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Tim Sargisson

IFG Group has bought several companies in the pension sector, notably Sipp specialist James Hay, and is looking to build up IFA business and strengthen its wrap. Interview by Gregor Watt

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Many executives manage to combine several different roles across different companies but Tim Sargisson must have a hard time trying to keep up with his range of responsibilities.

At the last count, Sargisson was managing director of four different businesses within IFG Group – James Hay, IPS Partnership, IFA business IFG Financial Services and Jersey-based James Hay Insurance Company.

It is the James Hay and IPS Partnership businesses that IFAs will be most interested in. In March, IFG Group completed the acquisition of James Hay from Santander to become the biggest independent Sipp provider in the market and Sargisson has big plans.

He says the IPS brand will be phased out in 2011 to capitalise on the James Hay brand but behind the scenes he says the plan was always to run the two businesses side by side to avoid costly and timeconsuming IT problems.

“At some stage, it will be run under the James Hay name but sitting behind that will be two separate businesses.

“We came at this with the view that we would not integrate. We have run them as two completely separate businesses. To try to crunch the two together, they would have both fallen over and we would have ended up with one unholy mess.”

Sargisson says 2011 will see the current range of six different Sipp products across the two brands reduced to just two – a low-cost e-Sipp with a limited investment range based on the current James Hay business and a full Sipp based on the current IPS Partnerships Sipp.

“We will have two Sipps, the e-Sipp and the full Sipp. The e-Sipp will have a limited range of investment options and the full Sipp will allow you to access any HMRC approved product, subject to very stringent due diligence process to see whether we can let it in or not.”

Sargisson also says that despite industry speculation, the business is determined to hold on to the wrap platform that IFG group also acquired from Santander.

He says they did consider disposing of the wrap part of the James Hay business but decided that their and their clients’ interests would be best served by holding on to it.

“We looked at it and spoke to various interested parties but one of our biggest concerns was execution risk. We felt clients might be disadvantaged if we sold it on to some one else. From a TCF perspective, we felt it would not be in the clients’ interests to sell it.”

Despite suffering a bit from neglect, Sargisson says the wrap is a good product and despite some uncertainty over what specific requirements the RDR will make of wrap providers, he says the platform’s ability to rebate commission already makes it RDR-compliant.

“The market has moved more towards the wrap proposition in the last two years. I do not think Santander really gave it the level of attention it should have done, so it fell behind a lot of its competitors, but we are working on the wrap at the moment and think that by January we will have a very strong wrap proposition.”

Sargisson has been MD of the IFG pensions business since he joined the company in 2002 and has been heavily involved in pensions since his entered financial services after university.

After a stint selling advertising in trade paper Accountancy Age, Sargisson started his career in financial services with NPI, joining the company as a graduate trainee in 1986.

“It was not necessarily about selling pensions. I was reading a financial publication and became aware that pensions were becoming deregulated. There seemed to be a lot of opportunities.” Sargisson says he enjoyed four very successful years with the business. However, his concerns for the business led him to look for new opportunities, this time in the independent advice sector.

He says: “I was concerned that NPI, being a small player, did not have much of a future. I did not expect the Australians to screw it up the way they did but that is another story.”

Instead, he joined IFA Lucas Fettes in 1990 and stayed with the business for 11 years, eventually becoming a board member and being responsible for the group pension business.

After a short stint with Smith and Williamson, Sargisson joined IFG Group in 2002 as managing director of the IPS Partnership which the Dublinbased financial services group had recently been acquired.

“They had bought Pensions Associates Ltd in 2001 and needed someone to run it. I had always wanted to run my own business, I thought I could do a better job than some of the people I had worked for and wanted to prove it to myself.”

The pension business will continue to form the mainstay of the IFG business. In January, IFG chief executive Mark Bourke said the UK businesses would, in future, account for 60 per cent of the group’s turnover, up from 40 per cent at the time.

Sargisson says this increase will be due to combination of efficiency savings, such as the combined joint business development management team recently introduced to work across both the James Hay and IPS products, and new growth.

He expects part of the growth in business will come from the greater penetration of the IFA market that James Hay’s size will bring.

“We expect to reach out to IFAs that we have never had any dealings with. IPS was very parochial. It was run out of Bristol, London and Manchester and that was our hinterland. Now we have a reach right across the UK.”

But he says the Sipp market still retains potential for substantial growth.

“What will continue to drive Sipps is as a consolidation vehicle. As Resolution start to get their teeth into more and more companies, the ability to consolidate those zombie funds into a single vehicle to be run though a DFM-type offering, that is where the IFA can add value and that is where Sipps come in their own.”

Another avenue of growth is further acquisition and Sargisson says “we are always open to having those discussions”.

Sargisson admits there are some areas of the James Hay business, such as the administration, that need attention but says the decision to keep the James Hay brand and the wrap business is a demonstration of IFG Group’s commitment to the IFA market.

“I do not want to beat up Santander because that wouldn’t be fair. They inherited this business as part of an acquisition of a much bigger company, Abbey National. As part of these deals, you sometimes aquire something you do not understand.

“The key lack of understanding from Santander was distribution, which we have always understood as being absolutely crucial. You have got to provide good service, conflict-free, through the IFA and if you don’t do that you don’t get business.”

Born: In a place where cousins can marry
Lives: Hertfordshire
Education: BA politics and economics
Career: Started selling ad space and then made the move into selling insurance
Likes: Selling ad space
Dislikes: Selling insurance
Drives: Mercedes convertible
Book: Heart of Darkness by Joseph Conrad
Film: Apocalypse Now
Album: Kind of Blue by Miles Davis
Career ambition: Not to follow my father into selling insurance
Life ambition: To live in Whistler, a ski resort in British Columbia, Canada
If I wasn’t doing this I would be..A ski instructor

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