Paul Feeney, chief executive of restricted advice firm Old Mutual Wealth, has revealed his ambitions for his company as it prepares to list on the London Stock Exchange next year, telling investors his model has much broader appeal than independent advice.
Mr Feeney said the company was preparing to "come out of Old Mutual's shadow" in a talk to investors today (15 November) about his plans for the business.
He told investors Old Mutual Wealth, which will demerge from its parent company after the full year results for 2017 are published next year, represented one of the leading propositions in one of the largest wealth markets in the world.
This growth, he said, had been achieved with "one hand tied behind our back" given the improvements needed to Old Mutual Wealth's platform, which he said would be addressed during the re-platforming the company has invested in.
During his presentation he said Old Mutual Wealth, which will rebrand as Quilter after the demerger, focuses on people with between £100,000 and £5m in liquid assets, made up of around 5m UK adults.
Mr Feeney said: "These markets are already growing and we are well placed to take advantage of that growth for three reasons.
"The first is the need for financial advice. There are just 25,000 advisers to cover the entire adult population of the UK. Advisers are outnumbered six to one by lawyers and 12 to one by accountants."
He said the second reason for Old Mutual Wealth's expansion was the strong growth forecast in global asset management flows. Thirdly, pensions and investments are consolidating onto platforms.
Mr Feeney said: "The UK platforms market continues to grow. If you want to win in UK wealth management you have to win in the retirement space. Across that space there is a huge flow out of traditional life and pension products."
Old Mutual Wealth currently has assets under management and administration of £107bn and more than 900,000 clients, with 200,000 of these coming through its "advised channel" of 1,582 restricted advisers.
Mr Feeney said Old Mutual Wealth views restricted advice as the best option for the "vast majority of situations".
He said: "There will always be a role for truly independent advice, particularly with someone with complex needs, but it is only for a small minority."
Mr Feeney added that once the demerger takes place, Old Mutual Wealth will focus on "business optimisation" following a period of building the company.
This would include focusing on growing the company's profit margin, currently at 28 per cent, by driving business efficiencies.
damian.fantato@ft.com
