InvestmentsJun 14 2017

Firing Line: Verona Smith

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Firing Line: Verona Smith

The appointment of Verona Smith as head of platform at 7IM must have seemed a gift to the UK platform industry.

She came over to the UK from Australia 14 years ago, having already taken part in the development of wraps in Australia, and saw the industry start all over again in the UK.

She said: "When I came over here, it was comedy. It was so far behind the Australian market, I though 'You guys must be joking'."

She came into the platform market in the UK as a contractor, working for Legal & General, putting L&G products on the Cofunds platform. This was how she met the team at Cofunds, which she joined in 2006, eventually becoming marketing director and head of proposition. 

She said: "It was the right time, right place. I had been at Cofunds when it had next to nothing under management. When I left it had £60bn. But it was a good time to leave."

She worked for platform consultancy Platforum for a while before joining 7IM in 2013. 

The platform at 7IM is different to many others on the market because it was set up to help the company's own discretionary managers. It has since branched out to appeal to financial advisers, many of whom are already using the discretionary service, who then have automatic access to the platform. 

Ms Smith said: "It's not about the platform to have so many assets. It's about what kind of firm or client are they servicing. We service mass affluent, high-net-worth or ultra-high-net-worth. The average balance is £350,000, and average firm has £10.3m of assets. 

"At the end of the day a platform is how the adviser and the end customer experience the service that financial services gives; we support the advisers so they can give a good service to the clients."

An example of this is the development of an app, 7IMagine, that allows the customer instant access to their portfolio online. She said: "It's a different way for our clients to get engaged with their portfolio. It's all done with a few swipes: this is the value of your portfolio, this is how it's performed, this is an asset allocation and geographical mix. It's a much more engaging way of looking at your portfolio than a paper report."

The 7IM platform, which has £7bn under administration, unusually has its own technology team designing the technical underlay, with a team of 25 engineers in Edinburgh, which Ms Smith said gives the company flexibility to change the platform when they need to. Pershing acts as the assets' custodian.

Mifid II is one example where technical adjustments need to be made, Ms Smith said, with platforms having to generate data, especially in relation to complex or non-complex products, and this affects advisers who need to have done the relevant appropriateness test if advising on a complex product.

A more immediate issue in the platform market is the announcement of Vanguard's entry into the platform market in the UK. While it is only offering access to its own funds and there is currently no Sipp, Ms Smith said it would have a big impact in the D2C market, but not necessarily just on Hargreaves Lansdown.

She said: "It will be interesting to see how Vanguard will affect robo-advice start-ups. It will do one or two things. It will get more and more people engaged in investing and looking to see what is out there and what will suit them, but it will mean pricing dropping even further in the market place because they've come in very cheap."

She believes the option of having just Vanguard funds will not bother some people in the slightest, "because most people don't live and breathe this; they have lives".

She said: "Vanguard and robo-advisers are playing in the same space; with Hargreaves Lansdown you can buy anything, whereas a robo will find out a bit about you and say 'this will suit you'. With Vanguard, you can pick your own fund, you're not being told, whereas robo is saying 'this one is right for you'. To some people this is important, but for other people it's the fear factor: I don't know a lot about markets and I want some help.

"All this industry has overestimated how interested other people are and how much time they're actually going to spend poring over documents such as fund factsheets, because for most people they send them to sleep."

Looking back over her recent past, what does she think of Cofunds and its recent troubles as it tries to upgrade itself in the new world of wrap?

"I hope the problems aren't insurmountable," she said. "They service a segment of the market that needs servicing. I think they've got the right owner now that will invest, because that's what it takes. They've got a customer base and their number-one concern is to provide a really good service that people have signed up for."

For Ms Smith, her focus is all 7IM and making it more consumer friendly so that its business continues to grow.

Melanie Tringham is features editor of Financial Adviser

 

Verona Smith's career highlights

2013 - present: Head of platform, 7 Investment Management

2006 - 2013: Director of marketing, Cofunds

2003: Left Australia and travelled, including living in South America

1995 – 2002: BT Financial Group in Australia, latterly head of product development