As the man charged with the task of putting SEI Investments on the UK intermediary map, Simon Ewan could be forgiven for being a little apprehensive. With more than 150 retail investment houses and over 2,000 retail funds in the UK today, IFAs are not only spoilt for choice but are also quickly becoming sceptical of all things new.
Yet, with no ambitions to take on companies such as Fidelity or Jupiter in the mass-market stakes and a formula for success which has been tried and tested in 10 other countries, Ewan is quietly confident that SEI will have no problem making its mark.
The SEI proposition is certainly different from its rivals. Unlike other multi-manager houses, it does not simply ask IFAs to buy its funds of funds. Instead, it offers what it calls “investment solutions”, giving IFAs the opportunity to completely outsource the day-to-day portfolio management of clients as well as leave their back-office admin in the hands of a third party.
Ewan says SEI's 33 years of experience in the US made it clear that the UK intermediary market was evolving into the perfect environment for the company's proposition.
He says: “We saw a sim- ilar set of drivers occurring which had driven our business in the US and South Africa. Intermediaries need to be more accountable, offer a value-added service and need to move to fees rather than commission.”
Ewan believes the pressures on IFAs are making it increasingly difficult for them to add value. With lower charges and increasing demands on their time, he says it has become almost impossible to put the time and effort required into portfolio selection.
While many IFAs see fund selection as a central part of their role, SEI believes it makes much more sense for intermediaries to outsource this part of their job to a firm that has the resources and time to monitor a portfolio properly.
Ewan says: “The core competence of most intermediaries is their client relation- ship – helping their clients achieve their goals, getting them into retirement successfully, fulfilling school fees programmes, making sure they have proper inheritance tax solutions, etc. Our core competence is researching investment managers, combining them together, monitoring them, firing them when necessary and replacing them.
“By outsourcing that part to us, the intermediary can focus more on running their business, expanding their business, becoming more profitable and accruing more clients. At the same time, they can offer their clients a rigorous investment process. It is very consistent, very dependable and it has no nasty surprises.”
Since setting up SEI's London office at the start of last year, Ewan has been busy finding out what the UK intermediary market wants. He says SEI tailors its proposition to the individual country it is entering rather than trying to clone its US offering across the globe.
Having talked to 15 of the biggest IFAs last year, including Hargreaves Lansdown and Chase de Vere, SEI's first funds are due to be launched in July. Ewan says SEI has 30 IFAs ready to use its service.
But he insists SEI has no ambition to dominate the UK market. In the US, the company found that high-profile campaigns and roadshows were not the key to success. Last year, however, it was the ninth most successful US fund manager in terms of new business, as market conditions and consolidation in the intermediary market continued to make its service more attractive.
In the UK, Ewan is looking to employ a similar strategy of stealth. He is confident that word of mouth and changes to the IFA marketplace will grow the business. In the medium term, he expects to have a core of just 200 IFAs which use the service.
He says: “We are looking at those intermediaries which have both the desire and the ability to take on what we offer and who are comfortable with an outsourced proposition. We have grown in a very short time in the intermediary markets in both the US and South Africa. We do not see why we cannot do that in the UK, particularly as the intermediary is going to see a lot more competition.”
Ewan joined SEI from multimanagement style fund manager Frank Russell at the end of 1999, where he held a similar role targeting the inter-mediary market.
However, his previous experiences as an innovator and entrepreneur will perhaps be the most valuable assets in his new role.
Having founded his own investment house, Countrywide Asset Management, he then co-founded The Research Department.
While his passions of claypigeon shooting and cars are now only pastimes, the fund management industry very nearly lost out to the motor racing profession.
Ewan was national schoolboy karting champion two years in a row and is possibly the only IFA salesman who can boast he has raced against the late Ayrton Senna. Alas, lack of sponsorship steered him away from karting and into the racy world of UK fund management.