CompaniesSep 10 2014

Firing Line: Alex Morley

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Alex Morley has big plans for Sanlam Wealth Planning, and is optimistic that its ethos of “decency” and not being for sale will solidify its future. The chief executive, who took over from Nigel Speirs as part of the February 2014 shake-up, is keen for his tenure to be associated with focusing on consumer needs, which was something he said had eluded the majority of financial advisers.

One of the many differences between Sanlam Wealth Planning and other financial advice ­services, he added, was the “rigorous and sen­sible” processes put in place to ensure that a “lucky pin” is not used to find suitable products. Although not done purposely, Mr Morley said a lot of well-meaning advisers in the past had tried too hard to over-deliver, and in the process had recommended some “dreadful” solutions.

Following his appointment, one of the first things the former English Mutual chief executive pledged to do was significantly increase the firm’s adviser numbers to between 250 and 300 by 2017. In retrospect, however, he said that attracting the right type of people had developed into the biggest challenge of his new role, owing to there not being enough advisers out there to match his high expectations.

He added: “We are based in Bristol, which is a financial services hub, but finding the right people is tough. We currently have about 100 advisers and are looking to take on more, but we turn down more advisers than we take on. The main things we are looking for is decency and client centricity. For us, a good adviser is not someone who writes £300,000 a year. All we have as an organisation is our clients, and we do not view them purely as an income opportunity.”

Because of these recruitment difficulties, Mr Morley said it was important not to set concrete targets, if that meant later having to compromise the type of candidate hired. But while some financial advisers have complained about not wanting to employ younger people with little life experience, for Sanlam Wealth Planning the ­hiring of youth represents more of a benefit than a drawback.

With the average age of financial advisers reaching the mid-50s, Mr Morley said a massive issue in the profession right now was the trend of advisers retiring before their clients. Leaving a client in such a period of financial importance had caused a lot of “discomfort”, he claimed, which is why clients of Sanlam Wealth Planning were more than happy to deal with advisers of a younger age.

In fact, despite suspending its graduate scheme earlier in the year to focus on the merger with English Mutual, Mr Morley claimed that the same scheme will be relaunched in the middle of 2015. He said it was paramount for Sanlam to develop the next generation of advisers, given that networks and firms up for sale would not be interested.

Despite previously being an IFA and the proud director of a one-man band, the latest happenings in the profession mean that Mr Morley now fears the worst for this breed of adviser. He predicted that most of them would switch to a network or at least be stripped of their independent status because their business models were no longer viable.

He added: “The idea of an independent financial adviser is very nice and quaint, but it is no longer sustainable when you are reliant on third parties and have PI insurance issues. If you outsource products and services to other providers and rely on PI cover, which tells you what you can write and how, then how is that independent?”

Drawing from personal experience, Mr Morley said that when he ran English Mutual, the business operated on a year-by-year basis and was dictated by the PI renewal dates. And judging by the current state of the PI market, he predicted that the great insurance crisis of 2011/2012 could soon return, which would damage the business prospects of advice firms that cannot self-insure.

With all of this uncertainty facing the industry amid mounting PI costs, he said that many clients may be fearful of adviser firms folding and prefer to go to a company that is accountable and not outsourcing investments to a third party. However, he said that this had nothing to do with the perceived negativity surrounding the term restricted, which was simply a “red herring” in the profession.

He added: “The terms independent and restricted will fall away and have less significance. It is a red herring. Consumers are not concerned about it; it is more of a concern for IFAs.”

My Morley was quick to praise the retail distribution review for “shaking out the rubbish” from the profession, and defined regulation as the industry’s “friend”. Although it was still too early to say whether RDR had been a success, he was pleased with how it had created a “barrier to entry” and felt that this made up for the expensive nature of increased regulation.

He said: “In the 1980s and 1990s there was an influx of people who should not have been advisers, which was a result of weak regulation. We now have a high barrier of entry. It is expensive, which is disappointing, but it is good that it has shaken a lot of the rubbish out of the industry.

“Regulation is our friend. We know what happens in markets that have not been regulated. We have a set of rules that are fairly clear and the regulator is listening, which is a good thing. As a profession we are starting to understand ourselves, but I am still concerned that a lot of organisations just see consumers as an income opportunity, especially by consolidators who sell client assets to the highest bidder.”

Daniel Liberto is a former features writer at Financial Adviser

Career ladder

October 2013-present: Chief executive, Sanlam Wealth Planning – the merged English Mutual Group and Sanlam

August 2012-September 2013: Chief executive, English Mutual Group and director of Sanlam Private Wealth

2001-2012: Chief executive and owner, English Mutual Group

1996-2001: Managing director and adviser, Morley & Co IFA

1988-1996: Appointed representative, Colonial Mutual

1987-1988: Agent, CIS