Alastair Conway, FNZ UK, Middle East and Africa CEO, recently met Money Marketing's Momodou Musa Touray. You can also access the interview on the Money Marketing website here.
For someone who has just travelled for hours from abroad, Alastair Conway shows no signs of fatigue. The Chief Executive Officer of FNZ UK, Middle East and Africa business is in high spirits on greeting me in his office. Conway returned to London the previous night on a nine-hour flight from Nairobi. He is FNZ’s man in Africa, leading the platform tech giant’s foray into the fledgling African wealth management market. I ask if he is jet lagged. “No. I’m not tired,” he replies. “The photographer has livened me up. I had to smile a lot. The face has warmed up.”
Conway is an experienced leader with an impressive record. He was previously CEO of James Hay for eight years and prior to that was sales and marketing director at Cofunds for five years. He joined FNZ in April 2021 to work on one of the platform tech business’s key projects before becoming CEO of the UK Pensions division in September. In May 2022 he was appointed to his current role (minus the Middle East portfolio), responsible for all aspects of UK and South African business including client relationships, sales, technology delivery, asset servicing and support.
Conway’s main task is to further FNZ’s mission of “opening up wealth” — a challenge he relishes. The firm’s South African business has expanded to the whole of Africa and he has been given an extra portfolio, the Middle East. I’ve got the best of both worlds,” says Conway.
“I’ve got something that I need to get my hands around and help make as good as it can possibly be. And then another part, which is all about exploring and finding new opportunities.
Understanding the journey
He continues: “There are several reasons why I like it here. One is because I spent years being an entrepreneur and building up businesses from scratch. I get the story here and I get the incredible work Adrian Durham [FNZ founder and group CEO] has done to build up the business. I can relate to him because he’s done it at a completely different level from me. I understand that journey. And I like the fact the business still has that feel about it, because for me that was something I thoroughly enjoyed."
"But I’ve also got the corporate bit. I end up with this sort of lovely sandwich of the two, which ticks every box. And I’d say, as you get older, you get more experience finding things that are challenging. And I know other colleagues have the same view because they had different experiences before they got here. But this place does sort of keep you on your toes.
Sometimes people say to me, ‘What is it about the place?’ I say, ‘To get that sort of enjoyment coming to work.’ “My wife keeps saying, ‘You love every minute.’ And she’s right.”
Tech progression
Conway says platform tech has improved a lot since he joined the financial services sector decades ago. The system in the old days was “primitive” because most of the heavy lifting was done manually. He used spreadsheets with tabs to show clients investments and growth rates. "I would literally ring up the insurance company to get the price and type it into my spreadsheet.” He talks fondly of his client experience during that period and of how it shaped his perspective on good financial planning. He references a couple, Malcolm and Jayne Wheatley, whose investment portfolio he used to manage. “I’d walk in with this sort of paper and on the front it said: The Plan: Malcolm and Jayne Wheatley.
“The first thing Malcolm would say was, ‘Is the plan on track?’ That was all they wanted to know: if those numbers were on track. But I talked them through it, making sure they understood the risks they were taking. “And from that day it’s always struck me that pulling [it all] together — so that people can understand what they’ve got and what it means and what they’re going to do with it — is fundamentally what every adviser does, and what every direct-to-consumer solution tries to offer.” Conway observes that, despite the sector’s technological progress, it still has ground to cover. He believes FNZ will be at the forefront of the next platform tech innovation.
“A platform these days can do the basics. What we’re finding most people are excited by are some of the innovations we’re beginning to bring.
“Take our ESG [environmental, social and governance] solution, where you can take a portfolio and sort of cast the lens through that to identify stocks somebody may not want in their portfolio, so they can be clear they’re investing only in the type of asset they want to.
“We’ve just bought a business [YieldX] in the US that will bring some incredible technology. Adam Green [co-founder and CEO of YieldX] runs that business and he’s going to do a great job in bringing that technology and globalising it for us. That’s the stuff that’s really going to move the platform sector on."
“And there’s a bit of debate going on about whether the technology is on this basis or that basis. I think it’s on the innovation about how to make that interaction even better and more personal. And the generation that’s coming up will keep this sector honest because they won’t put up with the way it’s been done previously. They won’t accept high charges. They won’t accept investment where they can’t eliminate tobacco stocks or oil stocks or whatever it may be."
“So I think the sector is in far better shape than it has ever been. But the innovation to come will be the bit that really begins to make it hum and get exciting. And I still think we’re on that journey.”
Cost issues
Meanwhile, Conway believes the platform sector needs to do more to address the issue of cost. In a recent Dear CEO letter to platform bosses, the Financial Conduct Authority expressed concern about fees and charges, saying they might not represent fair value. Conway is on side. “I still think there’s too much cost sitting in the system. If you look at the overall cost to serve, including advice, sometimes that can look expensive. But not everywhere. Some have begun to get that into a better place.
“Our role here is to take out those costs below the line, the cost of dancing by the client, to streamline, remove the friction from the system, make it automated, so the cost can come out. Advisers can pass on that benefit, or the direct investor can benefit from that.”
