Andy Warhol inspired the idea that everyone would have their 15 minutes of fame. Over the past year, Red Circle director Darren Cooke has had a taste of how that feels, having been pushed into the media spotlight as the adviser who started the petition to ban pension cold calls.
Cooke had no idea the petition he launched in September would get as big as it did, nor that for the next couple of months he would become the “public face that everyone wanted to talk to”.
“I thought I would get 10,000 signatures and it would do very little,” he says. But the campaign struck a chord within the industry and gathered momentum through social media. It was hailed a success when Chancellor Philip Hammond announced in his first Budget that the Government would ban pensions cold calling.
However, the snap general election led to a pause in the consultation process which would have meant legislation being introduced over the summer. With the general election out of the way, Cooke is confident the process will be back on track, albeit with a three- or four-month delay during which scammers can continue “ripping people off”.
“A ban won’t stop cold calling but it will allow a strong message to be sent that it’s illegal; that these people are breaking UK law and if they’re prepared to do that, what else are they prepared to do? It works as much as an awareness campaign than about anything else.
“That’s why I’ve done the press work: not to raise my profile but to get the message out there. If I go on TV with two, three or four million people watching, hopefully they’ll get the message that if they get a cold call about their pension they should just hang up.”
Cooke accepts he will continue to attract media interest because of his involvement in the campaign but while he is as passionate about the cause as ever, there is a sense he does not want to be defined by it. There are other issues on which he has strong opinions: the power of platforms and back-office systems going forward, for example.
“Platforms and back-office systems will be the ones to rule the world. Back-office systems have expanded their capabilities to advisers and clients. If a client has a pension with ABC, an Isa with XYZ and a legacy product with someone else, are you going to log into three different systems through the product providers? Why would you do that if you can go into a system that has everything in one place? Back-office systems will win over any provider, unless providers say you can access other providers through their system – but I can’t see them doing that.”
Cooke believes the move towards platforms is coming from advisers, not their clients, who are often unaware of their existence until they are told. But some platforms are trying to do too much, he says.
“They are trying to add more bells and whistles to look more attractive to advisers. All I want a platform to do is invest money, hold money, buy and sell funds, with a bit of capital gains tax reporting. I want the basics. I don’t need all the fancy reporting and risk profiles – these do not come cheap.”
Cost was at the heart of industry reaction to news of passive investment business Vanguard’s recent direct to consumer launch in the UK, but Cooke thinks the US firm is not well known enough here to be an instant threat to the status quo.
“If I walked out of the office and asked people on the street what Vanguard is, they wouldn’t know. Vanguard has no brand recognition in the UK so it’s not a threat at the moment. People are not going to be googling Vanguard and saying ‘we should be investing because it’s cheaper’. But that will change.”
Cooke thinks it is the platforms which should be feeling particularly nervous, as people could start questioning what they are doing to justify their extra costs relative to Vanguard.
Cooke joined the industry after seeing an ad placed in his local newspaper by Laurentian Life – a company he was already aware of through a friend of a friend. Two years later he moved to HSBC because, unlike at Laurentian Life where the role was self-employed and commission-based, he would earn a salary and would not need to generate his own clients.
However, 18 years on, HSBC was going down the restricted route and Cooke – who was working as an independent adviser in the commercial side of the business – wanted to stay independent. That led him to form Red Circle in 2012 and the same desire to remain independent was the reason he moved the business from the Positive Solutions network he started out with to direct authorisation in 2015.
“Leaving HSBC to go directly authorised would have been too scary. I needed a halfway house of a network to put an arm around my shoulder, show me what to do and how.“I’d have still been with Positive Solutions now if it had not joined up with Intrinsic. It was starting to push restricted at us and I wanted to escape that noose.”
Cooke considered moving to another network but found they were either restricted, going restricted or unable to guarantee staying independent.
“You always have to accept a network’s way of doing things, their processes, and I never found one that was right that didn’t involve a compromise. The longer it went on, the more apparent it became that going directly authorised and doing it on my
own was the way to go.
“Independent advice is best for the client. If you’re directly authorised you can set your own restrictions but generally speaking restricted networks restrict the products you can sell – and that’s what I ran away from at HSBC.”
What’s the best bit of advice you’ve received in your career?
At HSBC, national sales director Simon Donohoe told us: “If you wouldn’t sell it to your mother, why would you sell it to my clients?” For advisers, then, if you wouldn’t do it for your mother, why do it for your clients?
What’s keeping you awake at night?
My kids – I am a laid-back, sanguine kind of guy.
What has had the most significant impact on financial advice in the last year?
Still the pension freedoms, which have been a disruptor in a good way.
If I was put in charge of the FCA for a day I would…
Combat the scammers.
Advice for new advisers joining the profession?
Get yourself in front of as many people as you can and learn on the job. You cannot learn it in the classroom. Of course you’ve got to get your qualifications but the only way you can do the job is by having conversations with real people.
2012-present: Director, Red Circle Financial Planning
1994-2012: Various roles, including adviser, field sales manager and commercial independent adviser, HSBC
1992-1994: Self-employed sales role, Laurentian Life