SimplyBiz chairman Ken Davy’s first ambition was to be a game warden on an African reserve. “That was from the age of seven until six weeks before I left school. I found out the only way of achieving that was to go out as a farmer, which I did not fancy at all.”
Davy was already running a part-time photographic business in Huddersfield, so decided to go into photography instead. After three years as a darkroom technician, he spent four years as a cruise ship photographer. When he returned to Huddersfield to build his own photographic business, he found he wanted a career that gave him more freedom.
“I chose financial services so I could have control over my timing,” says Davy. “I became a life insurance salesman at Abbey Life and really took to it like a duck to water. My mantra was that my clients would know what they were buying, what it cost, why they were buying it and who they were buying it from.”
A four-year stint as an adviser armed Davy with the knowledge he needed to form network DBS in 1983. “I believe the network concept was invaluable to the sector and I am proud of creating DBS.”
However, he says the evolution of the network has not necessarily been a good one, which is why he opted to move into support services after DBS was sold off.
“A network essentially controls the licence to trade and adviser cashflow. After the retail distribution review it will only need one adviser in one appointed representative company to be unable to give advice under the independent banner for the whole network to be classed as restricted. I do not believe there will be any IFA networks after 2012.
“I had no particular plans when I left DBS but I did think networks had outlived their usefulness. I decided the greatest opportunity was in the IFA sector. SimplyBiz is the reverse of DBS in that all the firms we serve are directly regulated and we just help them operate efficiently.”
SimplyBiz now helps 5,000 advisers. “I am still really in life insurance but now I am just helping more people. The firms we serve arrange thousands of policies for clients each week. As an individual salesman I could not have done that, no matter how hard I worked.”
Davy believes the role of advice has not changed since he joined Abbey Life in 1963. “The core is still to make sure clients know what they are buying but many aspects of advice have become far more laborious, despite big leaps in technology. Regulation is not allowing technology to work as effectively as it could because of some ridiculous bureaucratic elements.”
He believes this will only get worse after the RDR, saying fewer people will have access to advice because IFAs will have to spend more time and money on compliance.
He cites the yearly certificate of professional standing requirement as an example. “Advisers have compliance officers and Gabriel returns. The FSA has no shortage of information on what is going on. Every 10 years is fine, possibly even every five, but every year is frankly ridiculous.”
The definition of independence could also make advising more difficult, according to Davy. “Independent advice means the FSA is driving firms towards considering unregulated investments and many other esoteric products. If I go to a chiropodist I do not expect him to look at my eyes. If someone is independent, by law of agency, they are acting for their client. It is nonsensical of the FSA to force advisers into more risky product areas to be independent.”
He believes that outsourcing is one way to remain independent without venturing into risky areas. He says: “You can be so much more effective if you outsource the things that can be done best by other people. I heard a saying once that ’Frank Sinatra does not move pianos’. In the same way, an IFA’s skill is helping clients make informed judgements.”
One thing Davy is certain of is that independent advice will remain the gold standard after the RDR. “Restricted advice will prove much less attractive than many organisations believe. I can see why life insurers would be attracted to it, because it is a way of increasing their profits, but it does nothing for consumers or advisers.”
Davy acknowledges the work that advisers are having to put in to make themselves RDR-compliant. SimplyBiz training arm New Model Business Academy will launch an alternative QCF level four assessment for advisers better suited to practical evaluation next month.
“It has been approved by the FSA and is in the formal consultation process. It is a question of horses for courses. For someone who left university a few years ago, taking an exam is the best way of qualifying but there is a significant minority for whom exams are inappropriate. This is not a soft option.”
SimplyBiz is also broadening its service range by linking to other professions, as shown in its recent acquisition of solicitor IFA firm Sifa.
“We can now provide a wider range of services, from core compliance through SimplyBiz to bespoke business support through Compliance First and linking with the legal profession through Sifa.”
Davy wants SimplyBiz to help advisers become “more successful at every level” and intends to remain at the SimplyBiz helm to help the company achieve these goals. “I thoroughly enjoy what I do. I do have an ambition to return to selling life insurance in 10 years but I have no intention of hanging up my boots here yet.”
Born: Filey, East Yorkshire
Education: The School of Life
Career: 2002-present: chairman of SimplyBiz; 1983-2001: founder and director of DBS; 1979-83: IFA; 1970-79: Abbey Life; 1963-70: ran and built a photographic studio in Huddersfield; 1959-63: cruise line photographer; 1956-59: darkroom technician
Likes: People and keeping promises
Dislikes: Curries and lack of integrity
Drives: Jaguar XJ Executive
Favourite book: I Can by Ben Sweetland
Favourite album: Elvis’s Gold Records
Career ambition: Always enjoy today
Life ambition: To have lived life to the full
If I wasn’t doing this I would be… Either a barrister or Prime Minister