Adviser as platform
There has been an increase in advice firms opting to become a platform operator in a bid to reduce risk and better manage client assets across multiple execution venues. However, Conway believes not many firms will choose to become a platform operator because of the challenge of running it. “I’ve been around for a while and white labelling or owned platform was certainly there in the 90s, the noughties and the 2010s. I dealt with this in a five-year cycle. I don’t think we ever quite know what has stimulated it.”
He argues advisers have always run great businesses that were undervalued, and he believes advice firms have become more aware of their position in the value chain. What has happened is that “everyone’s cottoned on to the fact they are the link with most investors”, particularly the ones who are carrying the wealth. “A lot of them are the generation where they’re beginning to retire and move on from the industry, or are looking for a way of retiring,” he says. “Suddenly we’re seeing this consolidation of the adviser market, and you’ll start to see businesses bought out. They will become part of a network, almost going back to networks, or like mini-networks where you might have a central investment solution or they’re allowed to go on doing their own thing but within slightly tighter guidelines.
“Why do advisers go down the white-label platform route? Partly because they might want to centralise everything into one system. But they could do that with one or two platforms.” Conway questions whether most IFA businesses really think their value is embedded in running a platform that is “complicated and has a lot of operational challenges”. These challenges “are very different from the skills that most IFA businesses have”, he observes. If small firms follow the white-label platform route when they do not really want to or are not best geared up for it, worries Conway, it may not add value to their business.
“There’s a danger of distraction,” he warns. “I think, if you get to a larger scale, you’ve got more capability of having an infrastructure that allows you to do it. And then, if it comes down to economics, we don’t see it as a threat.”
Stifling competition?
FNZ, a giant in the platform sector, is often accused of stifling competition. But Conway disagrees. “I think we’ve stimulated most of this market. I think the interesting thing is because we tend to do the whole stack of technology. We’re not just doing technology; we’re helping people transform their business. But anybody out there is welcome to match us if they want to. I never turn up and think I’m going to win business because there’s no one to compete with. That’s not the case. But it might be that, actually, we’re turning up and offering Part A, Part B and Part C, but we’re in competition with somebody else for Part A, Part B and Part C. There’s plenty of competition and lots of innovation. People try to find different ways of addressing the market.”
He continues: “The advantage we’ve got is we’re big, we’re successful, we’re growing rapidly. And everybody’s trying to compete with us. That’s fantastic. And therefore we’re stimulating competition. The challenge the competition have is they’ve got to step up and achieve something. They’ve got to get volume and scale. We like to feel we’re walking the walk rather than doing too much talking about it. And we can get talked about a lot. Maybe that’s because we don’t talk a lot about it, we just get on with it.
We welcome any competition that makes the space better. We are not frightened by it. We embrace it. It makes us stronger because it keeps us on our toes, which is healthy."
"But I’d say the same to the others. They’ve got to accept the fact, if we’re winning, it’s because we’re doing it better than anybody else. And we believe we are.
Black Monday
Conway, who has over 25 years’ experience in financial services, remembers vividly the day he joined the sector. “The date was 19 October 1987 - Black Monday,” he recalls. Black Monday, of course, was the catastrophic worldwide stockmarket crash. It was triggered when the US Dow Jones Industrial Average fell 508 points, or 22.6%, in a single day, causing selloffs. It remains the largest one-day fall ever, according to industry experts.
Conway was undeterred by this seismic moment. He had joined Ranford Smith and Partners, a wealth management firm that ran its own discretionary funds. Coincidentally, the stockmarket crash had occurred just days after a powerful storm hit parts of the UK during the night. “I remember, on the day I arrived, the market was collapsing,” says Conway. “And the wind had blown down all the trees on that infamous night when the forecast was for no hurricane.” He says the firm he joined was run by a “marvellous man” called Roger Smith. “They were a genuine wealth management business. It was an interesting place in which to learn and I quickly progressed up the organisation. I ended up running the financial planning division, and then broke out and did my own thing, setting up my own business in 1990.”
Conway recalls further: “I was a one-man band and I remember my first day, sitting in the bedroom overlooking some fields. And I was going, ‘What have I done? This is absolutely mad.' But I had a few clients. On my second day, a local accountant who I vaguely knew rang up and said, ‘Could you advise all my clients?’ And, well, that was it. Then I went through a period for about 10 years where I built up a company, we merged with another company with a bit of it broken off, and regressively I ended up running it."
“In those days we were well ahead of our time. We were charging fees, and running a mix of actively managed and passive portfolios.” He sold the business in 2004 and, after a hiatus of a few years, returned to the corporate world with, first, Sesame Bankhall and then Zurich.
In his footsteps
Conway’s daughter, Alice, is following in his footsteps. The 22-year-old recently completed her training as a financial adviser. “I’m very proud that my daughter has just qualified,” he says. “She passed her exam; she’s now qualified to go on and become chartered. She’s doing brilliantly. She’s already learned the skill about making that complex stuff relevant to the person you’re talking to. And she should be doing that with clients. She works with my ex-wife, her mum, who is also a very fine adviser. And that’s what their job is every day. And she often talks to me about meetings she’s had with clients. It’s still the cornerstone of that whole process.”
In his downtime, Conway enjoys golfing and skiing with his Lithuanian wife, Rita. The couple divide their time between homes in London and Marbella.
