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Firing Line: Simon Markey

Firing Line: Simon Markey

Simon Markey, chief executive of the newly-formed mutual One Family, is determined to make his mark on the mutual sector.

He has a background in banking, having worked for Lloyds TSB for many years, and has also worked in private equity, on mergers and acquisitions, and made a bid for Project Verde, the former Lloyds Banking Group branches.

After becoming “disillusioned” with retail banking, Mr Markey has decided to bring his corporate expertise to financial mutuals.

He said: “A modern mutual takes the best of mutual values and matches these to the commercial capabilities of the corporate. Providing you can run the mutual efficiently as a proper business, you should be able to put the value that you don’t pay to shareholders back into the proposition to the customer.”

As chief executive of Family Investments – which formerly focused mainly on child trust funds and now junior Isas – he oversaw the merger with the smaller Engage Mutual, the provider of life cover and other products for the over 50s.

The result of the merger is the creation of One Family, of which the head office is in Family Investments’ base in Brighton, East Sussex, and the strategic plan is to cater for a wide range of financial needs at certain flashpoints in the family lifecycle.

Mr Markey said: “Since 2008, families have been impacted by a huge amount of change – they come under pressure at various stages of their lifecycle: education is more expensive, getting onto the housing ladder is more difficult, pension provision is more difficult to provide for than it has been, and long-term care has come under pressure.

“Each one of these things is where families come together to make decisions. The banks have been repairing their balance sheets and have pulled out of a lot of the product groups that families find valuable, such as first-time buyer mortgage.

“There is a gap between what families need and what institutions provide. We believe One Family is able to fill that gap.”

A large part of Mr Markey’s strategy is to build the business by spotting niches where other mutuals operate, and, where appropriate, make an acquisition.

He said: “There are 151 financial mutuals in the UK; 80 per cent of the assets are owned by the top five. So there’s a very long tail, and towards the end of that tail they can’t possibly have the scale to generate the profitability to reinvest in their organisation.

“Smaller organisations have to live by the same rules as the larger ones. The cost of doing that is high, so that is a burden.

“All successful organisations will be interested in looking at the M&A market for suitable opportunities. We believe consolidation is inevitable in the market we operate in, and it offers particular capabilities to enhance our product range.”

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