Mr Bell said: “I would have been working for Paddy Power and setting up the odds, rather than pricing insurance contracts. I’ve always been a square peg in a round hole.”
However, he added that training to be an actuary, and working as one in the early part of his career, had given him a boost.
He said: “Having the actuarial qualifications does open doors and gives you some respect. You’ve still got to earn it, but it’s a good starting point.”
AJ Bell began in 1995 as an actuarial consultancy, but quickly moved into self-invested personal pensons – the “full-fat” version, according to Mr Bell – a product he had been working on in his previous role.
Then in 2002 the company launched Sipp platform, Sippcentre as the product became more commoditised. Eventually this was broadened out to become an investment platform and renamed AJ Bell Investcentre.
The company has also bought a stockbroker, which it turned into a retail online stockbroker, and it owns a consumer investment magazine.
It has done well: last year it made £15.5m profits on revenues of £57m, and Neil Woodford took a stake in the company as an investment in unlisted shares for his new fund.
Mr Bell’s relationship with Mr Woodford began in the days when the latter was still at Invesco Perpetual.
Mr Bell said: “Neil Woodford and Mark Barnett bought unlisted shares for their funds, and we were quite attractive to them. We were in financial services and growing very quickly – we were profitable and paying a growing dividend. I don’t think there are too many companies that tick all tof those boxes.”
The Invesco fund took a stake in the business, and once Mr Woodford left to set up his own firm he again took another stake, paying £21m. Combined, the Invesco and Woodford stake amount to less than a controlling stake in the business, and although it is a significant slice Mr Woodford does not have a place on the board.
Mr Bell, who still owns nearly a third of the business, said the deals helped him out of a situation, whereby he could remunerate senior management and say no to more conventional options, such as a stock market listing or a sale to an institution.
He said: “I would like the ability to make my own decisions without having inexperienced analysts telling me how to do my job”
I would like the ability to make my own decisions without having inexperienced analysts telling me how to do my jobHe said: “I just concluded that I was unemployable. I enjoy the industry and selling out would have felt I would have been in the truest sense selling out.”
Mr Bell is ploughing on, keeping the business on track and adapting the company to the changing business environment.
One of the changes he has witnessed since setting up the company is the altering perceptions of Sipps. Back in the 1990s, and early 2000s they were the one bright spot on the pensions landscape. Much of that has changed now, not least due to some of them investing in unsuitable assets.
He said: “An awful lot of Sipp advisers traded on the back of the froth and excitement, but what the market has realised now is that advising Sipps is not the easy gravy train people thought it was. It’s hard work and it’s not without its risks.”
Mr Bell believes there should be a more formalised permitted investment list from the FCA – a clearer statement than that used for capital adequacy purposes. In addition, Sipps can be useful for pension freedoms.
He said: “If you look at pension freedoms, and investment flexibility, you will end up with a Sipp in some form. You will end up with a Sipp that looks very different to when it started 20 years ago – these are pension wrappers that have flexibility on investments,” he explained.
But the world keeps changing on the political front; changes of which Mr Bell does not completely approve of.
He said: “Pension policy is too important to allow the politicians of the here and now who will not be here in three or four years’ time to make decisions on tax relief. We’ve been calling for a pensions commission where the framework for pensions is set in stone.
“If people are being asked to invest over the long term, they should get some form of certainty, and I don’t think any government will give them that.”
The recent fuss over pension tax relief is one example where pension policy became subject to the government’s whim, said Mr Bell and, because of the uncertainty, ended up costing the Treasury £1.5bn, he believes, as investors thought it was about to be abolished.
Agreeing with other comments that the Lifetime Isa is just another variant of the pension Isa idea, Mr Bell said: “The Treasury has done a lot of thinking on the pension Isa, and I don’t think they wanted to scrap that work.
“The Lisa is a test. If it takes off, they will have some evidence to support their argument to scrap tax relief. If it dies a death, they will bury it.
“In isolation I think it’s a good product, but it’s started to overcomplicate the Isa regime. We need to have a single Isa product that has different rules through the life of the customer.”
Mr Bell is mindful that many of his key relationships are with advisers, and this is the reason he bought MSM Media, which owns Shares Magazine. It employs seven journalists, some of whom provide content to put on the AJ Bell website. Data created by the magazine is also sold.
The idea is that AJ Bell can build a relationship with advisers by offering them free information.
Mr Bell said: “We’ve always been seen in that light with advisers, and we don’t charge them for that information. That gives them confidence and trust in what we do, and a platform to do business together.”
Melanie Tringham is features editor of Financial Adviser
ANDY BELL’S CAREER LADDER
1995-present co-founder and chief executive of AJ Bell
1990-1995 – actuary, DJT Group
1987-1990 – actuary, Royal Life
1984-1987 – degree in mathematics, University of Nottingham
