Rockingham Retirement managing director Steve Hunt says that like many others in the business, he did not set out to have a career in pensions. “I’ve never met anyone in my life who said they wanted to go into financial services or pensions. It’s not something you go to your careers interview and they say ’what do you want to do?’ And you say ’pensions or life assurance’. It just doesn’t happen.”
But after 30 years in the business, he does not appear to regret the decision.
Hunt started his working life at MGM Assurance which was, and still is, one of the big employers in Hunt’s native West Sussex. He spotted a job vacancy there after leaving school and applied without knowing much about the industry. A 10-minute crash course with a neighbour who worked in the business taught him the difference between life insurance and life assurance and he hasn’t looked back since.
Hunt then moved into the world of consultancy, joining Mercer and quickly becoming immersed in the world of corporate pension scheme consulting, looking after the schemes of four companies.
Mercer was still doing things the old- fashioned way and he remembers, not necessarily fondly, working out GMP calculations. “It was like going back to the quill pen,” he jokes. “We still had paper schedules and all the accounts were done by ledger, pen and calculator.”
He adds, however, that while it may have been time-consuming, it ensured that he really understood the business. “The good thing was the knowledge I gained around pensions was really first rate.”
Despite this, the role was not the best paid and he was keen to progress.
He moved from consultant to in-house benefits manager and, at the age of 25, he joined Reed International as pension and benefits manager followed by a stint at the Varity Group (the newly renamed Massey Ferguson Group) as admin manager.
At the Varity Group Hunt was involved with the first contribution holiday ever taken by a UK company and later he also helped pioneer the use of bonus sacrifice at the company.
“The whole contribution holiday debacle was started by Massey Ferguson,” says Hunt, who has mixed feelings about the move. Although the closure of final- salary schemes is the cause of many of today’s pension problems, he says, without the move he believes Varity would not have survived.
The move was not popular with the unions at the time and he recalls having his offices picketed by union officials protesting the decision.
He says the unions knew more about pensions and understood their value than the management did. “I call it the iron curtain syndrome. You mention the word pension and this big iron curtain goes up. The number of senior executives I spoke to who really knew nothing about pensions but the union guys they knew pensions pretty well.”
Following a brief foray into the IFA world with P&G Bland in Leicester and a stint at Pearl setting up and running the pensions review team, in 2003 Hunt decided to set up on his own. “I’d say I possibly always had a bit of a problem with authority,” he admits. “I’ve always had a difference of opinion with managers in the past and did want to control my own destiny.”
His company was called Rockingham Retirement and business partner Gary Forster suggested specialising in the annuity business. As he had experience and knowledge of the sector, he decided to launch an online annuity broker and Annuity Advisor (one of the names that Rockingham trades as online) was born.
“I set up Annuity Advisor with a piece of software called WEB, which was free with a computer magazine. I think the domain name cost me about £20 and initially it was just me from the cupboard under the stairs.” Hunt started designing the website in November 2003 and by the end of January 2004 the business had launched and written its first piece of business.
In addition to Hunt and Foster, the business now employs 33 people, and receives 200-300 enquiries a week.
Business is a mix of direct enquiries and IFA referrals, but Hunt says Rockingham will be increasingly looking at the IFA market to grow the referral side.
Hunt says the retirement market is sufficiently specialised that it needs specialist businesses to look after it. He compares the business of an IFA to that of a GP, a good all rounder who should be the first port of call for anyone wanting advice. But he suggests that, like GPs, they should refer on people who need specialist consultancy.
“The knowledge of the retirement income market by IFAs is generally poor. And that is not a criticism, you wouldn’t expect a GP to have a detailed knowledge of cardio vascular surgery. We are specialists in the field, we’ve got three G60 qualified staff just on the phone on the direct sales side.”
To facilitate its plans, Rockingham recently announced the launch of a new annuity broking service for IFAs. Hunt says its Annuity Clearing House can broker the annuities of much smaller pension pots due to the IT systems the company has developed, which would not be cost effective for IFAs to do themselves. Hunt says there is no lower limit to the size of case they will handle and, in some cases, IFAs can get better commission rates using the Annuity Clearing House rather than transacting directly.
ACH is undergoing a trial launch before it officially launches on 1 September and although it is limited to only three providers initially (L&G, MGM Advantage and Prudential), Hunt says the intention is to offer a whole of market service, with all providers and enhanced options included.
But the plans don’t stop there. Hunt’s next idea is a solution to the problem of third-way annuities. He says traditional drawdown is expensive and too exposed to equities while standard annuities are not flexible enough and the third way providers have not got the pricing right.
Hunt’s solution is the Retirement Income Tri Investment Account. This is a product based on a free Sipp wrapper using a combination of three investments – cash, the Prudential with-profit Tip and a secondary life settlement fund – to provide security of income with low market risk and without the high cost of guarantees.
It is this sort of innovation that Hunt is confident will secure a bright future for his business.
Born: Shoreham-by-Sea, 1962
Lives: Near Oundle
Education: Boundstone Comprehensive School
Career: 2003-present: managing director, Rockingham Retirement; Pearl Assurance; P&G Bland; consultant, Dixons Group; admin manager, Varity Group; pension and benefits manager, Reed International; pension consultant, Mercer; MGM Advantage
Likes: Woodlands, music
Dislikes: Liars and cheats
Drives: Mitsubishi Animal
Book: The Exorcist by William Peter Blatty
Film: Singin’ in the Rain or Jacob’s Ladder
Band: Free or Pink Floyd
Career ambition: Would like to be instrumental in everyone in the UK getting a fair retirement income
Life ambition: Like to live in my own property in the middle of a wood
If I wasn’t doing this I would like to be…in a band