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EY’s Malcolm Kerr on disruptors and threats in retirement advice


EY senior adviser Malcolm Kerr shares a revelation that will make him the envy of most in the industry: in his 15 years as a consultant he has seldom been stressed.

He says: “If you are running a business, it is very easy to get stressed because there is no one to look at other than your face in the mirror.

“In consulting, you are usually with a team. Whether that team is large or small, you have got colleagues who have been there, seen it and done it. It is high pressure, low stress.”

Kerr, whose semi-retirement now enables him to work the equivalent of three days a month for EY, first moved into consulting at big-four firm KPMG after 30 years in the life insurance sector.

He admits the shift from insurer to professional services firm was not always easy but says he has enjoyed the last 15 years of his career more than the first 30.

“You move from managing people, making decisions, reviewing things, chairing committees and all that goes with being on the board of an insurance company with a PA sitting outside the office, to an open plan arrangement, hot-desking and having to grow a business, essentially.

“It was very challenging. A lot of people find it impossible to make that move. Organisations like KPMG and EY are geared up to recruit graduates but for those coming in at a senior level, generally speaking, you have to be pretty self-motivated.”

Kerr identifies some similarities between professional services firms and financial advice businesses.

“In a way, the professional service EY delivers to corporations is a very similar model to the way most advisers deliver professional services to their clients. Every client is different, which is what makes it interesting.”

That is not to say there have not been challenging projects, however. Kerr cites one particularly difficult contract helping a major bank understand the implications of the RDR.

“The culture of the bank was very aggressive and they felt the rules did not apply to them. So it was very difficult to persuade them they had to create a model that is compliant with the RDR and that life is no longer about selling products.

If you are running a business, it is very easy to get stressed because there is no one to look at other than your face in the mirror

“We had pushbacks at a very senior level from people who felt we were being pedantic.”

In the end, the bank decided it could no longer operate in the advice market, which led to redundancies.

But even in those difficult times, Kerr identifies a positive about working for a large professional organisation.

“What is wonderful about EY is that when you encounter problems, people rush to help you, as opposed to some businesses where people run away from the problem because they don’t want to be tarnished by it.”

While the RDR presented one of the most challenging moments to date in Kerr’s consulting career, it has also signified some of the most satisfying.

“Some of the RDR projects we have worked on, where organisations have moved from being product-oriented to advice-oriented, have been very rewarding.

“A lot of the rewards come with the internal team because you are working with people, having fun and learning a lot. You know you are doing a good job. In consulting, you learn a huge amount all the time.”

Kerr recognised the projects he worked on after the RDR changing as businesses started to consider their strategies in light of the new rules. So what next for those strategies?

“A lot of organisations are still thinking through what the future looks like, as you have got disruption, whether that be digital disruption or that caused by large intermediaries deciding to build their own platforms.

“It is leaving institutions thinking quite hard about how to defend themselves on the one hand and become a disruptor themselves on the other.”

One particular disruptive force Kerr predicts will impact the advice market is the arrival of well-known brands in the retirement advice sector.

He views the UK marketplace as being incredibly attractive, with people aged between 50 and 70 having around £1trn of investable assets.

“A lot of people aged between 50 and 70 need and want advice on what they are going to do in a complicated world of pensions and retirement income.

“The clients that used to retire, buy an annuity and disappear are clients that now need help for another 20 years. That extends the relationship of an intermediary or asset manager for another two decades, which is hugely attractive.

“One of the threats might be that major brands – be it a consumer or financial services brand – could decide to invest in becoming the place to go for retirement advice. But that will take a long time to develop.”

Kerr identifies the shorter-term challenges for advisers as running a business cost-effectively and navigating conduct risk issues. And what about others in the retail investment sector?

“Asset managers are looking at the FCA’s consultation and whether that will mean more transparency of charges.

“For insurance companies, they are seeing pressures with much less annuity business, concerns about their legacy books and their charges on there, as well as seeing platform profitability take a long time to be created.”

So it is fair to assume there will be plenty of upcoming work for consultants, even though Kerr is realistic about how they are sometimes perceived.

“There is a healthy scepticism towards the use of consultants. I don’t know clients that wake up in the morning when they are doing their budgets and increase the share for consultancy.

“But the reason I am doing it is because I find it intriguing and rewarding, and I love working with a diverse group of people.”

Five questions

What’s the best bit of advice you’ve received in your career?

Culture eats strategy for breakfast.

What keeps you awake at night?

Happily, nothing at all.

What has had the most significant impact on financial advice in the past year?

Failure of robo-advice to gain significant traction.

If I was in charge of the FCA for a day, I would… 

Set up a panel of advisers to gain insights from the coalface.

Any advice for new advisers? 

Work with the right clients and build great relationships by always doing the right thing.


2004-present: Executive director, now senior adviser, EY UK Financial Services

1998-2004: Director, UK financial services, KPMG Consulting

1996-98: Executive chairman, Canada Life International

1990-96: Vice president, MetLife New York, then main board director, MetLife UK

1981-90: Sales and marketing director, Albany Life

1979-81: Managing director, Julian Gibbs Associates

1976-79: Marketing manager, Property Growth Assurance

1974-76: New business manager, Bevington Lowndes Financial Services

1970-74: Graduate trainee, International Life Insurance


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There is one comment at the moment, we would love to hear your opinion too.

  1. These words from a ‘guru’? Stress is what keeps you on your toes. Being pressured means you are stressed if you have any real commitment. Life would be so boring and mundane without it. Of course there are degrees of stress and too much is just as bad as not enough.

    “If you are running a business, …… there is no one to look at other than your face in the mirror”.
    That is one of the greatest advantages. Not all of us want to work in a large firm. Indeed that’s why so many IFA firms are small. Indeed in any business the biggest problem is usually a staff problem. There are those who prefer and are comfortable with actually leading.

    “What is wonderful about EY is that when you encounter problems, people rush to help you”
    Yes, that’s wonderful for those without the confidence, self-belief or ability to sort things out for themselves and one of the main reasons why large firms are so much more unwieldy than little ones.

    I have had personal insight into the largest of organisations and it seems that the first thing graduates learn is to avoid making decisions, for fear of being wrong. Practically everything is done by committee. The definition escapes many: A committee is a cul-de-sac down which ideas are lured and quietly strangled

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