Sometimes a mistake can turn out for the best, as Richard Rowney knows only too well. Just a few months into the job as chief executive of LV= Rowney is busy building the firm into a challenger brand. He wants it to be known for innovation and its “can do” attitude, alongside the values and standards people associate with retail firm John Lewis. But things could easily have been so different if Rowney had not taken home the wrong job application from his university pigeon hole back in 1992.
He says: “I wanted to take a British Gas overseas application but when I got home I found I’d taken the Barclays one by mistake – and it was the last day of term. I looked at the application and dismissed it as a practice run. I didn’t want to become an accountant.”
Rowney ended up on the graduate training scheme at Barclays and stayed with the firm for 15 years, working in a range of departments. It was during a management programme at Harvard as chief operating officer for premier banking that Rowney started to question his future with it. He resigned the day he got back.
“You rarely get a chance to stand back and think about what you want to do and this was a six-month reflection period. I fell out of love with the culture at Barclays. It had changed; it had lost sight of its values and had become investment banking dominated. As a senior leader you make a decision about if you’re senior enough to change things or whether to move on,” he says.
“There is no point in coming into work to do it grudgingly. I know some people don’t have a choice but I’ve always felt you’ve got to be passionate about it. It doesn’t matter if you’re getting up at 5am if you’re doing something you enjoy.”
“I know what I am not good at so you build a team around you that can cover your blind spots.”
Rowney grew up knowing what hard work means as his parents ran a hotel business. At one point he thought about joining them but also toyed with the idea of becoming a lawyer, then working outdoors.
At Harvard he realised he would not be satisfied until he was the man in charge. “I’ve always known I wanted to ‘run my own train set’. You know inherently. Some people just know they want to run a division or a company,” he says.
Rowney finally got the chance in 2010 as managing director of the life and pension business at LV=. His move to the group from Barclays three years earlier had essentially been a sideways one, made with a view to running one of the business units.
Rowney had no particular expertise in life and pensions at the time but felt confident he could do the role. “I know what I’m not good at so you build a team around you that can cover your blind spots,” he says.
Rowney went on to play a big part in turning around the fortunes of the LV= life and pensions business. A £7m operating loss in 2014 had become a £41m operating profit by 2015. Rowney says the turnaround was driven by commercial leadership that focused on the needs of the customer.
“We championed enhanced annuities as opposed to standard annuities and responded early to the pension freedoms with the fixed-term annuity,” says Rowney.
The launch of the one-year fixed-term annuity in only eight days following the Budget announcement on pension reform is Rowney’s proudest moment. The product was designed to give some breathing space to people who wanted to defer retirement to take advantage of the new freedoms.
“Within two hours we’d created an action plan around what was right for the customer if they wanted to back out of annuitising. Some companies would have forced it through if it was in the pipeline. If we were a big organisation we would have been debating it for 80 days.”
Rowney is passionate about trying to restore consumer confidence in financial services so people know not all firms are trying to rip them off. And trying to do the right thing is paying off.
“Advisers went from thinking of us as a sleepy little mutual on the south coast to a bigger company with ambition. We’ve come in as a leader willing to challenge the status quo and set the bar higher,” he says.
Take robo-advice, for example. Last year LV= invested in robo-advice developer Wealth Wizards, which runs an automated retirement advice service. Rowney says LV= got involved because pension freedoms should be supported by guidance or advice so people do not regret their decisions at retirement.
“The majority of robo-advice is for people who have £5,000 to £10,000 and want investment advice but don’t want to see an adviser. They provide answers about their attitude to risk and a recommendation for an investment fund pops up. I’m not being dismissive of it but that’s not hard to do.
“We went to the other end of the spectrum. We asked ourselves whether we could find a way of lowering the costs to design an advice service for £200 and use technology to replicate what the adviser would do. If you can teach a computer to play chess, you can use it to work through simple pension options.”
Rowney is quick to add that the automated advice service, which is backed up by telephone support, is not being used to compete with living, breathing advisers. Its target market is people with assets of up to £50,000 who would not go to an adviser. But Rowney says advisers are also showing interest in it for their businesses as a way of lowering the cost of providing advice.
“That is how we will close the advice gap: not just selling it directly to clients but selling it to financial advisers; giving it to companies to white label it.”
What’s the best bit of advice you’ve received in your career?
To do a job you are genuinely passionate about and that you enjoy, so that it doesn’t become a chore.
What keeps you awake at night?
Nothing! I sleep like a baby and I’m not a worrier.
What has had the most significant impact on financial advice in the last year?
Robo-advice in all its different forms. Technology and human interaction is shaping the advice sector.
If I was in charge of the FCA for a day I would…
Keep doing the things that encourage innovation in the sector.
Any advice for new advisers?
Don’t see technology or the introduction of new tools as a threat. Embrace it as other industries do to provide a better service for customers and make your business more cost-effective and profitable in the long term.
2016-present: Chief executive, LV=
2010-2016: Managing director, life and pensions, LV=
2007-2010: Group chief operating officer, LV=
1992-2007: Various retail and corporate banking roles at Barclays including chief operating officer for premier banking, integration director and graduate trainee