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Higginson: Resolution is committed to keeping hold of Sesame

Sesame has played down the suggestion that it is up for sale but says there would be no shortage of potential buyers.

Sesame is owned by Friends Life parent company Resolution which last week announced a restructure which will see Sesame chairman Ivan Martin report to Evelyn Bourke, who will head Friends Life’s closed book. As part of the restructure, a new long-term incentive plan was introduced for Sesame’s senior management.

Sesame chief operating officer George Higginson says: “Nobody signs someone into a six-year capital scheme if they intend to get rid of them tomorrow. I would not have come here if I did not think Resolution was committed to keeping hold of Sesame.

“Resolution owning Friends Life is a positive. It is strong and has lots of money and we have lots of money as a result.”

However, Higginson says conversations he has had recently have convinced him if Resolution did decide to sell the group, there would be no shortage of buyers.
He says: “Over the last couple of weeks, I have had phone calls from people asking me to keep them informed if things change so there would be no shortage of backers to step in.”

Sesame recently announced it had not made a profit in the first half of 2011 after making a £2m profit in the first half of 2010, something Higginson attributes to investment in readying the business for the retail distribution review.

“We are reinvesting now in taking market share with the backing of our parent, building a post-RDR model and looking to make profits three or four years down the line.”

A big focus for Sesame is its Sesame One platform, powered by Axa Elevate, and Higginson says advisers should not be looking at how many platforms they need to use to stay independent but whether to use platforms at all when deciding what is best for certain clients.

The firm announced earlier this year that it would also permit investments on to Ascentric, Aviva, Cofunds, Fidelity and Skandia, which Higginson says were chosen because of their financial strength and commitment to the market.

Following the recently published FSA platform policy statement, Sesame issued a new investment platform process and due diligence guide that aims at making sure platform investments are in line with the RDR.

The network is now ensuring advisers go through the process to determine which clients’ assets are suitable for platforms and has called on the industry to go through the same process.

Another change resulting from the policy statement means Sesame advisers do not have to undertake a platform accreditation and due diligence process before signing up to chosen platforms but relevant advisers will still have to complete the accreditation by its January 1, 2012 deadline.

He says: “There are a lot of people asking if they need to use one or six platforms to remain independent but that is not what the process is really about. It is a question of why you use platforms in the first place as opposed to a packaged product or something else.”

But Higginson has called on the FSA to publish the rules around platforms as soon as possible and end industry uncertainty around a cash rebates ban.
He says: “There comes a point when we need to say, tell us what we need to do and we can get on with it. There are still some areas we need clarification on so we can give advisers a definitive list of tasks.”

Although the firm has invested heavily in projects that will run up to RDR, Higginson has not ruled out further acquisitions. “If the right opportunity came along, we would not rule it out and we have the backing there to keep that option open,” he says.

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. Sesame reporting to the closed book division of FP? That means selling to FP orphan clients, via tied direct sales force.

  2. George Higginson is a highly credible individual and I have no doubt the Group is in good hands ….. with or without Resolution.

  3. It said in the printed paper they have a new investment platform process and due diligence guide.

    They said the called for the industry to go through the same process.

    Why they don’t publish their document on their website ?

  4. This isn’t credible. The investors who have supported Resolution over the years have not done so to see their capital invested in an IFA service provider. Probably fair to say that the amount of money they would get either way is immaterial so not even worth considering

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