With the Financial Conduct Authority now firmly in place, the financial services industry is keen to see how the new regulator will compare to the FSA.
One of the first pieces of news out of the regulator is that advisers face a 15 per cent hike in regulatory fees. Fiducia Wealth Management managing director and founder John Millican is one of many advisers who are already feeling frustrated with the new regulator.
“I was horrified to see that before anything has even started, the FCA says that all the costs are going to go up. It would be really nice to be in an environment where surprises and uncertainty about costs are not such big issues,” says Millican.
Millican certainly knows a thing or two about changing regulation, having worked in the financial services industry for more than 30 years.
He entered the insurance sector straight from school in 1967, joining Royal Insurance as a trainee inspector and acting head of department.
After a stint as branch manager at insurance broker Keith Shipton & Co, Millican joined brokers C.T. Bowrings in 1976 as a general manager responsible for setting up and running the Colchester regional office. He then became director of Anglia Insurance Services.
“I wasn’t life and pensions trained as such, I just found it more interesting. I started giving greater attention to that,” he says.
After working in the insurance industry for 20 years, Millican wanted to change career direction. The decision was prompted primarily by the 1986 Financial Services Act, passed by the Thatcher government, which outlined regulation within the financial services industry.
“It was intriguing. How many times are there in life when the world out there actually says, ‘stop, we are going to draw a new start line’?
“Something new always gets a response from me.”
Millican set up Corporate & Personal Planning Ltd in 1987, an independent investment company. He evolved the business and decided to move towards the use of platforms which offered a variety of funds. He then set up an in-house investment management strategy and took on business and economic graduates in order to form a new investment team. He rebranded the business as Fiducia Wealth Management in 2005.
Fiducia was set up to bring together two key parts of financial services that Millican believed there was a market for – the holistic financial planning that his business has been providing since 1987 and an investment management service.
“The key difference was that once we were in the position to manage our own funds, we were essentially providing all of the service ourselves. I saw it as a means of moving into the professional space.”
Fiducia Wealth Management is indeed firmly in the professional space, servicing more than 350 clients and holding around £70m in funds under management.
The firm also picked up the award for Best Small IFA at last month’s Money Marketing Awards.
Millican says he believes it is the company’s business model which makes it stand out.
“If people ask about what is happening to their funds, we know because we are in control of that. It is a big advantage for us because otherwise, once you have outsourced that to someone else, the ability to add value from the point of view of an adviser is clearly gone.”
Millican says the business had a good 2012, with positive growth in three out of four quarters and strong overall growth in funds and clients, which he expects to continue this year.
The firm also plans to grow this year through acquisitions. Millican confirms the company is in discussions with other firms and the acquisitions should be completed within the next few months.
“We have built the business on processes, so to expand we haven’t got to go and reinvent the wheel again. We know what to do, we just need to add the building blocks to what we have,” he says.
Although Millican has concerns regarding the hike in regulatory fees under the FCA going forward, an even bigger concern is the cost of compensation and how this will be shared over the whole of the financial services industry. He believes this, alongside industry issues such the debate over whether VAT should be exempt from rejected advice recommendations and HMRC’s surprise decision to tax fund rebates, has added to continuing adviser concern in a new regulated industry.
“Here we are in the new RDR world and we have still got degrees of uncertainty. Where has everybody been for the past two years or more? Now it suddenly comes out weeks before it is due to come into effect.”
Millican believes the FCA may introduce harsher regulation than the FSA.
“I think everybody would agree that there have been instances in the past when the regulator should have intervened more quickly. What the FCA has said so far has been fairly blunt and almost aggressive.
“I think we are all hoping that the relationship between the adviser and the regulator is able to improve.”
Lives: Dedham, Essex/Suffolk border
Education: Northgate Grammar School
Career: 2005-present: managing director, Fiducia Wealth Management; 1987-2005: joint managing director, Corporate & Personal Planning Ltd; 1979-87: co-founder and director, Anglia Insurance Services; 1972-76: branch manager, Keith Shipton & Co; 1967-72: trainee and acting head of department, Royal Insurance
Likes: Good manners and politeness
Dislikes: Bad manners, rudeness and the EU
Drives: Audi S4 Cabriolet
Book: Various books by Niall Ferguson and James Holland
Film: In the Heat of the Night and The History Boys
Album: Rumours by Fleetwood Mac
Career ambition: To build a successful and sustainable business that will continue beyond me
Life ambition: To obtain my private pilot’s licence
If I wasn’t doing this I would be… a pilot in the RAF