What are the most pressing issues you’ve observed in your first year in the job?
Having worked for the International business for 26 years I was already well positioned to understand our strengths and the challenges we face. I have spent the last year travelling around all the regions in which Old Mutual International operates, getting underneath the bonnet of what we really do, and I can honestly say that I am immensely proud of the talented people we have in this business, and the real desire they have to help advisers and customers.
We all know the global regulatory environment is changing at pace, and each region is steadfast in their determination and effort to really help advisers transition and adapt. The feedback we are getting from advisers is positive, they can see the benefits of transitioning, and this will then encourage more advisers to follow.
We recognise advisers need support to help them understand and manage the effects of changing regulations, and this is a clear priority for our business.
What are your key observations on the international financial market and how does it compare with the Middle East?
A common thread across all markets is that client needs are evolving; clients can access more information online, are more mobile, and expect greater value, access, transparency and flexibility. The regulatory environment is clearly different in each region, and that will determine the parameters in which the adviser needs to do business. However, client expectations go beyond this, and advisers are having to evidence the value they add in order to compete effectively and attract and retain new clients.
In the Middle East and Europe we predominantly focus on expats, who are looking to build wealth whilst overseas, perhaps to fund their later retirement or to cover the cost of their children’s or grandchildren’s private education. There is a real desire for solutions to be portable and tax efficient for those who want to return to their home country, move to another country at a later stage or retire overseas.
In Hong Kong and Singapore a significant amount of wealth is held in first and second generation hands. As this growth builds, the need for efficient wealth solutions to help with estate and succession planning is increasing. High net worth individuals want control and discretion over how they pass on their wealth. Those clients’ needs have evolved and solutions should now focus on helping clients grow their investments whilst making it easy for wealth to be preserved, and transferred to beneficiaries.
Trust and estate planning continues to be a core area of interest across all markets. In Hong Kong and Singapore for example trusts are often favoured as a wealth transfer solution as they can help control the distribution of assets to the assigned beneficiaries on death, and details of the trust are not subject to public record.
What makes the Isle of Man different?
We have been operating in the Isle of Man for over 30 years now, and we are one of the biggest employers in the financial sector.
The Island has attracted a number of financial services providers who, like clients, are drawn to jurisdictions that can provide stability, and can provide an entrepreneurial and business friendly environment, which enables them to compete in the global market place.
The Manx Insurance Association states there is £67.3bn in funds under management (as at 30.6.2017) held by life companies on the Island.
The Isle of Man is a reputable jurisdiction. It was an early adopter of transparency; adopting ‘tax information exchange on request’ before 2009 and the ‘Common Reporting Standards’ in 2013. It now provides full automatic exchange of tax information with EU Member States, the UK and the United States.
With this in mind, we are confident the Isle of Man will continue to be a safe jurisdiction for clients to hold their money and we believe the Island meets the standards required for it to be deemed transparent and co-operative.
The Government is also taking bold action to raise the bar within international markets through its Conduct of Business Code, which we are fully supportive of.
What is your research telling you about the market? How is Old Mutual International adapting its proposition to meeting changing adviser needs?
Firstly, the market is evolving and regulatory change is helping to bring about better client outcomes.
Secondly, whilst advisers are generally feeling positive about the changes and the benefits they will bring the clients, many are feeling nervous about how they can demonstrate the value of their advice to clients.
Even in the UK, where RDR was introduced over 5 years ago, many advisers will still say that justifying the cost of advice to the customer is often a challenge.
However, provided the adviser is focused on the needs of the client, and a robust advice and investment process is followed (perhaps investment advice is outsourced) it will be easier to demonstrate the value of advice provided and how this will lead to a better outcome for the client.
Previous perceptions that advice was free have not done the industry any favours. An increasing number of international advisers are becoming highly qualified, and have the same credentials as other professionals, such as solicitors, and can offer an important and valuable service to clients.
We are supporting advisers navigating through the changes with ‘Future Fit’ . To help them with the transition, we are providing them with online resources and downloadable materials that they might need.
Looking forward to 2018 – what will be your key priorities and areas of opportunities? How will you differentiate yourself from your competitors?
One of our key differentiators is our technical strength and knowledge – we want to keep this going and ensure we keep up-skilling our people in each region so we can carry on supporting advisers in complex matters of financial planning.
A key priority for us is to continue to develop our high net worth proposition. We have been building momentum in this space for several years, and our proposition and service model has adapted over the years to meet the complex needs of these clients. We are well placed now to expand our reach in this market, and build new relationships with family offices and Private Banks, and I am excited about the opportunities this will bring in 2018.
We will continue to grow deeper roots in our core markets, and in regions such as Singapore and Hong Kong. Building traction in the local domestic markets represents a key growth opportunity for us.
Over the years we have evolved our business model and I now believe that what we offer is vastly different to any other provider.