Tax Incentivised Savings Association chairman Tony Solway has witnessed many of the most significant changes to the investment business first hand but he says there are still many things to do to improve the industry.
Solway took over as Tisa chairman in July and the changes the RDR is bringing to the way investments are advised on, bought and sold and managed mean he has a lot on his plate.
Solway started off as a management consultant at Andersen Consulting.
At the time the industry was getting ready for Big Bang and the introduction of large scale automation for the first time. All the focus was on the big invesment banks which were installing big trading rooms and he says asset management felt like a cottage industry compared to the businesses of today.
When he realised that the did not want to spend his career as a consultant he took at job at Henderson, one of his clients.
As the business’s first technology employee, Solway was responsible for building the IT infrastructure at the firm and his experience has helped shape his subsequent career.
Although the business was ‘going absolutely gangbusters’ when Solway joined it, in 1987 the City came shuddering to a halt.
“Come 1987, the music stopped in September and this was followed by five difficult years.”
The expensive IT infrastructure was looking difficult to support but a change in chairman and a new business strategy put his work to good use. Henderson had built a back office system to deal with the introduction of Peps and started to offer its back office system to other investment managers looking to outsource their administration.
“We thought come 1990, we have this brand new shiny infrastructure and a lot of other firms are in a lot worse state than us so perhaps we can leverage what we have got and help others.”
The outsourcing business grew rapidly and Solway became chief operating officer of Henderson in 1993 as well as managing director of Henderson Investment Services.
Another tremor which ran through the asset management business saw the next significant change to Solway’s career. In 1996, the Peter Young affair, which saw Morgan Grenfell forced to receive a £400m bailout from parent Deutsche Bank, saw another big reshuffle in the asset management industry.
“That was the death-knell of the middle market asset management business. All of our clients said to us, ‘if that happened to you, where would find your £400m from?
“The middle market firms didn’t have that capital base and within a few years Henderson was sold to AMP and a lot of our competitors went the same way because we needed the backing of a big balance sheet.”
Solway continued to run the investment administration business and when AMP sold the business, Solway led the newly independent business until he moved to join BNP Paribas in 2002. As well as its administration business, Solway was also responsible for all BNP’s UK business expect investment banking but by 2008, he decided a change was needed.
“My wife and I decided to set the reset button on our careers. Looking back I was like a man sitting at the bottom of a volcano not aware of what was about to happen.”
It was at this time that Solway joined Tisa as a director.
“Tisa was doing extremely good work in the area of retail savings and seemed a worthwhile organisation to be part of.”
Solway does not intend to make sweeping changes at Tisa and is keen to protect its unique position in the industry.
Since taking over the job of chairman he has been consulting with the membership over what they want from the organisation.
“A lot of the feedback we have got is that Tisa is an organisation that is able to bring together insurance companies, fund managers, various different players from across the industry in order to tackle issues of policy or tackle problems with infrastructure and deliver very useful day to day technical support around financial services.”
Solway is keen to beef up its policy work and also its technical support of its members.
The organisation has recently re-organised to better reflect its role. It now has six advisory councils to cover the interests of its 130-plus members, including platforms, child savings, centralised investment propositions, distribution, retirement and savings & investment. It has also introduced four technical councils to provide support to its membership.
One area that Tisa has been doing a lot of work on is platform to platform re-registration. Earlier this year Tisa launched the Tisa Exchange or TeX, a website to facilitate re-registration.
“We now have more than enough organisations, and a significant proportion of the industry by assets, already signed up. We have started tested various components of it and are very much focussed on getting it live in the new year.”
He says making it easier to move between providers will have real cost savings for investors and will make investment managers improve the quality of their offerings.
If the launch is a success, Solway says they will look at other areas that can do the same for, with the Sipp market a particular target.
“Can we help with pension transfers? That is another area where there are are great difficulties moving from one provider to another. Can we make it easier for them to move from one provider to another? Can we make it easier for them to consolidate their pension saving in one place?”
Solway says transfers are just one issue for the pensions market.
He says the recent speculation about cuts to pension tax relief is not helpful and the entire structure of pensions and long-term saving needs to be reviewed.
Solway says the RDR will almost certainly hit adviser numbers in the short-term but there is a trade off for improving the professional standing of the industry. And although conditions may get tougher, he says predictions of the widespread destruction of financial advice are wide of the mark.
“In the short term there will be some dislocation. I am old enough to have heard the demise of advice called at least twice over the course of my career. The adviser community has always shown itself to be resourceful and will find ways of delivering advice in future.”
Born: St Johns Wood, London, 1959
Lives: Clapham, London
Education: School in Canterbury, BA Hons, Trinity College, University of Cambridge
Career: 2012-present: chairman, Tax Incentivised Savings Association; 2008-2012: director, TISA; 2006-2008: director, BNP Paribas Asset Management & Servies; 2002-2008:chief executive, BNP Paribas Security Services; 1998-2002: chief executive, Cogent Investment Operations Ltd; 1986-1998: IT director to chief operating officer, Henderson Administration Group; 1980-85: senior consultant, Andersen Consulting
Likes: Spending time with my family, golfing with friends, bobbing about in boats
Drives: Aston Martin DB9
Book: Brazzaville Beach by William Boyd or Cloud Atlas by David Mitchell
Film: Pulp Fiction
Album: Exile on Main Street by The Rolling Stones
Life ambition: To travel more, particularly in South America
If I wasn’t doing this I would be….trying to do it