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Sesame BG’s John Cowan: We are the restricted pioneers others will follow

In his first interview since taking control of Sesame Bankhall Group, chairman John Cowan talks about his change of role following George Higginson’s departure and what he sees as the inevitable move to restricted advice.

 In his long and varied career, John Cowan will not have experienced many periods as eventful as the last year as chairman of Sesame Bankhall Group.

In early 2013, the business was put up for sale by parent company Friends Life. Shortly afterwards, the FCA fined SBG a hefty £6m for failures around systems and controls. Then in November the business confirmed it would move to a restricted model of financial advice and, just for good measure, two weeks ago, chief executive George Higginson left the business in a senior management shake-up that saw Cowan and managing director Stephen Gazard take up his responsibilities.

Cowan has had little time to pause for thought since then and says that, as he was heavily involved in planning the restricted switch, there will be no change to the overall strategy: “I’ve been involved with Sesame for five years now and I’ve been involved in the building and setting of the strategic direction of the business. It is set in stone, we know where we are going and we are very clear about it.

“I was passionate as a non-exec director about the strategy and I’m not someone stepping in and rewriting the script. I believe in the strategy and I was an architect behind it.”

Cowan says he should not be seen as a short-term, gap-fill leader.

“It’s like if you appoint Mourinho or David Moyes to Manchester United for example. Is that a long-term solution? My appointment is a long term solution for as long as the business feels that I can do the job. And I feel absolutely confident that I can do that job.”

He says the group has received interest from some high-profile names interested in joining the firm.

“We have got an executive team that is really good. But it is interesting and reassuring that some high-profile names have made the approach. I’m going to build the business with the people that are here, Stephen and I will decide if we need to add to it.”

Cowan says he is disappointed that some rivals have chosen to criticise the decision to become restricted.

“It is short term opportunism on the part of certain people and it is disappointing really because they should be more statesman like than that.”

Cowan-John-Sesame Bankhall-2014

He warns this short-termist view could backfire when other firms are forced to adopt elements of restriction, something he thinks is inevitable.

“Financial planning and advice is what the consumer wants. Executed through an appropriate range of products with an appropriate range of product providers would do the job for most people. Independent financial advice I see in a space that looks after perhaps non-mainstream things like equity release, inheritance tax and so on.

“Because we are pioneers of this it is obvious that you get some competitors on the sidelines that are trying to take advantage. But the reality is that 12 months from now there will be an awful lot of people in the same space as ourselves. We are ahead of the curve. Strategic players with our vision are going to be subject to criticism but we believe in it and that is where we are going.”

There is one thing he dislikes when it comes to restricted advice – the name. He argues that the term is pejorative when it need not be and hopes the regulator will reverse its decision to keep the label.

“I passionately hate the expression restricted advice. Given the collective intelligence in the financial services community we ought to have come up with a better term. It is not descriptive for the consumer.”

Further details of the move to restricted will be revealed at Sesame’s conference next week but Cowan says his only regret is its timing. “We should have signalled change faster. What we have done is correct, the timing is the only weakness. If I had a regret, it is that we should have done it earlier.”

Investing heavily in technology has been an ongoing process that saw the firm agree a deal with Australian outfit Iress for a range of technology support functions. “We’re spending a lot of money, probably between £1m and £2m on technology. We signed a contract with Iress and that is really where a lot of effort has gone.

“This business was fined last year over systems and controls. Ironically as part of our strategic thinking we knew we needed to build a system that would help advisers do a better job for their end clients, keep records, have an audit trail and so on.”

Despite Friends Life’s decision to put SBG up for sale last year, Cowan will not be drawn on the proposed sale of the business and says his team is concentrating on growth.
An issue that can rear its head during acquisition talks is legacy risk.

Cowan says Sesame is aware of ongoing discussions between other adviser networks and insurer Marsh designed to try and secure a collective risk transfer deal to alleviate past liabilities but says the firm is not actively involved: “We need to think about how to solve that problem and I understand that debate is going on. Back-book insurance is an issue in the market and we are very aware of it.”

However he seeks to address that risk, Cowan will hope that tighter processes and controls will mean that the next year will be a little less turbulent than 2013. But Cowan says whatever happens he hopes to involved for the long term.

In fact, he even pledges to sit down with MM in five years to discuss the full impact of the RDR as SBG chairman.

Cowan-John-Sesame Bankhall-2014-headshot


Born: Glasgow

Lives: London

Education: Holyrood, Glasgow

Career: 2013 – present: chairman, Sesame Bankhall Group; also non-executive chairman, Mortgage Options and Uinsure; 2009 – 2013: non-executive director, SBG; 2006 – 2013: various non-executive directorships, including Paymentshield, Foresters and TCC; 2003 – 2006: general manager, National Australia Bank / MLC Investments; 1999 – 2003: group sales director, Prudential; 1969–1999: sales and marketing director, Scottish Amicable

Likes: finding and developing talented people, supporting Celtic FC, the visual arts, the excitement (and fear) of auctions

Dislikes: pompous people

Drives: 12 year old Mini One

Book: The Quiet American by Graham Greene

Film: The Battle of Algiers

Album: anything by Bob Dylan

Career ambition: to help people and businesses to reach their full potential

Life ambition: keep working hard and also travel to countries I have not yet seen

If I wasn’t doing this I would be… the owner of a small art gallery


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. Well ‘pioneer’ is an adjective I wouldn’t normally associate with a Network.

    I am impressed that Mr Cowan’s Career ambition is to help people and businesses to reach their full potential. I have heard rumours that those wishing to leave the Network to become DA in order to retain their independence are being strong armed.

    I wonder if this rumour has any truth in it? In effect they are being told that unless they undertake to employ Bankhall Compliance consultancy as a condition of leaving, the Network will make their leaving very difficult. Has anyone else heard or experienced this? If true (or even partially true) Mr Cowan has a hill to climb in order to achieve his ambition.

  2. Harry as a Sesame Member I can confirm there is no strong arming in to using Bankhall if one wishes to go direct, there are however a lot of incentives being offered if you go with Bankhall – wouldn’t any business do the same to keep their customers in some form?

  3. If the standards of independence that the regulator is ordering all the networks to enforce on their members are anything to go by, I think he’s probably right. Last time I checked, there were 19 wrap platforms that, as an independent, you’re supposed to compare (on a funds-specific basis) not only for just a proposed £11,520 ISA contribution but even for small top-ups to long established ISA portfolios. That’s regulation gone totally bonkers OTT. It just can’t be done at a remotely sensible cost, and today a colleague told me that there are in fact no less than 34 wrap platforms, most of which are predicted to fail to acquire sufficient AUA. They’re losing money by the boatload and simply won’t survive. Aviva’s wrap is (as far as I know) currently the cheapest, but that’s an unsustainable loss-leader that wil have to be abandoned sooner or later. It’s just a cut-price charging structure to attract as much money as possible in the wake of a couple of disastrous;y inept previous launches. What then? Will intermediaries be obliged to migrate everything to another platform and do the same again just a year or two later? The regulatory loonies really are running the asylum, as usual completely oblivious to commercial practicalities.

    I went restricted to one platform a few months back and wish I’d done it before Jan. 2013, thereby saving myself a shedload of grief with my network’s file checkers.

  4. Recently we have had an issue with one of Sesame’s so called restricted panel providers which frankly leaves a very bitter taste in our mouths. Thankfully we are not Sesame members and are independent but it does beg the question how a restricted adviser can do business with a panel provider which has really hacked him off! At least being independent means you can usually find an alternative. And frankly I would have grave doubts about any panel provider which treats us so badly.

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