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Entrepreneur looks for Easy pickings in market

Opportunistic self-publicising egomaniacs is one of the kinder criticisms made of those giants of industry known as entrepreneurs.

But some of them have undoubtedly shaken up the shape of the financial services industry over the years.

Consumers love a colour-ful character promising to challenge the sometimes faceless monoliths of the indus-try – and save them money in the process.

The news that Greek tycoon and owner of cut-price airline EasyJet, Stelios Haji-Ioannou, is taking his chances in the realm of the virtual IFA will send another tremor through the established order.

The possibility of Stelios working his bright-orange magic through his Easylife start-up may not be music to the ears of real-life IFAs. They will be wondering just how much influence he will have in the sector over the long term.

Will he cause the seismic shift in attitude that Peter Wood wrought on the motor insurance market with Direct Line? Will he mirror the nation&#39s favourite tycoon, Sir Richard Branson, and the attempt by his Virgin group to muscle in on the financial services sector?

Do these pioneers sustain the market or merely serve to blow the cobwebs off established players, which then copy successful ideas using their mightier financial clout?

EasyJet was established in the UK in 1995. While the concept was rubbished at the time, British Airways was eventually forced to follow with the founding of its low-cost airline, Go.

If Haji-Ioannou applies the Midas touch to the life market with EasyLife, traditional players may find themselves forced into copying his concept.

EasyGroup director of corporate affairs James Rothnie says: “It is a market ripe for competition. What EasyGroup is doing is re-engineering products to reduce the price of goods and services.”

Say the word entrepreneur and most people will think of Virgin emperor Sir Richard Branson grinning from the midst of his latest PR stunt.

Branson entered financial services in 1995 when, according to his website, “There was no doubt there was real need for innovation in an industry which had lost touch with customers&#39 needs.”

Virgin Direct launched with the intention of changing the way people thought about money – an ambitious task even for the man who had already established his own record company and airline.

Branson set out by launching the Virgin growth Pep in 1995, followed by the Virgin personal pension in November 1996. Later, the Virgin One account was promoted as a new way of putting your savings and mortgage in one account, an idea which has since been taken on board by established market players such as Nationwide and Woolwich.

But the jury is out on Branson&#39s long-term future in financial services. A&B managing director Gareth Marr says: “The danger at Virgin is that he sells financial services on his own personality. Everyone knows Stelios is behind the Easy brand but the brand is stronger than the personality. Branson may well fall foul somewhere along the line.”

Another entrepreneur who made an undoubted impact in the IFA market is DBS chairman Ken Davy, who started out as an Abbey Life salesman in 1970 before becoming an intermediary in 1979. In 1983, he founded the DBS network and turned around the fortune of the intermediary channel.

Davy says: “At the time, the regulators, the Government, the research and the commentators all said the IFA sector was doomed. It was clear that the only way to save the sector was to give IFAs the support they needed to provide high quality advice.”

One element common among entrepreneurs is their total conviction in their ability and the venture they are embarked upon. Davy says: “My dogged spirit and persistence kept me going but, more important, I fundamentally believed that the idea was right. It is as simple as that.”

History has borne out that Davy&#39s self-belief was justifiable, with the IFA sector as buoyant as it has ever been.

Another man who turned around the fortunes of a forgotten sector was John Charcol founder John Garfield. He set up Charcol in 1974 at a time when brokers were perceived as a last resort in the mortgage market. Today, introducers are seen as a first port of call for borrowers.

John Charcol commercial director Ian Darby says: “John is a classic entrepreneur, incredibly bright and very hard working. He was also prepared to put his money where his mouth was and stand by his logic.

“In the mid-1980s, if anyone had predicted how the broker market would grow, eyebrows would have been raised. The same would have been said of how Virgin and First Direct rattled long-established players.”

Informed Choice managing director Nick Bamford says: “Competition from entrepreneurial players is a good thing as it forces the pace of change. Whether it is sustainable or not comes down, of course, to cashflow. What you will find with new ventures is a lot of hype but no real profits, at least at the beginning.”


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