Anyone who works in financial services knows how the industry can be in its own little world, using language many “ordinary” people need translating.
Old Mutual Wealth chief distribution officer Richard Freeman is only too aware of the sheer scale of people outside the bubble that the industry needs to connect with; not only to help more people understand what regulated advice means and appreciate its value, but also to bring new people with fresh ideas in to help meet the increasing demand for it.
He says: “We’ve got to promote advisers more regularly and the Treasury needs to promote advice, so people will start to see it as a career more than a job.”
Freeman’s input to the industry goes beyond the day-to-day functions of his job title. At Old Mutual Wealth, he chairs the Customer Outcomes Forum, which was set up to put the customer first in everything the business does. “It’s something I’m very passionate about.”
He is also involved in developing the Financial Adviser School that Old Mutual Wealth bought from Sesame last year. What is more, he was part of the Financial Advice Market Review expert advisory panel and is now a member of the FCA’s Financial Advice Working Group that is looking at how three of the recommendations from FAMR can be taken forward.
The future of the profession
One of these recommendations – publishing a shortlist of potential new terms to describe “guidance” and “advice” – has been a revelation for Freeman. He has viewed video footage where people in their 20s and 30s, whom he describes as well read, come up with distinctions between guidance and advice that reverse the norm in the financial services industry.
He says: “We are just about starting the second round of consumer research. For us as the panel, what younger people understand as advice and guidance is very different to what we believe in financial services. Some of it is the polar opposite.
“The second round of research is more specific around guidance and what regulated advice might mean. We would say guidance is easy to understand but a lot of people see it as: ‘you advise me then guide me to a solution’. It’s the other way round, and regulated advice is even more complicated.”
Things will be changing for Freeman and Old Mutual Wealth as part of a restructure, due for completion next year, that will see the parent company separate the four parts of its business – Old Mutual Emerging Markets, Nedbank Group, Omam United States and Old Mutual Wealth (which includes the advice network Intrinsic) – into standalone firms.
“I’ll still be looking after the Financial Adviser School, making sure we bring on the next generation of advisers. Not just advisers but other parts of the industry, underwriters and administrators.
“We’ve got 60 people studying at the moment but we’d like to get that to 100, then break it out into chartered and see how we can scale it up. We will let it run for 2017, then move into different areas.”
A new chapter in the development of the Financial Adviser School is its accreditation as an approved provider of advice apprenticeships, which should be available from May.
Freeman explains this will enable appointed representative firms to access the funding to take on new people, creating opportunities for those who would not otherwise have joined the industry. Employers can receive up to £9,600 towards the cost of developing a competent adviser and firms with fewer than 50 employees may qualify for extra incentives.
“We’ve got 60 people studying at the moment but we’d like to get that to 100, then break it out into chartered and see how we can scale it up.”
Education, education, education
However, Freeman feels more needs to be done in terms of financial education in schools and universities so younger generations have a better understanding of advice and perhaps see it as a potential career. After all, how can you work towards a career in something if you do not know it exists?
He is also keen to develop links with ex-services personnel. He highlights the fact 16,000 people come out of the armed forces each year; some of which could be suitable for roles in financial services.
Freeman’s own introduction to the world of financial services came after a successful 16-year army career, in which he reached the rank of major. Although he admits he still misses it every day, it was not difficult for him to adjust to life on civvy street.
He responded to an advert in a regimental magazine to join the officers’ club at Allied Dunbar and swiftly got the job. “I left the barracks on a Friday and started at Allied Dunbar on the Monday. My skills were transferable and I was very lucky.
“The brigadier didn’t want me to leave. He said if I wanted to come back within 12 months he’d reinstate my rank, so I couldn’t lose.”
Acknowledging Allied Dunbar’s reputation is now “much maligned”, Freeman says it was a fantastic training ground for new advisers. It had its own training centre, which was unusual for the time, and you would be rewarded with promotion if you got the results. When Zurich bought Allied Dunbar in 1998 Freeman stayed with the firm. “What Zurich brought to the table was professionalism and the move from direct sales to adviser distribution.”
By 2005 Freeman had moved on and co-founded the Intrinsic network with five former colleagues, including Lord Sandy Leitch and Kevin Ronaldson, who went on to form wealth manager/consolidator Bellpenny in 2012.
“At Intrinsic we saw the gap in the market for multi-tie networks. It was an exciting time but there were days when I thought ‘my God, have I done the right thing?’.”
Intrinsic was sold to Old Mutual Wealth in 2014 and Freeman, who had been the firm’s chief executive, moved across to Old Mutual Wealth the following year. Freeman says Old Mutual Wealth was a perfect fit for Intrinsic because of the way it looks after the customer.
“Everything [Old Mutual Wealth chief executive] Paul Feeney promised for Intrinsic he’s delivered. And we’ve more than delivered what we promised for Old Mutual Wealth.”
What’s the best bit of advice you’ve received in your career?
It was from Sandy Leitch. He said: “As a leader it’s good to be unreasonable at times.” He meant it is good to just throw something in there to cause a disruption and test things.
What keeps you awake at night?
Nothing really, but the challenge from big IT projects is difficult.
What has had the most significant impact on financial advice?
The RDR and the pension freedoms.
If I was put in charge of the FCA for a day I would…
Insist on consistency across all departments in all areas of the regulator.
Any advice for new advisers?
It’s never been a better time for a career in financial advice. It’s not just about exams, it’s about building long-term relationships.
2015-present: Chief distribution officer, Old Mutual Wealth
2010 – 2015: Co-founder and sales director, then chief executive, Intrinsic Financial Services
1989-2005: From sales associate to area sales director, Allied Dunbar/Zurich Financial Services
1973-89: Major in the British Army