Delving into John Simmonds’ career is almost like excavating the financial services industry. Many of the firms the Blevins Franks chief executive has worked for have been built through complex layers of acquisitions and rebranding.
Look at Simmonds’ CV and you come across companies like Bluefin: a national financial planning business created by Axa from various acquisitions. Axa could not make it work so Bluefin was offloaded in parts to Capita in 2012 and Towry in 2013.
Dig further into Simmonds’ past and you find firms like Target Life that no longer exist because they have been swallowed up by other firms, which have themselves been sold on. And so the corporate food chain goes on, seemingly in perpetuity.
In Simmonds’ view, though, does it matter to the end consumer who buys who? “It depends on why the buyer is buying. Is there a cost synergy or are they buying a company because it does something different to their own business? It’s important to understand what you are buying and why you are buying it,” he says.
Simmonds joined Blevins Franks, which provides tax advice and wealth management to UK expats in Europe, in 2013. The following year it bought French advice firm Siddalls. “Siddalls had not been supported. It didn’t have technical support and marketing and that was a shame. Clients have benefited from the acquisition and we know that because they have said that they get a better service now. Can the buyer add value to the business they are buying? They could destroy it if the company is too different.”
Years ago Simmonds would not have bothered so much about whether the people would fit together when contemplating an acquisition. But the need for a cultural fit between firms is a lesson he has learned over time.
“When we were buying Siddalls we knew it was a financial fit but we wanted to meet all the people and they are still with us. It’s the people in businesses in industries like financial services that matter,” he says.
Simmonds entered financial services by a twist of fate. He had responded to an advert for a job based in Japan and found out at the interview that the advert had omitted the most important requirement – the ability to speak Japanese. Instead of being sent on his way for not meeting the criteria, Simmonds was directed to a UK-based subsidiary of Mercantile House Holdings and ended up working for them in the UK as a money broker at Simco Money Funds.
One of Simmonds’ career highlights is turning around losses at national IFA Towry Law following its acquisition by AMP in 2001. He managed the integration of the two firms and eventually replaced Douglas Black as chief executive at Towry.
Black provoked controversy among IFAs after negotiating a £30m bailout by the Investors’ Compensation Scheme to cover part of the £48m pension misselling liability that Towry inherited when it bought the UK IFA arm of Hogg Robinson.
The trials and tribulations at Towry and Bluefin show the good, the bad and the ugly side of acquisitions: everything from caveat emptor to the way that careers and companies can be taken down different paths as the result of a deal.
“Integrating companies is always a challenge. You learn to find out why you’re buying something. Is it done for the right reasons? Lots of deals are done for financial reasons, but does the deal benefit clients and the business? Do the people get on? Because if they don’t get on, good people will leave.
“Acquisitions can go wrong, and they do go wrong. But if you look at it, it’s not often the market that’s the problem. The classic example is a big insurance company buying a smaller business. Smaller businesses are more entrepreneurial so there’s a culture clash with bigger companies. It is difficult for the entrepreneurial thing to be part of a bigger structure.”
Having heard the death of the IFA predicted many times over the years, Simmonds is keen to emphasise how resilient advisers are in the face of potential threats like robo-advice. “The adviser community is resilient because clients want advice. There is a definitely a place for technology but it is an enabler, not a replacement for advice.”
He points out the dangers of assuming automation can fill the advice gap because less wealthy people will have simple financial needs.
“People who are not very wealthy might need to protect their family, save or pay off debt so it can be very complex. I’ve always thought you shouldn’t assume their financial affairs are simple. If they’ve got debt and a young family should they have protection or pay off their debt? Talking to a computer or automated system makes it difficult to look at someone’s overall situation.”
He is excited about Blevins Franks’ new office in Lisbon and plans to grow the firm by doubling funds under management in the next three to five years. He is recruiting more advisers but is finding this challenging, as joining means moving abroad, which may not suit all applicants, particularly those with young families.
“They have to understand they are moving lock, stock and barrel – its not like you are going on your holidays. We have to ask ‘do you really want to do it?’ and ‘does your partner want to do it?’ We don’t want them moving back to the UK after a couple of months so we talk to them and send them out there to see if they like it.”
With the EU referendum a whisker away, it will be business as usual for Simmonds, whatever the result.
“Our clients are concerned but what I say is that people lived in Europe before the EU. People are worried about things like medical expenses if we leave the EU but surely the countries would come to an arrangement? People live abroad for the climate and the lifestyle, so in or out of the EU, that won’t stop.”
What’s the best bit of advice you’ve received in your career?
Unless you own Microsoft, get up early, work hard and go to bed late. I believe in action, in doing things – as long as it’s proper activity.
What keeps you awake at night?
What has had the most significant impact on financial advice in the last year?
The pension changes.
If I was in charge of the FCA for a day I would…
Ensure that all senior staff spend a day with an adviser.
Any advice for new advisers?
Be active and learn your trade.
2013-present: Chief executive, Blevins Franks
2007-2012: Chief executive , Thinc (rebranded Bluefin in 2009); chief executive then deputy executive chairman, Bluefin Advisory Services; executive chairman, Bluefin Corporate Consulting and Bluefin Wealth Management
2001-2006: Managing director, Towry Law
1995-2001: General manager, marketing at Pearl AMP, then general manager for general insurance
1990-1995: Managing director tied business, Sun Life
1986-1990: Branch manager at Target Life then IFA specialist sales director Axa Equity Law following its acquisition of Target Life
1981- 1986: Money broker, Simco Money Funds, part of Mercantile House Holdings