Aegon UK group chief executive David Henderson, or Hendo as he is known to colleagues, is not one to follow the pack. Peers describe him as driven, focused, hard-nosed and even a little rough around the edges. He knows what he wants and believes his strategy will achieve his desired goal of “leaving the company in good shape when I retire”.
Aegon's strategy of buying medium-sized specialist IFA firms goes against the tactics employed by many of its competitors. It bought a 50 per cent share in Wentworth Rose in June, with an option of buying the other 50 per cent, and snapped up Advisory & Brokerage last week.
Rivals have either bought the big IFAs, as with Skandia's purchase of Bankhall or AMP's purchase of Towry Law, or targeted firms at the other end of the scale, with the likes of Norwich Union and Friends Provident buying small stakes in networks and IFAs from Lands End to John O'Groats.
Aegon UK's strategy would have been off the radar a couple of years ago. Henderson says: “In the past, we looked hard at buying IFAs but never found anyone particularly attractive.”
But ever the pragmatist and following the FSA's CP121 proposals, Henderson has changed his tune. He says: “If you look at Aegon worldwide, such as Holland and the US, the group likes to own distribution. To some extent, we were concerned about this as, unlike our competitors, we have no other form of distribution.”
Henderson says he has adopted this strategy because he believes there is a need for independent face-to-face advice and, despite all the upheaval IFAs face, it will be a growing market.
The first phase of Aegon's distribution strategy will be to concentrate on high-quality specialist IFAs, hence the acquisition of Wentworth Rose, with its specialism in the retirement market, and A&B, which does most of its business at the professional end of the market through accountants and solicitors.
Henderson has set a target of acquiring around 10 IFA firms by the end of the year but each will be bought on its financial proposition and quality of its management because they will remain independent of the main group. None of the firms will play a role in Scottish Equitable's bid for market penetration.
“I am not wanting hundreds of firms. Those we buy will grow organically through acquisitions of their own as part of our decentralised approach to management.”
However, Henderson says, as part of the second phase of his strategy, he will look to use some elements of the IFAs collectively to enhance the revenues of the group as a whole although he is not forthcoming on how this will be applied to the IFA firms.
The 57-year-old joined Scottish Equitable's accounts department in 1972 after qualifying as an accountant with a local Edinburgh firm. On his elevation to chief accountant 10 years later, he decided that he wanted to “create figures rather than work with them” and moved across to operations, becoming managing director (life) nine years later. He has since held several senior roles before becoming group chief executive for the newly-established Aegon UK group, the UK holding company of Aegon Asset Management, ScotEq, ScotEq Employee Benefits and ScotEq International.
On wider issues affecting financial services, Henderson is confident that the market will not see wholesale changes immediately following depolarisation. “My understanding is that the original CP121 defined-payment system proposals will be altered in a positive way, meaning the independent sector will retain a larger amount of advisers than first feared.”
However, he warns: “I am not sure how sustainable the sector will be over the longer term as the commercial pull of multi-ties will be attractive for many IFAs although we will not see the predicted scramble for distribution.”
Henderson is a firm believer that if the Government is to achieve its aim of getting more people to save for the future, it will need to revisit the 1 per cent stakeholder price cap. Aegon is lobbying hard through ScotEq to raise the cap, believing that the only way to bridge the savings gap is to re-establish margins on products, making them profitable to manufacture, promote and advise upon.
He warns that, unless the Government gives the industry leeway to make profits for shareholders, many providers will move to a more favourable environment. “The Government needs to understand that capital investment is an international commodity and even UK insurers are now international players, so it needs to create an environment in which they can make profits or we will get to a point where the market will not attract new capital.”
Although evidently a very private man who steers clear of talking about his personal life, preferring to concentrate on how he is going to drive the business forward, those who know Henderson describe him as a friendly guy with a passion for football and golf outside working hours.
Colleagues claim that “Wee Davie” – as an informed insider says he is affectionately known by the driving pool – is extremely supportive and backs staff to the hilt but is not a man to be crossed as he does not suffer fools gladly. Despite a gruff exterior, they say he is always willing to give people a fair crack of the whip but he expects them to deliver.
Henderson hopes his legacy on retirement, when it eventually comes, will be the creation of a management team which will seamlessly be able to continue his strategy.
Born: September 16, 1944 in Edinburgh.
Lives: Edinburgh with wife. Has grown-up son and daughter living in Hampstead, London.
Career: 1969 – qualified as accountant with Edinburgh accountancy firm. 1971 – joined Scottish Equitable's accounting function. 1982 – appointed as chief accountant, followed by a period in charge of operations before appointed as managing director (life and pensions) in 1991. 1993 – managing director of UK operation. 1995 – managing director and deputy chief executive. 1997 – chief executive. 1999 – appointed as group chief executive of Aegon UK from its creation in January 1999. Board member of ABI, chairman of Independent Life Offices Group and chairman of General Purpose Council of Associated Scottish Life Offices.
Career ambition: Unofficially: “To retire before I get fired.” Officially: “To leave the company in good shape on retirement.”
Life ambition: “To give something back to the industry and be involved with it post-retirement.”
Likes: “People who get things done and who are straight-talking. Golf but that's a Scottish thing. Football, especially Heart of Midlothian FC.”
Dislikes: “People who don't get things done and who are not straight-talkers.”
Peers say: “The Aegon strategy starts at the top of the organisation – work hard, make money, enjoy yourself and respect people.”
Car: Mercedes C class.