MGM Advantage chief executive Chris Evans describes his firm’s recent transition from mutual to life company as “all consuming”. Last year MGM was sold to private equity firm TDR Capital in a deal that created two companies out of one.
In December, MGM Advantage became a new life company while the mutual company was renamed Marine and General Mutual and continued as a separate firm. Now that the deal is done, Evans can focus on developing MGM’s business and working on “some interesting product development plans that I can’t talk about at the moment”.
Part of his plans for growth include the acquisition of equity release lender Stonehaven, which MGM acquired last month. The deal will see the lender keep its brand as it becomes a wholly owned subsidiary but gives it security of funding.
Evans says: “By sharing expertise and ideas across the group, we can leverage opportunities and help Stonehaven grow sales.”
Evans joined MGM as chief executive in 2007 and faced an immediate challenge. “The company had adequate capital but a broken business model. I thought the way forward was to reposition it and change just about everything you can change about a company, but I thought at least the capital was adequate. But because of what happened to capital markets in 2008 we had to manage the capital carefully and the business plan was a success, so it happened the other way round.”
As a mutual, MGM found it hard to find the capital to run a successful business. “Our biggest problem was being able to fund the business and also pay a return back to members,” says Evans. “That’s why we arrived at the solution we did. We were able to make payments to members for the sale of new business capital to TDR Capital and look to distributing the remaining capital to existing members.”
Before the deal with TDR Capital MGM was able to launch its flexible income annuity and enhanced annuity. “They are two successful, innovative products that have exceeded expectations in terms of sales and marketing. The FIA completely redefined the with-profits annuities space.
“We now have the financial backing to participate in the market even more actively than we have done before. That will enable us to bring better rates into the market. Anyone who is tracking annuity rates will have seen that since our acquisition by TDR, our rates have improved very meaningfully.”
Evans grew up in a farming family that owned dairy cattle. “I’ve always been close to animals and I wanted to be a vet, but I’m not a scientist and I got interested in business. I found that as much as I love animals, I enjoy working with people.”
He studied business at university and got into financial services through a holiday job. “My father, who was a corn and seed merchant, taught me how to sell. He explained the job of a salesman by asking me to sell a pen to him. In my early twenties I joined the broker arm of Prudential and I was asked that same question in my job interview. So I started and the bloke who was interviewing me had to say, ‘Stop, I get it’.”
He spent 20 years of his career with Prudential, five of them in Thailand. “That was my first time as CEO of a listed company. I went through the Asian crisis and learnt more in first two years in Thailand than in the 20 years before because of the pace and learning new things,” he says.
He enjoyed his time at the Pru but decided it was time to do something new.
“I kept thinking I ought to leave Prudential but they kept putting me into interesting jobs. I was lucky that it was a business that invested a lot in me. But if you spend 20 years at a company and get to manage it, you ask yourself how much of what we have done is because of the company or because of me. It was time for me to go and do something else; to really find out who I am.”
Evans went to work for HBOS Europe and then Mercer but he would have left the big corporate world sooner if he had realised how much fun a smaller company could be. “It is easier to create a sense of endeavour at a smaller company,” says Evans. “Decision-making is more immediate, and I know the whole of the business really well.”
In a play on sharing a name with the famous TV and radio presenter, Evans hosts a Big Breakfast with the staff of MGM Advantage every few weeks. “We have informal talks about what we can do better in the business. The other day someone said it’s like being part of an exclusive club. You are only invited if you are up for what we’re doing and care about it.”
As a specialist in retirement income, MGM Advantage is a strong supporter of the open market option to get the most from their pension savings.
“People don’t shop around because of inertia. Only half are shopping around in the open market and that can’t be right. We have got to nudge consumers more urgently than we have done before.
“We completely support the ABI code of conduct on retirement choices but we don’t think it goes far enough. When people get a ‘wake up’ letter they shouldn’t just be allowed to roll over with their existing provider. Providers should write and tell customers they need to go to an annuity broker.”
Evans says people will be better off if they can get financial advice but that is not economically viable for the smallest pension pots. “More needs to be done to give more people access to advice, or at least guidance,” he says.
A year after the RDR, Evans says: “I think we’ve seen a period of contraction of people giving advice. Most advisers have managed to work out what their business model should be and are learning how they can operate within the spirit of the RDR.”
He regards the RDR as a good thing. “All my career I’ve felt the work of the intermediary is valuable and the industry ought to value intermediaries and enable them to value their role in the whole chain. I’m very confident the well-run businesses will come through.”
Born: Royston, Hertfordshire, 1956
Lives: Rowhook, West Sussex
Education: Elmbridge Boarding School, Cranleigh to O Level; Stratton Grammar, Biggleswade for A Levels, Insead, Indiana Uni and LBS for executive development
Career: 2007-present: chief executive, MGM Advantage; 2006 – 2007: UK business leader, retirement solutions, employee benefits and benefits outsourcing, Mercer: 2003 – 2006: sales and marketing director, HBOS Europe FS; 1999 – 2002: managing director and intermediaries director, Prudential Europe; 1995-1999: managing director, Prudential TS Life,Thailand; 1982-1995: broker consultant through to managing director, Prudential intermediary division
Likes: The countryside, enthusiasm, cheese, teamwork, Greene King IPA, more cheese, tennis
Dislikes: Butter beans, apathy, waiting at West Worthing Railway crossing
Drives: The responsible one: Lexus RH 450 Hybrid. The irresponsible one: Maserati Gran Turismo
Book: The Mayor of Casterbridge by Thomas Hardy
Film: Life is Beautiful
Album: Dark Side of the Moon by Pink Floyd
Career ambition: For MGM Advantage to be the best in the retirement income market.
Life ambition: For our two best friends (our son and daughter) to be happy and doing all they hope for
If I wasn’t doing this I would be… Travelling the world