review has, Harrison believes, also been fortunate for the timing of the business launch. He will not be drawn on whether the RDR will be a good or a bad thing for advisers but says that many of the points it raises on the inefficiencies of the average IFA business are accurate and IFAs, regardless of the outcome of the RDR, will change the way they run their businesses.
Although Harrison says the Positive Solutions project is the biggest one-off project they will deal with, he has his sights set quite high. There is no set number of firms or IFAs that the business is aiming to have on the new operating system but he has got a general target in mind.
Harrison says: “The latest statistics show there are 14,000 firms registered with the FSA, so that might be a good target.”
Born: Wales, 1950
Education: MBA from Open University Business School
Career: April 2007-to date: True Potential, founder and managing partner; 1997-to date: founder of Positive Solutions, chief executive then executive chairman; 1983-1997: Allied Dunbar (then called Hambro Life) as a sales adviser, later area sales and operations director
Likes: Walking his dogs and exploring new cultures in locations such as Andalucian Spain.
Dislikes: Bad manners, laziness and underhand dealings
Drives: Aston Martin DB9
Book: Too many to list but anything that either challenges me or is brilliantly descriptive of its surroundings
Film: Snatch, Austin Powers: Goldmember
Album: Right now, a plethora of teach yourself Spanish CDs
Career ambition: To realise the vision of True Potential and truly transform the industry through recapturing lost value
Life ambition: Good health for me and my family. To help make a difference with my family’s charitable trust.
If I wasn’t doing this I would be… Attempting to speak Spanish in some of my favourite Andalucian towns