Financial services is a sector in constant flux, but few have been as buffeted by the changes in recent years than Martin Jennings, chief executive at Parmenion.
Jennings joined the platform and discretionary fund manager provider when it was part of Aberdeen, a FTSE 100 company, and was there when it became part of the even more complex Standard Life Aberdeen, before being sold to a combination of private equity and AssetCo, the wealth management consolidator founded by Martin Gilbert, formerly of the Scottish fund manager.
In a world where some of the other firms may have to cut costs, we are already profitable.Jennings is also one of the last men standing from the earlier age of platforms; he did not found Parmenion but was an early employee of Axa when the wrap platform was created; most of those around in the earliest iterations of the platform universe have moved to retirement or pastures new.
Of the changing shape of the ownership of Parmenion, he acknowledges that being part of the Aberdeen Standard Life group that owns two other platforms was sometimes restricting, as his outfit “had to fit within the wider strategy of the group”.
He adds that many of Parmenion’s clients “asked us to do stuff, and we were unable to do it because it would be clashing with Wrap and Elevate platforms; now they were very good shareholders in other ways, but as an independent entity, we can [now] do those things”.
Some platform people are evangelists for technology and for the future. The newfound freedom has hardly gone to Jennings' head though; he says there will not be a dramatic shift away from the core services – the focus will remain on “doing what clients ask us to do”.
And among the things he has no interest in doing is “competing on price” or fighting against the rising tide of white-label platforms.
But he does give some hint as to where he sees growth by remarking that under the previous ownership, Parmenion was viewed more as a discretionary fund management solution, and less as a platform for advice firms.
He wants this to change, and his background is very much on the platform side of that line.
Jennings says his firm is in robust financial health, and despite the tough market conditions he says: “We don’t need to cut costs now. Our teams are all trained in multiple areas of the company’s operations.
"So right now, for much of the industry, and for us, it may be that there isn’t that much new business around, but if we need to we can move the new business team to other parts of the business.
"Higher interest rates and the rising cost of money impact everyone in financial services, but it may be that the biggest problems will be faced by the unprofitable recent entrants into the market.
"The cost of acquiring a new platform customer can be very high, and in a world of higher interest rates there is a greater focus on profit.”
Parmenion itself recorded a profit of £4.6m in 2021, having lost money in the three years prior when it was owned by Aberdeen.
Jennings joined Axa as a marketing professional having initially completed a marketing degree, and when the platform was launched he switched over, so was in at the birth of the original Wrap platform, before moving to platform technology provider FNZ, where he saw the industry from the other side, with the platforms being his customers.
In terms of how this informs his thinking now, he says: “Most advisers leave a platform because of poor service. Yet when they choose a new platform, they can’t do it based on quality of service, because they haven’t yet experienced the service, so they do it on price, because everyone says they have good service. So where can service be compared?
"So it might in terms of operating models and data. I think the pandemic has moved the technology along. One of the advantages we have is that we use our own technology – we are not in a queue behind any other firm when we want to get something done.
"This means we are scaleable and it doesn’t matter if we have 100,000 clients or 200,000 clients. But we are not trying to be all things to all people in this market.
"Other platforms might be a bit more full service than we are – that’s not the bit of the market we are in, we are not trying to do everything.”
If being part of Aberdeen was something Jennings found quite constraining from a business development point of view, he says the current owners “are there to help us but not to run the business”.
Gordon Neilly, a long time Martin Gilbert fixer, represents AssetCo’s interests on the Parmenion board. Jennings will not be drawn on how involved the shareholders get, but says: “I can talk to them when I need to talk to them.”
Gilbert previously told FTAdviser he “wishes he owned more” of the Parmenion business.
Among the recent activities of the firm have been an acquisition of a wealth management firm in the Midlands with £1.9bn of assets, and the launch of a range of environmental, social and governance-based model portfolios. The company also opened its platform to other portfolio providers.
At the end of 2021, the platform had assets under management of £9.7bn.
Jennings says all of the above is part of the plan to “grow as quickly as we can. We think there is a transformation happening in the UK wealth market, and we want to be part of that. We want to be a major force.
"Right now, the platform industry looks like a tough place to be. I would imagine when all of the different firms produce their numbers for this year, there will be a lot of red ink in terms of net outflows, and probably there will be for us as well.
"But none of that takes away from the long-term growth opportunity in our market. And in a world where some of the other firms may have to cut costs, we are already profitable.”
david.thorpe@ft.com
