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Profile: Old Mutual Wealth’s Carlton Hood on the right way to deliver vertical integration

If you meet Carlton Hood, Old Mutual Wealth’s customer director, don’t mention meerkats. Hood was chief executive of the price comparison website Confused.com when rival firm Compare The Market unleashed its popular ‘Compare The Meerkat’ advertising campaign in 2009. “That was the biggest challenge of my career,” he jokes.

On a more serious note, Hood says the real challenge he has faced in financial services is grappling with the complexity that seems inevitable given the legislation and regulation around it. Hood believes much of this is down to concerns about the consequences of getting it wrong.

“Trying to simplify the environment in which we operate is challenging,” says Hood. “My role is about the positioning and prosperity of Old Mutual Wealth that now encompasses businesses like Intrinsic and Quilter Cheviot. Our aim is to offer the best possible service to advisers, then to equip them to offer simple and competitive solutions to their customers.”

Old Mutual Wealth initially comprised Old Mutual Global Investors and Skandia but it now has more strings to its bow following the acquisition of advice network Intrinsic and discretionary fund manager Quilter Cheviot last year. The resulting “vertically integrated” retail investment platform and asset management business is intended to provide advisers and their clients – whether Intrinsic members or not – with an experience summed up by three key points: ease, value and peace of mind.

“Customers want something that is easy to understand. They want to feel valued, with personal attention and knowing they are not being ripped off. They want the peace of mind that their objectives will be delivered,” says Hood.

Hood believes that Old Mutual’s business strategy can deliver in all counts. But he prefers to describe that strategy as “both/and” rather than “vertical integration”. 

“I think ‘vertical integration’ is an ugly term. It sounds negative, like you are taking something away to integrate it with something else, rather than adding something. I’d hate to think vertical integration could hide a weak part of the business; it can’t be used as an excuse. Each part has to be a leader in its space,” he says.

“Old Mutual Wealth has a ‘both/and’ strategy. We want to be the best provider we can be in the advice network and platform markets. We have to excel separately but we’d also like those pieces to fit together as a whole ranked as the sum of all its parts. We want our platform and asset management business to be the best in the market. But it is not easy to do a ‘both/and’ strategy because you are pitched against the specialists and the vertically integrated businesses.”

Hood points out that only a small percentage of clients and advisers will use the full range of services Old Mutual Wealth offers, including Intrinsic, so the company needs to support the other advisers. “They can select each of the parts and we will make them as good as possible. We can’t afford to have weak parts of the business, as they wouldn’t be used,” says Hood.

As editor of his school’s newspaper, Hood wanted to be a journalist when he was younger. But his head was turned by the variety, glamour and salary on offer in management consultancy. It was at The Boston Consulting Group he got his first taste of financial services.

“As a management consultant we got a flow of work from retail banks,” he says. “We got involved in the Lloyds TSB merger and worked with NatWest. I loved the combination of people’s daily needs, complex intellectual needs and technology.”

Now in his second spell at Old Mutual, Hood initially joined the firm in 2000 for what he thought was going to be a six-month contract in South Africa. That six-month contract turned into the best part of a decade. “When I went to South Africa I didn’t know Old Mutual was going to offer me a permanent job; I didn’t know I was deciding the next decade of my life,” says Hood.

He has fond memories of his time in Cape Town. “I went there with the demutualising and listing of Old Mutual. It was a great time to be there – Nelson Mandela was president and one evening I had dinner with Desmond Tutu.” Old Mutual was involved in an initiative to sponsor young leaders – the Tomorrow’s Leaders Convention – and Archbishop Tutu was speaking about his struggle against apartheid. “He made it sound like he’d just been there at the time, doing what anyone would do,” says Hood.

By the time he moved back to the UK after almost eight years away, Hood was missing his family and ready to return. Following a spell with management consultants Eden McCallum, he entered the price comparison world as head of interactive at Admiral Group and chief executive of Confused.com, part of the Admiral Group. Does he think consumers of financial services know the price of everything and the value of nothing? “Price is always important and things like growth in digital communication and the RDR have made the industry more transparent. But price is not the most important thing, especially in long-term investments, where very few people look at price as the first thing,” he says.

Upon his return to Old Mutual in 2011, Hood found the company had changed a great deal as a result of the financial crisis. “It was more humble. It had refound its purpose in the northern hemisphere and began rebuilding its financial strength between 2008 and 2012,” he says.

So what does Hood think about the platform industry so important to the future of Old Mutual Wealth? “There are too many of us, so scale is a problem. With scale comes the ability to operate cost effectively and make a profit. There is the pace of change and having to keep up. It has been difficult to keep abreast of the regulatory change – we have had the RDR and now pension freedoms so the ability to offer the services that advisers need is a huge challenge,” he says.

“The difficulty is trying to simplify how you add most value to advisers and what you can do beyond the basics in terms of the breadth of the offer, tools and linking to investment solutions.”

CV

2014-present: Customer director, Old Mutual Wealth

2013-2014: Group customer director, Old Mutual

2012-2013: TV presenter for Compare Your Life, a Channel 4 series on running your own business

2011-2013: Strategic marketing director, Old Mutual

2008-2011: Chief executive, Confused.com and head of interactive, Admiral Group

2008: Independent consultant, Eden McCallum

2000-2007: General manager, group strategy and marketing, Old Mutual, South Africa

1993-2000: Strategy consultant, The Boston Consulting Group

Five questions

What’s the best bit of advice you’ve received in your career?
An old boss told me to give the credit and take the blame. I thought that was sound advice and I have sought to live by it.

What keeps you awake at night?
The scale of the activity we’re engaged in. There is a lot going on and I have a Rolodex of projects and things to do.

What has had the most significant impact on financial advice in the last year?
Pension freedoms. This is a once in generation change.

If I was in charge of the FCA for a day I would…
Introduce kite-marked guidance to improve the gap between advice and information.

Any advice for new advisers?
Engage with digital; think about how you will be using it in five years time.

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