The American has been at Fidelity ever since he entered financial services in the mid-1980s from his undergraduate degree in the US, and having taken on a new role last year, it doesn’t look like his loyalty is about to wane.
Mr Shea assumed the role of head of FundsNetwork, Fidelity’s fund platform, after David White left the role last summer.
Platforms are very much under the spotlight at present from the regulator, advisers and the media as the pressure intensifies on fund supermarkets, such as FundsNetwork, to deal with their legacy book and essentially bring an end to trail commission for advisers by April 2016, and therefore implement adviser charging systems.
The businesses have also had to deal with a ruling from HM Revenue & Customs that rebates outside of tax wrappers are subject to tax and pressure is mounting for them to broaden the types of products they offer and they also face calls to make sure re-registration between platforms improves. Fund supermarkets are also facing increased competition from wrap platforms which have worked under an adviser charging model for years – something the likes of FundsNetwork has had to spend time and money implementing.
“You’ve just said a lot there,” Mr Shea exclaims as all the hurdles platforms have to jump at present are raised. “What has struck me is that the amount of change at one time is phenomenal. The ground is shifting for everyone that is in the value chain – platforms, fund providers, advisers and end consumers themselves. The biggest thing is the level of change that is happening at such a quick pace and how you bring all the people along on that journey of change.”
Mr Shea adds the platform has, for the past few years, been focused on introducing technology needed to make sure it was ready for the RDR and considers the business to be “fully compliant”.
He does have one bugbear though, which he offers freely, and that is re-registration – or the movement of a client’s assets from one platform to another. “I guess I’m asking what the overall objective is and to me it is to deliver good outcomes for end consumers and advisers who have every right to expect re-registration to be done in a timely manner,” he riles. “We made a considerable investment in automating re-registration and what has been disappointing, if I am perfectly honest and frank, is to see other parts of the value chain not making similar investments.
“Some platforms have not made the investment but the area I am particularly concerned about is the asset managers and fund partners.”
Mr Shea confirms he is “working behind the scenes” to encourage the industry to improve the speed of re-registration and says he would “call on members of the industry to rise to this challenge”.
In spite of the amount of change though, Mr Shea is well-placed to deal with the travails of grappling with the platform beast.
After a six-year stint as an accountant for Fidelity straight out of university in Boston, two years consulting for the company – during which he completed his MBA – six months in Luxembourg and then three years in Bermuda, Mr Shea was packed off to Asia to become chief operating officer.
It was in this role he was involved in introducing the FundsNetwork platform to the Asia Pacific region, including in Taiwan and Hong Kong.
“In much of Asia, as in Europe, banks controlled distribution through closed architecture or increasingly open architecture and turned the tap on or off depending on what was happening,” he says. “We were the first platform in Taiwan that was non-bank, selling our own and third-party funds. It was interesting because I had to explain what the platform was, how to make it work and then sell it.
“It was a terrific experience and lots of hard work as I had a period where I was selling equity neutral funds to Chinese investors, during a bear market, in English,” he laughs. “It was good fun.”
Mr Shea came to the UK in 2005 in an operations role which involved supporting FundsNetwork, meaning his new role is not completely foreign to him. “I’ve had experience of Fidelity’s platform in the US, I launched one in Asia, I was involved in the Australian fund business where we sold to platforms and in an operations role I was involved in the acquisition of a German platform,” he exclaims.
“We had the 13th largest platform in the market and I had to do the due diligence on a competitor, analyse what gaps we needed to close and what was necessary for us to be in the top-three position we like to be in. We bought the second-largest platform in Germany and I was involved in looking what it offered, how it worked and then merging the businesses. I still have things to learn but what I have learned from other countries means I can bring something to this role. I have been supporting the UK platform for five years so leveraging that should give me a head start,” he chuckles.
Mr Shea’s movements across the globe with Fidelity have meant his son and daughter have served several “tours of duty”, as he calls them, and his wife, whom he has been married to since 1989, has also travelled with him.
“I dragged my wife away from her job in defined contribution in 1993 to join me in Bermuda, where our son was born in 1995 in the only hospital on the island,” he recalls.
“It is a great place to live and raise children. Then my daughter was born in 2000 in Hong Kong so both of my children have learned a bit of Chinese along the way and lived in Bermuda, Hong Kong, Taiwan, the US and the UK.”
Mr Shea notes this amount of travelling is “very different” from his childhood and the sense of sticking with one thing for a long time comes through when he reveals his parents still live in the house he was born in the state of Connecticut.
In spite of much of his youth being spent on the eastern seaboard of the US, Mr Shea has a passion for a quintessential English sport.
“I’m a rather unusual American in that I played rugby,” he reveals. “I played it for roughly 18 years as a kid through to a men’s club, so this fits well as an interest in England. I discovered the sport at prep school as there was French kid there who one day took this funny-looking ball out of the boot of his car and started running around with it.
“We asked him if he wanted to start a team and we ended up as one of four teams in the state,” he says, adding: “We had to play each other multiple times in the league!”
As the relaxed interview at Fidelity’s Cannon Street offices comes to a close, Mr Shea is quizzed on how FundsNetwork is positioned in terms of dealing with the changes in the industry and where its focus is beyond that.
Mr Shea acknowledges he has a one-, three- and five-year plan. He admits that in the next year, the company will be increasing its sales force in the field, will be focusing on its multi-asset solution Navigator and launching a pension.
Beyond that, he won’t be drawn on specifics, except to say that “we are quite sincerely going to be investing more in FundsNetwork than ever before”.
“Platforms are a cornerstone of Fidelity’s business model in multiple geographies and we are here to stay.” He agrees some of the smaller wrap platforms have continued to gain market share but says there is “still a pretty big gap” between the top-three platforms and the rest of the 31-strong UK platform market.
It also seems like FundsNetwork will continue to cement its position through organic growth.
“We never say never to merger and acquisition activity but my plans don’t include acquisition of platforms or component parts,” he says.
Mr Shea adds that he is also actively collecting feedback from advisers to make sure the client experience and usability of the platform stands out and to ensure its market position.
“We are using customer feedback to drive the agenda and we don’t sit in an ivory tower thinking we know best. I am listening actively to advisers and building a plan based on what they are saying.”
