It was a computer programme at school that first highlighted the actuarial profession as a prospect for Andy Bell.
Mr Bell said: “You put in what you were good at and your interests and it would spit out what it thought you should do. It came up with an accountant or an actuary, so I went off to Nottingham University to study maths.”
Graduating with a first, Mr Bell took that early advice and went on to become an actuary working for a large insurance company.
He explained: “I did the actuarial exams and I got through those quite quickly. I was working hard studying, but I was a bit like a chocolate teapot in work. Anyone who worked with me then probably wonders how on earth I managed to even set up a business let alone run it and grow it because I was pretty useless in those old days; I just wasn’t interested in what we were doing.”
Even though he was almost qualified, Mr Bell said that he ended up packing it all in and going to America for three years, on and off, to do tennis and football coaching.
He explained: “It was good fun, I did a bit of travelling in between and I was coming back in the winters and finishing off my exams. By then I had moved onto a small actuarial consultancy, where I first came across Sipps and Ssases.
But it was when that company was sold and he was faced with the prospect of becoming part of a big empire again, that Mr Bell decided to set up his own company.
He said: “I applied for a job before I set it up just to make sure that I was employable, and I got offered that job and so I thought the worst that could happen is that I would look a bit of an idiot in front of my friends and family.”
Mr Bell put £10,000 into the business as a loan with Nicholas Littlefair, who he had worked with at the consultancy firm previously, and halved his own salary at the same time.
“We set off with no real ambitions to take over the world,” Mr Bell explained. “We decided what we really wanted to do was trustee administration actuarial roles that linked to Sipps and Ssases and that was our focus in the early days.”
He continued: “We made commitments that we wouldn’t give investment or financial advice and we wouldn’t manage people’s money and by making those two statements it actually made us either friendly – or non-competitive, call it what you will – with both sides of the fence.”
Mr Bell explained that over the years, especially with the advent of the internet, the business has transformed from that to being an online provider dealing with large volumes. It has a white-label offering and has acquired both Lawshare and most recently MSM Media.
He explained: “What we did in our first five years, the bespoke Ssases and Sipps, has carried on and it is still a thriving part of our business, but it is never one that we have grown aggressively because we have always recognised that scale and a bespoke solution never go hand in hand. Where we have the scale and volume has been on the internet solutions.”
Determined to not be viewed as “just” a Sipp provider, Mr Bell said that the lessons that he learnt in the Sipp world are now helpful in the platform world.
He said: “You can look at Sipps and platforms in parallel, and you could argue that both should be impacted broadly the same. It is still early days yet for RDR – the industry is still trying to untangle itself and we have still got another phase. The first phase has had very little impact on what goes on in the platform or the Sipp world because that is just about a few less advisers. When phase two hits, which is probably going to be the early part of 2014, when we stop cash rebates and allow unit rebates and stop platform payments, that is going to have a further impact.”
Mr Bell admitted that there are currently “far too many” Sipp operators and adviser platforms competing for the advisers’ clients.
“There are probably 30 firms competing for the advisers’ clients and it is just not sustainable,” he said. “There were 120 Sipp operators at last count, but a lot of those are just doing their own thing to avoid having to farm out. They might have 300 or 400 schemes or something like that, which as a business in its own right wouldn’t be viable, but actually as an adjunct to a financial services business historically made sense.”
But with the new capital adequacy rules coming in, Mr Bell said we might be seeing that “tail chopped off fairly high”, as it will not make sense for those firms to carry on.
He said: “We have got to see where the rules settle, but when I look at them my view is probably contrary to most. There is an argument that the regulator could have gone further and put more capital requirements in place. The fact that anyone historically could set up a Sipp operator business before 2007 was always going to be a challenge that had to be addressed at some stage and what we are finding now that Sipps are regulated is the authorities are looking and thinking actually this just does not make sense. A lot of Sipp operators are just self-administering their own client bank and in a pre-regulated world that made sense, but now there is so much regulation on Sipp administration that those small firms are really going to struggle to have the resources to deal with it.”
At only 47, it is no surprise that Mr Bell said that he planned to carry on for a few more years.
He concluded: “The transition into the platform market has further enthused my position on a personal level, as there is only so much you can talk and write about Sipps. The fact that we are now in a slightly different market has given me a new perspective on the challenge.”
Amy Ellis is a former features writer of Financial Adviser
CV
1995 AJ Bell – Co-founder and chief executive
1993 Institute of Actuaries – Qualified as a fellow
1990 Small actuarial consultancy – Actuarial student/actuary
1987 Large insurance company – Actuarial student
