Old Mutual Wealth is happy for its competitors to overtake it on robo-advice, Richard Freeman has said.
The company’s chief distribution officer said the provider is instead focusing its resources elsewhere.
“We see technology as a longer term issue,” stated Mr Freeman. “We are not interested as much as perhaps we ought to be. We very much stand for face-to-face advice but it will be interesting to see how that landscape moves.
“We have to decide on our priorities and if you really want to get ahead in technology you are talking about many millions.
“That might mean you are behind some of your competitors, but you have to accept that.”
Mr Freeman pointed out this does not mean Old Mutual Wealth will not be investing in technology at all, rather it will focus on making gradual updates to system such as client portals.
Mr Freeman also noted the decision to go through a demerger, turning Old Mutual Wealth into a separate company, would probably lead to a pause in large projects.
This ‘managed separation’ of the group - splitting up Old Mutual Emerging Markets, Nedbank, Old Mutual Wealth and US-based UM Asset Management by the end of 2018 - is aimed at maximising shareholder value.
At the end of June, the group confirmed plans to list Old Mutual Wealth on both the London and Johannesburg stock exchanges.
Mr Freeman said at the moment he was “wary of doing anything too big” because of the need to understand the direction of travel. “We will probably batten down the hatches for a while, but there has been no decision to stop doing things.
“We are going to be a standalone business and that could change some of our strategy.
“I think our advisers see it very much as a positive step. There have been advisers asking what is in it for them and whether they will get shares, but we cannot answer that yet.”
He added as far as the company’s senior management was concerned, they would prefer Old Mutual Wealth to be listed on the stock market rather than sold on, but he acknowledged difficulties in the timing of this.
“Senior management would prefer a listing but Brexit could have an effect on that,” added Mr Freeman.
“I think the timing of it will be hard if we go into recession because it will be hard to get a listing away for a big company like this.”
