Shortly before his untimely death at the age of 51, Succession Group CEO Simon Chamberlain gave an interview to Professional Adviser and, after consulting with his family, we now publish his thoughts on the UK's financial advice sector
Simon Chamberlain played a major part in shaping the financial advice sector as it stands today.
A founding partner of J Rothschild Assurance (now St James's Place) and the founder of the Thinc Group (now Bluefin), in 2009 he founded Succession, which today controls assets totalling more than £10.5bn.
A long-standing champion of financial advice, he was a natural choice for one of the first of Professional Adviser's ‘Adviser Champions' video interviews, which he gave shortly before his untimely death at the age of just 51. After consulting with his family, we now publish his thoughts on the current state and future shape of the UK's financial advice sector.
What do you see as the best and worst-case scenarios for UK financial advice?
A worst-case scenario would be if planning firms continue to give their assets away to unaccountable fund managers and platforms. Clients usually trust that planners are the controlling factor in looking after their assets. If money goes to a fund manager or platform, the client is part of that organisation.
Most, however, do not realise they are giving their money to someone over whom they have no control. I hope planning firms and advisers will have the confidence to look at how they can use technology or other routes to control their clients' assets.
The best possible outcome is a full understanding that we are moving to a service-led environment, which means full life planning, cashflow forecasts and understanding what is important to the client - peace of mind that they will not run out of money in their lifetime.
How did you get into financial services? And, if you hadn't, what would you have done?
Like most people in the 1980s, I graduated with few credentials and signed up to being a financial consultant, thinking I was going to be a management consultant. Eventually I realised what the ‘c' in the advert meant in terms of my salary. In those days, if you didn't sell, you didn't eat. I did my apprenticeship, learned how to deal with rejection - and how to get a message across to clients.
Ultimately, I ended up being one of the founders of J Rothschild Assurance, now St James's Place. My first company taught me how to sell, my second company taught me how to do administration and SJP taught me how to market and present a good story.
Had I not found financial advice, I would have gone into the law. Looking at what's going on in the world today - with Brexit, for example, where wealthy people try to buy influence to change things they don't like - the mass population needs greater representation, whether that is legal or political. If I hadn't become a financial adviser, I hope I would have become a public defender.
Who has been the most important influence on your career?
Ian Shipway. He recruited me, almost 30 years ago and gave me a truly fantastic grounding. He believes in a service-led business and says honesty will always prevail. He has acted as a mentor and friend to me throughout my career. He's my moral compass and I owe him a lot.
What do you think advisers are doing well? And what could they be doing better?
We are moving away from pretending to be stockbrokers. One of the scourges of the market has been too much of an emphasis on trying to beat the market and I think there is a greater understanding now about what is important to clients. If a client only needs a 5% return, say, then that should be observed. That is much more important than trying to get 20% and taking too much risk.
As for what could be done better, there is a sense the terminology has changed, but not behaviour - commission has become fees, for example, but advisers do not necessarily act differently. We haven't yet moved to a consultancy-type mentality.
Do you believe the public makes any distinction between phrases such as ‘advice' and ‘guidance' or ‘restricted' and ‘independent'?
Why are people trying to avoid the word ‘advice'? To my mind, it is because fund managers and product providers want to go directly to the public, but without having the liability for the advice. If they call it guidance, no-one can come back and say they are liable.
I am very happy for all our clients to hold Succession responsible for what they end up doing. The industry should not shy away from that.
How do you think the advice industry should go about attracting the next generation of advisers?
This is an important question. When I came into the market place, there were 250,000 advisers - today there are 30,000. On the other hand, there are so many more clients today. When I started, advisers had to find a client base - but the new generation will be very different.
As this latest generation retires, their client bases will be managed by people who are much closer to accountants and solicitors in their training and development. They will be managing existing portfolios, rather than having to ‘sell'.
We see a big opportunity for graduates and also for women coming into the marketplace - for example, lawyers and accountants who have left those professions to have children and are finding it hard to re-enter.
How would you define value for money in the context of financial advice?
Very simply. Doing what you said you would do. We use a phrase at Succession: "We only have one product." Our single product is to give clients peace of mind that they will not run out of money if they do what we say.
That is why we own our platform, why we have our own portfolios. We are not a fund manager or platform provider but we have what is required to deliver a single proposition. We will continue to service our clients based on their entry contract and will stay throughout their lifetime.
If you were head of the FCA for a day, what would you do?
I would get out of my office to visit thousands of small IFAs and try to understand whether these firms have the capacity to deliver a service forever. I believe there is a place for small IFAs. but I also believe those firms must be properly capitalised, and have the right resources to deliver to the client even if the individual planner is not around. I do not see a lot of that capital strength in the marketplace and I think that poses a threat.
Which character from history or fiction would you pick as an adviser champion and why?
Maggie Thatcher. Not only because I am a child of the 80s, but because she instilled a belief in individuals that it was OK to be successful, to make a lot of money - to do that for your family.
She also instilled a belief that Britain was OK on its own. We want to be partners with people round the world, but that is because we are partners, not because we need to be. The best relationships are those where people do not need each other, they decide to be with each other.
How can the advice sector best go about being its own champion?
This profession has so many representative bodies. They have contracted a little, but there are still too many and there is still too much debate about restricted versus independent and execution-only and so on.
We are all doing the same job - all trying to achieve the best outcomes for people and their lives. If we can be respectful of each other, rather than always trying to find an advantage, we would all be better off.
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