Financial services has a habit of picking up people from all sorts of backgrounds. AJ Bell’s Gareth James, for example, was “discovered” by Andy Bell having previously worked at a bookies, while Pension PlayPen founder Henry Tapper once worked on an illegal merchant navy boat in Iceland.
Simon Massey, MetLife’s latest recruit, took an equally unlikely route to the sector.
“Funnily enough I did a chemistry degree,” he says. “So the obvious logical next step from spending three years studying the absorption of oxygen on polychrystallised silver foil using electron spectroscopy is clearly to go into financial services.”
Massey took on his first job in the City in the 1980s, “pushing products” to the general public in a world devoid of any real regulatory oversight.
“I was trained in the classic 1980s methodology of flogging policies. It was a good firm – I had eight days of training. For some of the less good firms it genuinely wasn’t as much as that. Then I was out cold calling and purportedly advising clients, but it was more at the sales end of the spectrum,” he says.
“I didn’t last very long there, probably brought to a head when I told my boss people kept asking me about pensions and I asked for some training, to which I was told, ‘don’t worry, just sell some more life insurance’.”
Despite this dodgy start, Massey went on to hold senior sales roles at Norwich Union (now Aviva) before being appointed intermediaries director at Scottish Widows in 2009. He left the insurer in June 2014 following a restructure and landed at MetLife as wealth management director in November last year.
The US-based provider is expected to be a major beneficiary of the Budget pension reforms, having already developed a range of guaranteed drawdown products aimed at investors who want investment control but have a low capacity for loss.
However, there remains a niggling suspicion that while most people like the idea of a guarantee, they are generally not willing to pay for it. Massey, predictably, does not agree – although it is advisers he will need to convince.
“We conduct end customer research to determine the value of a guarantee, not just the cost,” he says. “When you look at it through a value frame the answer you get back from customers is they are willing to pay for that. For most people running out of money is the number one concern because they still need to pay the bills and put food on the table.”
On the Budget reforms, Massey expects at least some of the money flowing out of annuities to benefit the provider.
“The pension reforms are positive for MetLife’s offering because the number of people who seek to take an annuity will inevitably decrease as people seek to take advantage of the new freedoms,” he says.
“However, those people by their nature will generally have a lower attitude to risk and generally little capacity for loss. So while they will want to take advantage of pension freedom, is drawdown the right answer? Certainly drawdown with a guarantee would feel a better outcome to meet their long-term income requirements while still allowing some flexibility.”
Drawdown is likely to replace annuities as the default option for most savers, thrusting people who may previously have never engaged with their pension before into a complex and risky world.
The conundrum facing providers who, in the past, have only offered drawdown to advised customers is whether to take the plunge and offer it to the masses without advice.
Massey says the risks of offering drawdown non-advised far outweigh any potential benefits.
“If you are really serious about creating long-term value in a sustainable business, non-advised drawdown isn’t that tempting,” he says. “The history of the market is littered with examples of providers finding ways of taking on significant volumes of business in the short-run but ultimately they have had to pay the price in the long-run.
“That is not an attractive business model for MetLife and we would far rather work with advisers, define our customer segment and work to get more of those customers onto our books. We are not tempted by the “get rich quick” approach.”
The temptation to rush to market with products ahead of April is also huge for providers, particularly with advisers hungry for new, innovative income options for their clients.
However, FCA chief executive Martin Wheatley fired a warning shot across the bows of the industry at the beginning of the year on product due diligence. In an exclusive interview with Money Marketing, Wheatley said: “The providers themselves will have been struggling to do the level of proper due diligence testing on the products they would need to do in order to feel comfortable. It is challenging.
“It creates problems for us if providers rush out products that are not properly thought through.”
Massey agrees any attempt to accelerate product development to fit in with the tight timescales imposed by the Government’s pension reform agenda would be a mistake.
“When you are engaged in product design – and I have seen it in multiple environments – it is a process that takes time for many and various reasons. You need to research the proposition design with customers to ensure people actually need it and determine what the price should be. That is critical and it takes some time.
“Any provider that feels there is a short cut will be making a big mistake because that consumer research is absolutely critical. Providers need to do the job properly. Our industry has been burnt countless times by firms designing products that simply haven’t worked. It’s important we don’t repeat those mistakes.”
What’s the best bit of advice you’ve received in your career?
Leaders cast long shadows (especially in my case).
What keeps you awake at night?
I’m currently reading Triathlon Training in Four Hours a Week and The Art of Landscape photography. Room for improvement in both, I think!
What has had the most significant impact on financial advice in the past year?
The build up to the launch of pension flexibility – it puts professional advice at the very centre of retirement planning decision making.
If I was put in charge of the FCA for a day I would…
Start building a plan to ensure consumers from all walks of life can save more easily for the long term and see the value of it.
Any advice for new advisers?
Get qualified, act with integrity and always do right by your client. Above all, be proud of what you do – it changes people’s lives for the better.
2014 – present: Wealth management director, Metlife
2009 – 2014: Intermediaries director, Lloyds Insurance Division – Scottish Widows
2005 – 2008: Director of business development, Norwich Union
2003 – 2005: Director of IFA development, Norwich Union
2002 – 2003: Director of customer service, Norwich Union
2000 – 2002: Head of sales, Norwich Union
1998 – 2000: Divisional manager, North and Scotland, CGU
1986 – 1998: Various roles, Commercial Union
1985 – 1986: Direct sales consultant, Marlowe Sachs