Navigating the money minefield
Financial planning isn’t what it used to be. The old days of sticking money in a savings account and putting off pension needs until the day of retirement are long gone. An internet-savvy generation of information-hungry clients is fuelling new approaches to money management.
Their desire for knowledge and control has been stoked by changes in patterns of work and the savings market itself, notably through new laws governing savers’ access to their own funds.
The industry has been forced to respond with its own ‘change agenda’ to deal with a customer base that is now more inclined to want advice throughout their lives, and with the instruments to it for themselves.
“It is no longer about one moment, the day when someone retires,” says Julie Scott, CEO of 1825, Standard Life Aberdeen’s advisory business. “People who never had to think about pensions are now having to do so.”
Those near to retirement now have more control over their pension pots, while younger people are more likely to have multiple occupations and move their money with them. As well as pensions freedoms, college fees and tax self-certification there is the steady introduction of auto-enrolment, which is forcing individuals to think earlier about their long-term financial needs.
Scott says these seismic shifts have demanded changes in the industry to help customers navigate their way through the money management minefield. In many cases, individuals research and manage their own affairs through online services, and that demands the industry moves with them.
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‘Young people in particular are moving at a different pace’
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“Our world is changing in terms of the things we now do for ourselves,” says Scott, “You would be naive to think digitisation will not be part of how we do things in the future.
“There seems to be a hunger for information and customers want to take more decisions and do more transactions for themselves.”
“Young people in particular are moving at a different pace,” she says. “They are more questioning and challenging. They have a different sense of purpose and attitude towards work.”
As for the older generation, pensions freedoms, introduced in 2015, offered the over-55s early access to their pension pots and created a new set of challenges for retirees and pensions managers.
“Instead of working for so many years and then retiring with a final salary pension or annuity, people have access to their whole pension pot and can make choices on how they use it.”
Companies such as 1825 have sprung up to meet this new demand for financial planning advice, a need made more necessary by giving greater control to individuals but also potentially exposing them to bad advice.
Research by Prudential found that 9% of over-55s said they have been approached about their pension funds by people they now believe to be scammers since the rules came into effect from April 2015. Offers to unlock or transfer funds are tactics commonly used to defraud people of their retirement savings.
It has focused the industry on ensuring individuals are given quality advice and appropriate safeguards.
Named after the year when Standard Life was set up, 1825 was largely the brainchild of Standard Life Assurance CEO Barry O’Dwyer who persuaded Scott to join the new business.
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‘We have bought companies for pace’
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She had worked for Standard Life early in her career and had moved to Royal Bank of Scotland to run its bancassurance business, moving into HR and leadership development, mainly in the US, and latterly on the customer experience agenda with CEO Ross McEwan.
She was looking for a new challenge when she met up with O’Dwyer who outlined his plan for 1825.
“Mentally I was hearing tick, tick, tick to what he was saying,” she says. The business was set up in 2015 and she joined as head of operations. Last September she replaced launch CEO Steve Murray who stepped up to a wider group role as managing director, commercial and strategy, and the newly-created role of chairman of 1825.
It chose to be a “restricted” business as defined by the Financial Conduct Authority, which means it is not providing “whole of market” assessment.
“It is hard to be whole of market as there are a lot of funds,” says Scott.
She is now forging a UK wide footprint for 1825, acquiring businesses which are prominent in their region. It made the first of six acquisitions within months of launch.
“We have bought companies for pace, to give us a national footprint as quickly as possible,” she says. “We have a couple of gaps and we are looking at opportunities.”
The company now has about 300 staff, of which 80 are planners advising 8,500 clients with £4 billion of assets. Scott says the target is to have between 150 and 200 through a combination or organic and acquisition growth, though this may prove a challenging task.
She says the company identified a “huge gap in the market” for advice but is concerned about the industry’s ability to fill it.
“I don’t think we as an industry will be able to provide enough advisers to meet demand,” she says.
PERSONAL CHECKLIST
Job: Chief executive, 1825
Birthplace: Glasgow
Age: 47
Education: Paisley University (Business and Economics)
Career highlights: Endsleigh graduate programme in Aberdeen; Standard Life financial planning consultant; moved to RBS in bancassurance, Aviva joint venture, HR, leadership development; Citizens Financial in Boston; returned to Standard Life with 1825, became CEO in 2017.
What is the best advice you’ve received?
From my mum: Always do your best. From my dad: When you order a gin and tonic, remember it is two gins and one tonic
Guilty pleasure?
Walking my dogs on the beach at St Andrews
Favourite restaurant: Aizle, Edinburgh
Other activities or interests?
I used to teach ballet
Glass half empty or half full?
Half full
Smart or casual wear?
I am a huge fan of dressing for the day
Favourite device?
I am a huge Apple fan. I love my iPhone and I have an Apple watch.
Claim to fame?
I had lunch with Neil Armstrong who was a guest speaker for RBS. He was very humble. He said he may have been to the moon, but he was just an ordinary guy who painted the fence and swept the yard.
Which three guests, past or present, would you invite to dinner?
My mum and dad. They were outstanding individuals.
Simon Cowell. There is something about him I like. He is not sugar-coated. He says what you are thinking.
….and I’ll be greedy and also invite Tom Jones.
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