W orking for a management and IT consultancy firm, Shaun Crawford could be
expected to proclaim a strong belief in the role of new technology in
shaping the financial services world.
He is charged with expanding the presence of Cap Gemini Ernst & Young
through the financial services industry, and sees the financial services
company business model ripe for a complete overhaul.
As vice-president and head of insurance at Cap Gemini Ernst & Young, one
of the world's biggest management and IT consultancy firms, Crawford
believes the time is right for firms such as his to play a major part in
helping product providers take the opportunities of the new economy,
allowing them to concentrate on developing their core business.
After a degree in accountancy from Oxford Polytechnic, Crawford qualified
as an accountant and worked for, among others, Midland Montague Bank and
Price Water-house before getting involved in setting up NatWest Life, where
he held senior management roles in finance, marketing and sales.
After five years with NatWest Life he joined Ernst & Young where he was a
partner until its merger with Cap Gemini in July 2000 when he took up his
present role. Now aged 40 and married with two children, Crawford spends
his leisure time running Marlow Under 10s, his son's football team, and
failing to do as much golf and skiing as he would like.
He was involved in the preparation of the CGE&Y report into polarisation
published last February, which predicted the Treasury wanted to push
through plans to scrap polarisation and that that would lead to the
big-name product providers dominating the market.
Crawford's vision for the financial services industry sees two main
changes – both led by new technology. He sees an increase in third-party
servicing coupled with a new integrated distribution framework based on a
depolarised marketplace and greater use of the internet.
“I feel excited, there is a lot that can be added to the industry at the
moment. With CGE&Y, we can offer end-to-end solutions to providers by
outsourcing back-office management. We want to get into the risk and reward
of running these systems.
“The senior managers of life companies want to be thinking about products,
not whether the PCs are working or what is going on in the back office.
Third-party administrators will do administration so life offices can do
the core business they should do.”
Crawford is convinced we will see a greater move towards multi-ties and
depolarisation, with a reduction in the number of product providers. While
the changes to polarisation have been widely linked to the Treasury's
desire for stakeholder pensions to succeed, he believes stakeholder cannot
succeed without compulsion.
H e says: “This is a highly politically sensitive subject at the moment
and is certainly not in anyone's manifesto. Compulsion has to come –
depolarisation is tied in with that. But if the Government is going to do
it they will have to move early in the next Parliament.
If compulsion is brought in, it will be employers and the self-employed
footing the bill in the first instance. It is another form of tax.”
He has little comfort to offer IFAs hoping to hang on to polarisation
although he does not see it as a problem for them. “In CP80, the Government
made it clear there will be change. There is a lot of detail in that paper
which makes me think that alth-ough it is not a done deal, it is very
likely to happen.
“I think depolarisation can be good for the public. If people move to Cat
standards then they will be able to differentiate between funds in actual
He believes industry changes have already started to take effect and that
there is a lot more to come. “We are seeing the start of something big. Cat
standards and the 1 per cent price cap will spread to a greater range of
products, although, hopefully, market forces will bring that before the
Government has to force it. But overall charges will be lower than 1 per
cent in the long run.”
Crawford also believes the industry will continue to change the shape of
commission from front-end loading to level commission.
But change need not spell doom for IFAs. “I passionately agree with the
need for face-to-face advice. All the changes will not reduce the need for
advice but will just simplify the process. The vast maj-ority of processes
will be e-enabled. E-commerce will take all the drudge out of the process,
with almost all paperwork taken out.
“The changes will not mean the death of IFAs. We still need salespeople.
Networks will need to evolve from being trade compliance clubs to being
third-party added-value service providers. Nationals will gain ground but
smaller IFAs will find it harder to survive alone.”
Crawford's vision for the financial services market is one of a healthy,
thriving, efficient business model making the most of the new technologies,
where the UK is setting the pace in Europe.
“I want to stay in the financial services market and see this new business
model working. It is a great opportunity for the industry to shake itself
up and lead the world. If we get this right, the EU can only see it as a